Governor McKee released his proposed 2023-2024 Fiscal Year Budget which recommends cutting the state sales tax from its current 7% rate to 6.85%. Budget officials estimate the cut would save each Rhode Island household about $77 per year.
In her response to the Governor’s State of the State Address on January 17th, Senate Minority Leader Jessica de la Cruz called for bold action, including reducing the state sales tax to 5%. Now, the Senate Minority Caucus has submitted legislation to amend Title 44, Chapter 18 to reduce the sales tax on all items currently subject to the tax from 7 percent to 5 percent.
“Using the $77 per year, per household savings estimated by budget officials, RI households would have to purchase approximately $51,500 in taxable items,” reasoned Leader de la
Cruz. “Under the Republican proposal, that same household purchasing $51,500 in taxable items would save $1,030 in that same year. What could your family do with an extra $1,000 in retained income? That is the question every Rhode Islander should consider.”
“RI families need relief, and $77 a year just doesn’t provide that,” stated Senate Minority Whip Gordon Rogers. “While any tax cut is welcome, the Governor’s proposal is just not enough. It does not make Rhode Island more competitive with surrounding states that all have lower tax rates and certainly will not help RI businesses to draw in more sales.”
“When we forecast projected revenue, we also need to take inflation into consideration. People are paying more for everything. Even the Dollar Store is now $1.25,” said Senator Elaine Morgan. “That additional twenty-five percent, or even more on some taxable goods, translates to higher sales tax revenue for the state and an increased burden for taxpayers. We should be doing all we can to ease the burden on Rhode Islanders, and this proposed legislation will help people keep more of their money – just when they need it most.”
“The Governor’s suggested sales tax decrease is negligible at best,” Senator Thomas Paolino stated. “We want people to be able to keep more of their own money, and in doing so they will be inclined to invest it back in our economy. Increased buying power will alleviate any potential loss of sales tax revenue, as people buy more and get more for their money.”
Newly elected Senator Anthony Deluca added, “I have heard from so many people that are concerned with the cost of living in and doing business in Rhode Island, people who feel they need to evaluate whether staying in RI is the right choice for them and their families. Saving 15 cents on every $100 of taxable goods is not going to keep people in our state. Sadly, it’s simply not an incentive to spur any type of growth or prosperity.”
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