Republican Assembly Urges Governor to Veto Budget
The Rhode Island Republican Assembly (RIRA) urges Governor Carcieri to veto the budget bill passed by the General Assembly last week and recommends the Governor’s original budget be approved.
Governor Carcieri submitted a balanced budget to the General Assembly that directly addressed three of the most important economic issues facing our state: reform of an actuarially unsound pension system that is far more generous than what prevails in the private-sector; a fair contribution by state employees to healthcare costs in line with what private-sector workers are paying; and reform of our tax system which is a primary factor in making our state one of the most unfriendly business environments in the nation. The Governor’s budget recognized that the best way to grow revenues to our state and local governments is to grow the economy by encouraging job-creating businesses to stay in, or come to Rhode Island.
The changes made to that budget by the General Assembly do not represent a constructive compromise or even “kick the can” a few months down the road. We note that the Assembly’s budget increases taxes on investments in businesses, fails to reduce any taxes, and increases the gasoline tax at a time when Rhode Islanders are already hard hit by the recession. The token changes in the state pension system and health-insurance premiums for government employees are ineffectual in the face of enormous, and increasing, unfunded liabilities that Rhode Islanders in the private sector simply cannot afford. We note that the Assembly, in a self, cynical gesture, voted to continue free health insurance for themselves. The longer we wait to address these issues head-on, the worse they will be.
RIRA believes that raising taxes beyond the level that the people consider fair has the perverse effect of reducing, rather than increasing, state revenue. We have the current examples of California, Maryland, New Jersey and New York as evidence of that simple economic reality. The exodus of once-proud Rhode Island companies to other states or overseas will not be turned around by higher taxes. We believe that the Assembly’s budget will fail to meet its revenue projections and even worse, that shortfall will be due to lower incomes for Rhode Islanders as our economy is damaged further.
The Rhode Island Republican Assembly believes that the solution to our state’s fiscal problems lays in reducing the burden of government on our economy and making Rhode Island an attractive state for job-creating, private-sector businesses to locate. Governor Carcieri understands this businesslike approach to Rhode Island’s cash-flow problem. RIRA supports the Governor and hopes that when given a chance to reconsider its budget, the members of the General Assembly will focus realistically on the key issues of pension and tax reform.
Press Release: For Immediate Release
Media Contact: Raymond T. McKay at president [at] ri-ra [dot] org or (401) 487-2514.
