On a party-line 11-3 vote, The Rhode Island House Finance Committee approved Thursday a $13.6 billion budget that uses a rare surplus to offer several different versions of tax relief in an election year.
The three Republicans on the committee voted against the budget, following an hour-long briefing by House Fiscal Adviser Sharon Reynolds Ferland. House GOP Leader Blake Filippi said there was not adequate time to digest the spending plan.
But House Speaker Joe Shekarchi, Senate President Dominick Ruggiero and Gov. Dan McKee talked up how the budget uses an almost $900 million surplus to give money back to Rhode Islanders.
The cuts include eliminating the state car tax one year early for vehicles worth more than $6,000. The cut would not apply to East Providence, since the city has a different fiscal year, although Mayor Robert DaSilva said he is working to make the cut applicable.
Shekarchi said the car tax phaseout is more direct than a gas tax cut sought by some lawmakers.
“We felt that collectively the elimination of the car tax is real, it’s tangible and it goes to Rhode Islanders who have cars registered in Rhode Island,” he said.
McKee said the cut will make Rhode Island more economically competitive.
Other forms of tax relief in the budget for the fiscal year beginning July 1 include a one-time child tax credit, $250 per child, for individuals earning less than $100,000 or joint filers earning less than $200,000.
Eligibility is also increased, from income of $30,000 to $35,000, for a program that refunds part of the property tax paid by the elderly and disabled.
With developers of a planned soccer stadium in Pawtucket citing a $30 million shortfall, the budget does not include money to address that.
The budget makes a series of changes to the $12.8 billion plan submitted by McKee in January, while maintaining the governor’s intention to spend $250 million on housing.
Shekarchi said he understands the concern about how Rhode Island’s annual spending has grown by billions of dollars over time, but he said it would be unwise for the state to not tap every single dollar available as part of federal COVID relief.
The budget goes to the House floor next Thursday.
