State revenue in Rhode Island is running about $80 million ahead of expectations for the fiscal year starting July first. Does that make it less likely that state leaders will support a broad-based tax increase, or how about a tax increase for the wealthiest Rhode Islanders? The Public’s Radio political reporter Ian Donnis sat down to discuss that and other economic questions with Governor Dan McKee.
Transcript
This transcript has been edited for clarity.
Ian Donnis: Governor Dan McKee, thanks for sitting down with us. There’s a group called The Revenue for Rhode Island Coalition that wants the richest 1% of Rhode Islanders to pay an additional three points in taxes on income over $625,000. Where do you stand on that? Do you support that proposal?
Gov. McKee: Well, I don’t think it’s time. You know, it may have its time at some point in time, but at this point, look, we just got good news last week. We got a lot of good news coming in over the last couple of weeks. Tidewater is one where we’ll talk about that, but the $80 million has now kind of filtered in and I think that should absorb any of the issues that we’re dealing with in the budget I proposed. So at this point in time, I would say that’s not, not our time.
Ian Donnis: You’re talking about the May Revenue Estimating Conference. Supporters of increasing taxes on the richest Rhode Islanders say it’s a matter of fairness. They point to how one of your predecessors. Governor Don Carcieri, back in 2010, cut the highest tax rate paid by Rhode Islanders from 9.9% to 5.9%. Why are they mistaken that this is an issue of fairness?
Gov. McKee: Our Rhode Island 2030 plan really speaks to that. So we’re having a great deal of success by creating a competitive playing field in all respects between us, Massachusetts, and Connecticut. I is showing in the rankings right now, US News and World Report. Since I’ve been governor, we’ve moved up 10 spots in the states. One of the biggest areas in that is the recognition of the increase of economic opportunity in the state. So again, it’s not the time to do it. If the time comes, then certainly we’ll address that. But with our progress that we’re making and the plan that we have in place right now, we want to stay the course. The 2030 plan, raising education outcomes for our children. Raising wealth and incomes for our families, making sure we’re healthy. And then the biggest thing is, which we have as we enter in an uncertain economic time, is the fact that we have billions of dollars of work in the pipeline right now. Putting people to work at good-paying jobs, building things that are gonna pay you off for decades to come. So we wanna stay the course, we wanna stay competitive and it’s working.
Ian Donnis: University of Rhode Island, economist Leonard Lardaro has said that he thinks Rhode Island is heading into a full-blown recession. Do you agree with him? And how do you plan to have the state respond to that?
Gov. McKee: Well, our 2030 Plan has really positioned ourselves in a proactive way. And we’re not being reactive as Rhode Island normally is if they’re faced with an economic uncertainty. And again, this will be a national issue. It won’t be a Rhode Island recession. It’ll be a national recession that may be brought on by some of the things that are happening in Washington right now. But we are positioned in a way where we can soften the blow of a recession. As I said, billions of dollars of work, working on our universities. URI, Rhode Island College, working on a state health lab, just came out of work that put people to work with several years at Amazon at prevailing wage, Tidewater with the soccer facility. That’s a big success in terms of adding to the economy, but we are putting people to work. And that’s never happened before in the state of Rhode Island. So I’m proud of the fact that the plan that we put in place, the Rhode Island 2030 plan, is starting to pay off as we are getting more and more done. And that’s gonna help support any potential problem. I’m in conversation with Len quite a bit. I’ve talked to him more than once. I actually put a call into him this morning on that report to kind of get his sense on what we’re dealing with. I think it’s important that we understand what’s going on, but at the same point in time, understand this would be a national issue. Rhode Island’s always been first in and last out of these economic downturns. That’s not the case right now. You see that in the fact that the revenue projections that have just been confirmed an $80 million plus because of the management that we put in, in terms of making sure our economy is strong and making sure that we’re collecting the dollars that is due to us. And as a result of that, look, I’m not gonna predict what we’re gonna get, but I can tell you right now we’re more prepared if there is an economic downturn than the state has ever been.
Ian Donnis: You mentioned the new Centreville Bank Stadium in Pawtucket. That’s a nice thing for Pawtucket. You were on the field when Rhode Island FC had its first home game. Nonetheless, the cost to taxpayers over time of that stadium is $132 million. Are you convinced that the benefits of the stadium are greater than that cost for taxpayers?
Gov. McKee: Well, that’s the cost of it projected out 30 years. We fail to mention that we actually have a 10-year buyout on that bond that’s gonna significantly shrink that investment. But yes, it’s worth getting things done. We had a choice: either do nothing or get it done. That finance package was by law and statute before I came in, and it was something that I didn’t really embrace, but I did embrace the idea of getting the work done. Creating an opportunity in Pawtucket. And now it positions us where people, I think, are starting to believe that we actually can get things done that are gonna help the economy and we’re gonna build that pedestrian bridge. I was on the pedestrian bridge with the Providence Foundation yesterday in Providence, and they say that’s the most important infrastructure that has been put in, in terms of the economy in downtown Providence. Well, we’re gonna build a pedestrian bridge over the water, and it’s gonna attach to several hundred housing units. That would not have happened if we didn’t take, if I didn’t make the tie-breaking vote and get, make sure that we got it done and we did. And now you’re seeing sell-out crowds coming in initially and on the backside of a very successful season. And it’s very uplifting to be around people who are starting to believe that we actually can do things that make a difference for people around the state and in the communities that I happen to believe are really the area where we’re gonna have the most growth. As a former mayor, I focus on our local communities and making sure that we are doing right by them.
Ian Donnis: Governor Dan McKee, thank you for sitting down with us.
Gov. McKee: Well, thanks for the invite. I look forward to getting together again.
