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PROVIDENCE, R.I. (WPRI) — Rhode Island lawmakers are inching closer to approving a new $14 billion state budget, and the final draft doesn’t include a number of Gov. Dan McKee’s requests.
The House Finance Committee approved the budget proposal Friday. Legislative leaders nixed McKee’s request to lower the state sales tax from 7% to 6.85%, as well as his suggestion of canceling an automatic 3% gas tax increase that is slated to take next month.
“I asked for it and I lobbied hard for it,” McKee said Monday. “I think the sales tax issue is very much alive, and the gas tax issue will come and go.”
House Speaker Joe Shekarchi explained that the governor’s sales tax cut was removed from the budget proposal because there just wasn’t enough money to make it happen this fiscal year.
“I just think the impact for the average Rhode Island family was minimal,” Shekarchi said of sales tax cut. 12 News reported in February that McKee’s proposal would save the average Rhode Island household only $39 a year.
Shekarchi swapped McKee’s proposal for tangible tax relief, a top priority of Senate President Dominick Ruggerion. The speaker said reducing the tangible tax would benefit roughly 75% of the state’s businesses.
McKee said he is “not worried” about Tidewater, adding that there is flexibility in the budget “to make sure we keep that project going.”
As for Superman building, Shekarchi said neither the developer that owns the building nor the governor asked lawmakers to provide additional financial assistance.
One McKee proposal that made the cut: the budget sets aside $9.4 million for state-funded scholarships, which would provide two years of free tuition for eligible Rhode Island College students.
It also ensures that Rhode Island Attorney General Peter Neronha will be able to hire 15 additional full-time staffers, which would in turn allow him to launch his proposed cold case unit.
Neronha in the past has described his office as understaffed, underfunded and “totally underwater.” McKee initially rejected Neronha’s request for additional resources, citing uncertainty over a possible recession.
“If we said to every department that they would get exactly what they asked for, the budget would explode and it would be too expensive for taxpayers,” the governor said at the time.
Shekarchi said Neronha’s request was granted thanks to a significant amount of settlement funds his office has generated.
When asked about why he rejected Neronha’s initial proposal, McKee said he was under the impression that he was asking for funding from standard state revenue and not settlement funds.
“If we had heard that proposal, we would’ve thought differently about it,” the governor said. “I just didn’t want to expand the footprint of our departments to the degree that he was asking for.”
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