Chafee's budget calls for biz tax cut, more education spending

Jan 16, 2013

(PROVIDENCE, RI) Gov. Lincoln Chafee won positive reviews Wednesday night for a state budget with no new taxes and a reduction in the corporate tax. The governor’s spending plan also includes more money for education and creating jobs.

Chafee’s budget for the fiscal year starting July 1st takes a different approach from his last two spending plans. Rather than proposing new taxes, the governor defended a decision to cut the corporate tax from nine to seven percent over three years. He says doing that makes sense even though money for social services remains tight.

Gov. Lincoln Chafee delivers his State of the State address
Credit Ian Donnis

“I would not make this recommendation if I did not truly believe that in the long run it will result in a stronger economy, more Rhode Islanders working, fewer of our citizens in need of state support,” says Chafee.

The governor’s budget has increases of $8 million for higher education and $30 million for K-12.

It also includes $3 million to subsidize a program to create jobs through paid internships.

Reaction from Lawmakers

The two leaders of the General Assembly gave high marks to the budget outlined by the governor. House Speaker Gordon Fox called the spending plan perhaps Chafee’s best since the governor took office in 2011. Senate President Teresa Paiva Weed praised the Chafee for boldness in proposed to cut the state corporate tax from 9 to 7 percent over three years.

“This budget reflects the very things that the governor, the speaker and I have been working on: investments in infrastructure, investments in education, investments in workforce development and job-training,” says Paiva Weed.

Paiva Weed was less enthused when lawmakers gave Chafee a standing ovation after he called on the General Assembly to approve same-sex marriage. She slowly moved to her feet and briefly joined the other legislators in standing before sitting back down.

The House is expected to pass a same-sex marriage bill next week, but the outlook in the Senate remains unclear.

Legislative leaders gave the governor’s budget high marks. The General Assembly usually puts its own imprint on the spending plan before passing it in June.

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