Alves finds sharp resistance on pension/tax ideas

Steve Peoples elaborates today on the pension and tax proposal discussed by state Senator Stephen Alves during his appearance last weekend on 10 News Conference, while also describing the sharp reaction. And while it's understandable that George Nee, for example, wants to be a part of this conversation sooner rather than later, the pushback (which was keenly anticipated by Jim Taricani during Sunday's show) underlies the difficulty of delivering change in Rhode Island.

First, the concepts:

While Alves would not release a draft of the [pension] bill yesterday, he provided a written summary of proposed changes for municipal employees with less than 10 years in the system:

• Police and firefighters must be 55 years old with at least 25 years of service to qualify for a full pension.

• Non-public safety employees must be at least 59 years old with 29 years of service or 65 with 10 years of service to qualify for a full pension.

• Annual pension increases would be capped at a simple 3 percent each year.

• Retiree health-care benefits would begin only at age 55, while coverage would expire when the retiree becomes eligible for Medicare.

And this:

At the same time, he plans to introduce a separate bill that would raise the minimum corporate tax from $500 to $5,000 on a tiered basis. Only companies that gross more than $10 million annually would have to pay $5,000.

“These are some large companies,” Alves said. “I don’t think $5,000 is that onerous.”

An analysis by the Senate fiscal office suggests that the tax increase would apply to less than a quarter of corporate filers who pay the minimum and could generate $10.1 million, which would be distributed to cities and towns.

Now the reaction:

“On the business tax competitiveness front, Rhode Island ranks 50 out of 50 states — dead last for two years in a row,” said Laurie White, president of the Greater Providence Chamber of Commerce, citing data from the Tax Foundation’s 2007 Business Tax Climate Index. “This proposal does not move the needle in the right direction.”

And AFL-CIO Secretary-Treasurer George Nee blasted the pension proposal as “offensive” and “an unnecessary reach.”

“I think that it would have been much more helpful and respectful if there had been a dialogue and a discussion with the parties that are affected by this before a proposal was just thrown out,” he said. “These are obvious serious issues; they affect the taxpayers, but they also affect peoples’ retirements and economic future.”