Sherman and other supporters point to how the number of high-income households in Rhode Island was almost stagnant from 2000 to 2004, while Massachusetts saw a considerable increase, and how the Ocean State gained more low-income residents, while that number decreased in Massachusetts. The end result of such trends, they say, is a squeeze for remaining taxpayers, diminished contributions to local charities, and meager growth in good jobs and growing companies.
Advocates for low- and moderate-income Rhode Islanders, who ap¬proach the issue differently, question this information. Downplaying as relatively minimal the difference in state income taxes paid by wealthy residents of Rhode Island and Massachusetts, they place considerably more emphasis on how tax cuts would largely benefit the affluent — with the estimated cost of the tax cut pegged at $75 million — at the expense of the needy.
Kate Brewster of the Poverty Institute at Rhode Island College, for example, contends that these millions would be far better spent on child care and health-care programs for poor and working Rhode Islanders. Noting that a proposed weekend lifting of the sales tax would cost $5.3 million, she asks, “Are we going to take money away from the state’s poorest families so that people can get a tax break on a big purchase? I know some people would love that,” even though it would make things worse for families trying to find their way out of poverty. “We think that’s an irresponsible tradeoff.” (In contrast to descriptions of overly generous social services, advocates also note that state spending on cash assistance to the lowest-income families under the Family Independence Program has dropped to $13 million, from $55 million in 1997.)
Similarly, Bernie Beaudreau, executive director of the Rhode Island Community Food Bank, countered accounts about wealthy Rhode Islanders supposedly fleeing to Florida by using a May op-ed in the ProJo to assert that warmer weather “and a more leisurely retirement lifestyle has far more to do with moving than the personal income tax rate.” Citing “the false promise that there is a connection between tax breaks for the rich and more bread for the poor,” Beaudreau wrote, “The tax proposal does indeed promise to take tens of millions of dollars out of state revenues at a time of budget deficits and when investments are needed to meet the basic food, health, and shelter needs of our people. That’s just plain wrong.”
The popularity of tax cuts in an election year, and a fear of being outmaneuvered by Carcieri, might explain why House leaders initially supported the measure. Then again, with the dislike of George W. Bush posing a potential drag for the governor, it probably doesn’t help Carcieri to win raves from Grover Norquist, president of Americans for Tax Reform — who once famously talked about reducing the federal government to the size “where we can drown it in the bathtub.”
When push comes to shove
The Emergency Campaign For Rhode Island’s Priorities (www.prioritiesri.org), a coalition of social agencies, unions, advocacy groups and others, has put forward its own “better budget” proposal, “to show that the legislators have choices they can make to prioritize the basic needs of Rhode Islanders and quality, efficient government services for all of us.”In February, as the state was facing $300 million structural deficit over two years, Carcieri proposed, among other cuts, eliminating $31.7 million in health, welfare, and childcare subsidies. The size of the deficit diminished when state revenue estimators found in May that the state would have an additional $57 million to spend.
