They say their latest proposal would deliver much-needed revenue as Rhode Island once again confronts annual budget deficits far into the future. Executive director of the Economic Progress Institute Weayonnoh Nelson-Davies is among those supporting this approach. But the state budget has grown dramatically over the last 10 years, so should the focus be on finding savings and efficiency before considering new taxes? How will Rhode Island respond if Trump administration policies pose a wallop for low- and moderate-income people? And with legislative leaders unwilling to consider new taxes on the rich, what would it take to convince them to support a change? This week on Political Roundtable, I’m going in-depth with head of the Economic Progress Institute Weayonnoh Nelson-Davies.
TRANSCRIPT
This transcript has been edited for clarity.
Ian Donnis: Welcome back to the Public’s Radio.
Weayonnoh Nelson-Davies: Thanks. Thanks for having me here. I feel honored to be your last guest before you move.
Donnis: We’re honored to have you. Let’s start with a little bit of national politics. The stock market has been tanking recently in response to the way that President Trump is raising tariffs. Do you think President Trump is right that the short term pain to the economy will result in a long term gain by bringing more manufacturing jobs back to America?
Nelson-Davies: I’m not an economist, Ian, but from the little I do know about how economy works we have back and forth between tariffs. From what I know, most of the time the taxes are going to be shifted to consumers. So that’s a concern. We also have our neighbors, our trade partners, Canada and Mexico threatening to go to somewhere like China. So they’re removing U.S. products from the shelf. They’re trying to find different products in different parts of the world instead of the U.S. Then you pair that up with the federal fund freezes. You pair that up with the unemployment that’s happening. For me, I’m not sure what President Trump is looking at, but all of it sounds like bad recession news coming our way.
Donnis: Weayonnoh, you’re executive director of the Economic Progress Institute, which advocates for low and moderate income Rhode Islanders. If the impact of Trump administration policies is overwhelmingly negative for low and moderate income people in Rhode Island, what is the plan to respond to that?
Nelson-Davies: There are a couple of things. I think we have to look at the budget because a couple of things that happened with the Trump administration, but we’re looking more at what Congress is doing. Because Congress is really pushing forward the agenda of the Trump administration to cut something like Medicaid and SNAP. There’s a $880 billion proposed cuts for Medicaid, $230 billion proposed cuts for SNAP. That’s going to impact people in Rhode Island.
Donnis: And that’s a food assistance program.
Nelson-Davies: Correct. And so 144,000 Rhode Islanders rely on SNAP. Over 340,000 Rhode Islanders rely on Medicaid. So we’re going to feel the impact in Rhode Island, but also what Congress is doing is thinking of shifting the cost of those programs to the state, which means our budget will be impacted even more because about 35.8 percent of our budget relies on federal funding.
Donnis: Of course, critics of President Trump wouldn’t be in this situation of being worried about all this if Democrats had held the White House last November. Do you blame Democrats for not doing a better job with that?
Nelson-Davies: I can’t say, you know I’m not sure what happened. I’m not sure why people voted the way they did. Most of the time in the economy, when people are feeling it, they will vote, you know, whatever the conscience is. I do think Democrats are doing what they need to do now without having the Congress or the White House. And the only thing that they can do now is really to push back and show the electorate are willing to do what must be done. And then they’ll have a chance again in 2026 to prove that they are the ones to get things done.
Donnis: The Economic Progress Institute is part of a coalition calling for a new 3 percent surcharge on Rhode Island tax filers who make more than $1 million a year. The coalition says there is no evidence that this would encourage people to leave Rhode Island, but we know improving Rhode Island’s economy has been a struggle for many decades. Would that kind of tax increase send the wrong message?
Nelson-Davies: I do not think so. I think it will send the very right message at this time. We have been saying this for many years. We know ARPA funding was going to end, and we knew we were going to be facing a deficit pretty soon. And we have come to the place where now we’re facing a $220 to $330 million deficit, depending on who you ask. So I think the fiscally responsible thing to do at this point is one, raise revenue. We’re talking about close to $190 million estimated revenue for the state of Rhode Island, and it also addresses a regressive tax structure we have where the lowest income Rhode Islanders are paying about 13.3 percent of their income versus the highest earners who are paying only 8.6 percent of their income. The evidence have shown that higher earners do not leave high income tax states because of taxes. If they leave, it’s one to two percent, and they leave for a variety of reasons, and taxes is never one of the high points. People will leave because of job opportunities. People will leave because of housing costs and weather. Every winter, I threaten to leave because of the weather in Rhode Island, but taxes is not the reason people leave, and the message is we need to really protect Rhode Island and balance our budget. And the Speaker and House Majority Leader, I’m pleased to say, are actually seriously considering what must be done.
Donnis: We’re talking here with Weayonnoh Nelson-Davies, Executive Director of the Economic Progress Institute. And Weayonnoh, we’ve seen how the state budget has almost doubled over the last 10 years from $8.67 billion dollars in 2015 to the $14.2 billion proposed by Governor McKee in January, does this intense growth in the budget show that there should be more of an emphasis on finding savings and efficiency before contemplating new taxes?
