You are using an older browser version. Please use a supported version for the best MSN experience.

R.I. House boosts Fane tower with more tax credits

Providence Journal logo Providence Journal 6/22/2019 By Katherine Gregg, Patrick Anderson, Providence Journal
a man standing in front of a computer: As the House debates the fiscal year 2020 budget Friday night, Rep. K. Joseph Shekarchi, left, and House Fiscal Adviser Sharon Reynolds-Ferland talk with House Speaker Nicholas Mattiello. © The Providence Journal / Bob Breidenbach/Providence Journal/TNS As the House debates the fiscal year 2020 budget Friday night, Rep. K. Joseph Shekarchi, left, and House Fiscal Adviser Sharon Reynolds-Ferland talk with House Speaker Nicholas Mattiello.

PROVIDENCE -- The state House of Representatives approved extra state incentives to the proposed Hope Point 46-story apartment tower and beat back efforts to cut the state sales tax, but left the State House on Friday night without passing a $9.9-billion state budget for the year that begins July 1.

After lengthy debates about stripping local control of the former Route 195 land -- which passed -- and forcing the state's child welfare agency to hire more social workers -- failed -- House Speaker Nicholas Mattiello called off debate on the budget at about 10:30 p.m. with plans to reconvene Saturday.

Still awaiting votes are plans to triple the number of medical marijuana dispensaries and the section of the budget containing individual spending items. It would increase state spending $393 million, or 4%, over the budget lawmakers approved last year.

But before calling off deliberations, lawmakers approved an individual health-insurance mandate, a tax on opioid painkillers and a redesign of the state's venerable "wave" license plates, and gave back some of what they were planning to take away from Gov. Gina Raimondo's economic-development incentives.

a group of people sitting at a table: House Finance Committee Chairman Rep. Marvin L. Abney introduces the 2020 fiscal year budget to the floor on Friday night. [The Providence Journal / Bob Breidenbach] © The Providence Journal / Bob Breidenbach/Providence Journal/TNS House Finance Committee Chairman Rep. Marvin L. Abney introduces the 2020 fiscal year budget to the floor on Friday night. [The Providence Journal / Bob Breidenbach]

In a surprise floor amendment, the House made a special exception for the proposed Hope Point Tower in Raimondo's signature construction-incentive program. The apartment tower on former Route 195 land would be eligible for $25 million in tax credits instead of $15 million.

In addition, the incentives for the developer of the tower, the Fane Organization, would be excluded from the total spending cap on the program, called ReBuild Rhode Island, and the cap raised by $10 million.

Bottom line -- the incentive program's size was effectively raised from $200 million to $235 million.

Members of the Providence delegation protested the budget's override of city zoning on the former highway land in response to opposition to Fane's proposal, but lost the vote, 52-18.

The night's first wrenching debate pitted liberal and conservative Democrats against each other over an ultimately doomed plan to increase the state's hotel tax to pay for a program to combat chronic homelessness.

Freshman Rep. Liana Cassar proposed raising the hotel tax from 5% to 5.5% and using $500,000 of it to restore state matching funds for a Pay for Success "social impact bond" that lawmakers had removed from Gov. Gina Raimondo's budget.

Rep. Teresa Tanzi called the proposal "one of the most ambitious and progressive and forward-thinking proposals that was included in our governor's budget this year at all. This is the most innovative answer to a question that has been plaguing our state -- every state ... chronic homelessness. This is more than just somebody who doesn't just have a place to lay their head."

Venting her frustration at colleagues balking at the proposal, Rep. Moira Walsh noted Rhode Island would still have a lower hotel tax than Connecticut, Maine, Massachusetts and New Hampshire.

She added that the proposed funding was half what House leadership intended to spend on one Cranston chiropractor's alternative brain therapy. (Mattiello has said he intends to remove that funding for Cortical Integrated Therapy, which is contained in the last budget article lawmakers didn't get to.)

In response, Rep. Stephen Ucci said: "No one can debate that we don't have a chronic homeless problem, that we don't want to do what we can, but this is $500,000 to get a grant that will someday expire and then it will grow and then we can't afford it. ... That's not to say this isn't something we look into. We find a way to address, we find a more stable revenue stream."

This is a $6.2-million, multiyear commitment, echoed House Majority Leader K. Joseph Shekarchi.

The proposal ultimately failed on a 55-to-18 vote.

Plans for fixing what lawmakers from both parties called a "crisis" in the Department of Children, Youth and Families were hashed out in debates and amendments on the House floor.

Republicans proposed a floor amendment that would hire 25 new DCYF frontline workers and get the agency accredited by stripping money from the state's film tax credit program and Raimondo's free-tuition program.

"While the DCYF director has been saying over the past two years that we don't have a shortage of frontline staff. We have experienced too many child fatalities in state care in a very short time, with the last one being a developmentally disabled little girl who died in a bathtub,'' Republican Rep. Sherry Roberts said.

But several lawmakers, including House Oversight Committee Chairwoman Patricia Serpa, said it would be better to wait for an independent assessment of the way the agency is run first.

Republicans also tried but failed to save a 2011 state law triggering half a percentage-point cut in the state's 7% sales tax, with federal approval of internet sales tax collections, which the budget proposed by Democratic leaders would eliminate.

"We made a promise to the Rhode Island taxpayers that we would cut the sales tax to 6.5%," Foster Republican Michael Chippendale said in support of the amendment. "Let's be honest with ourselves. This is a promise we made repeatedly over the past eight or nine years to the people we represent. Let's not kick sand in their face, please."

Raimondo signed into law a measure subjecting all e-commerce to sales tax, but Democratic leaders argued that it triggered no sales tax cut because a U.S. Supreme Court ruling, not Congress, enabled it.

Why repeal the trigger if a technicality has rendered it moot?

"If we actually wanted to re-institute this trigger, we would be some $80 million in the hole," said Rep. John "Jay" Edwards, D-Tiverton, rising in opposition to the amendment.

"Thank you, [Majority] Whip Edwards, for saying that," said House GOP leader Blake Filippi of Block Island. "For the past four months, all our leaders have been saying the trigger hasn't been met because there hasn't been an act of Congress. Are you saying for the past four months we should have been paying 6.5% sales tax?"

Mattiello: "Do you have any corresponding savings to pay for the amendment?"

Filippi: "Our position is that if the trigger has not been met we don't need any savings."

Edwards later clarified that he did not believe the sales tax cut had been legally triggered.

The amendment failed, 10 to 62.

Other tax proposals in the budget marched through with little debate.

They included an exemption from the state sales tax for feminine hygiene products -- eliminating the so-called tampon tax -- and a separate exemption for funeral urns.

Going the other way, the budget would extend the sales tax to digital downloads and streaming services such as Netflix.

And a $5-million-per-year tax on pharmaceutical companies to compensate the state for the opioid crisis passed with limited misgivings by lawmakers. Drug companies and some patient advocates have warned the tax will raise the price of drugs for some people suffering from chronic pain and rare illnesses.

___

(c)2019 The Providence Journal (Providence, R.I.)

Visit The Providence Journal (Providence, R.I.) at www.projo.com

Distributed by Tribune Content Agency, LLC.

AdChoices
AdChoices

More from Providence Journal

Providence Journal
Providence Journal
image beaconimage beaconimage beacon