Nelson-Davies: Yeah, from my perspective, I don’t think that’s the better policy. Most of the time when we have a deficit, we look to cut essential services. So we’re cutting services where 99% of tax filers depend on. So we go to cuts in services like public transit, which we need for our workers to get to where they need. We cut cash assistance for the poorest Rhode Islanders. I don’t think that is the most, I don’t think that’s a better policy. I think the better policy in any budget is to balance, you also have to raise revenue. The budget is large, yes. There may be some places we have to look to see where we can cut, but it shouldn’t be towards low income folks who are dependent on the government. We should also, at this point, look seriously to revenue to mitigate those costs.
Donnis: As you said a bit earlier, legislative leaders indicate they might be open to tax increases this year due to uncertainty from the Trump administration and well, whether there’ll be cuts to federal funding for Medicaid and Medicare. But legislative leaders have been unwilling for more than 10 years to consider increasing taxes on the rich. If the federal funding remains consistent, how would you convince legislative leaders to hike taxes on millionaires?
Nelson-Davies: Right. So I don’t think all rules lead to there will be some tax cuts coming our way. I think the fact that we have a deficit is one thing to have to figure out. Without any additional cuts from the federal government, we still have a deficit in the state of Rhode Island. So we have, again, over a $200 million deficit at the lower end. That has been our argument even before the Trump administration came into power. The other point I think leaders also need to think about is some of the shifts that will be coming to our state. So for example, we are hearing that when it comes to SNAP, states will be required to pay a certain percentage of SNAP benefits. That could be from anything from $17 million a year to $80 million a year that we have to find that money from. And so I think it is the fiscally responsible thing for our leaders to consider raising revenue in the state.
Donnis: You have emerged as a leading critic of the payday lending industry in Rhode Island. Payday lenders can charge the equivalent of up to 260 percent annual percentage interest. It seems like Senate President Dominic Ruggiero is the main impediment to imposing a lower cap on payday lending. What is your thinking on why he is opposed to that?
Nelson-Davies: I’m not sure, I wish I knew, because if I did, I would try to convince him otherwise. We’ve done everything we can to pass this payday loan reform bill. Everyone, last year we even had the governor, attorney general and lieutenant governor all sign on to say it is time. I am hoping, the only thing left for the Senate President to do is really use his conscience and respect the democratic process. We are not asking him to vote for payday lending reform, all we are asking from both him and the House is to let the committee vote this out of committee and put to the floor. Because we know when we put it to the floor, Rhode Islanders want this, General Assembly members want this to happen, so all we’re asking is, please, respect the democratic process and let this come to the floor.
Donnis: What are some of the other legislative priorities this year for the Economic Progress Institute?
Nelson-Davies: I will reemphasize raise revenue. That’s our top priority. Also save RIPTA. That’s a big one. RIPTA is now facing a $32.6 million cut. So that’s important. Healthcare is also a critical one for us. The enhanced premium tax credit that allows people to get health care through the marketplace is expiring in 2025. And so we’re hoping we are able to step in as a state for that. Payday lending reform, like we said. Paid leave, we are back. We were able to get paid leave from six weeks to eight weeks last year. But people are still getting a 60% pay cuts when they take pay leave. And so we’re back to increase that to 85% that will be in line with Massachusetts and Connecticut at this point. And in childcare, don’t forget about children and those who are dependent on cash assistance to make sure we can lift them out of poverty.
Donnis: A recent poll commissioned by the Rhode Island AFL-CIO found that only 29 percent of Rhode Islanders think the state is headed in the right direction. Were you surprised by that finding?
Nelson-Davies: I was not, because I think right now people are not happy with the way things are going. Cost of living is high in Rhode Island. Wages are low and we’re going to be pushing for more wages. So I think people are feeling the economy and then with the chaos that’s happening on the federal level. Rhode Islanders have not heard a plan about how we’re going to be protected and people need to have bold leadership at this point to say we will do what must be done to make sure people can afford to live in Rhode Island.
Donnis: And to come back to payday lending there’s been attention on how Senate President Ruggiero has missed part of this session due to health issues. We expect that sometime this year or next year or in the not too distant future, there will be a change in Senate leadership. Do you think that will produce a different result on the payday lending issue?
Nelson-Davies: It might, and I will say that Senator Ruggiero is my senator. I live in his district and I wish him all the best. He has served this state for many years. And he has done great things for the state of Rhode Island. We are already working with all those in Senate leadership and so they know where we stand on a lot of these issues. They’ve been open to conversation, so I’m hoping whether he is still the Senate president or we have a change in leadership, I’m hoping they’re willing to work with us to serve our Rhode Islanders.
Donnis: All right. That’s all the time we have, so we need to leave it there. Thank you so much for joining us. Executive Director of the Economic Progress Institute, Weayonnoh Nelson-Davies.
Nelson-Davies: Thanks for having me, Ian.
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We’ve recorded more than 800 editions of Political Roundtable here at One Union Station since I began hosting the segment way back in 2009. Next week, we’ll come to you from a new location, our shared office with Rhode Island PBS, for many more conversations with a wide array of guests. For now, we offer a fond farewell to this studio and oh, if these walls could talk. Of course, you can also find my Friday TGIF politics column posting around 4 this afternoon on X, Bluesky, Threads, Facebook, and at thepublicsradio.org/TGIF.
That’s it for our show. Political Roundtable is a production of The Public’s Radio. Our producer is James Baumgartner. Our editor this week is Alex Nunes. I’m Ian Donnis, and I’ll see you on the radio.
