Everyone hates to pay taxes, but is Governor Donald L. Carcieri making the pain seem worse for Rhode Islanders than it really is?
In his budget address in February, and in comments since then, Carcieri has quoted a Washington research group, the Tax Foundation, as saying that Rhode Island has the fourth-highest state and local tax burden of the 50 states as a percent of personal income. But other rankings show the state in a more favorable light when comparing the amount paid by Rhode Islanders with that of taxpayers in other states. The other surveys put Rhode Island in 14th or 15th place — and some even drop the state from the top to 20th and 22nd place. Here’s a sample:
• The Nelson A. Rockefeller Institute of Government at the State University of New York, using 2000 data, says Rhode Island’s total state and local government revenue puts the state 14th in terms of per capita taxes. When it calculates these taxes as a percent of personal income, Rhode Island ranks 22nd.
• The Tax Policy Center, operated by the Urban Institute and the Brookings Institution, says 2002 state tax revenue ranks Rhode Island 15th per capita, and 22nd as a percent of personal income.
• The US Census Bureau, with 2002 data, says Rhode Island ranks 15th in total taxes paid per capita. (Massachusetts is 6th on that list, and Connecticut 3rd).
The Tax Foundation’s survey cited by the governor compares 2003 state and local taxes as a percent of personal income to come up with its 4th-place finding. But another Tax Foundation survey, using just state tax collections, puts Rhode Island in 15th place per capita, and 21st as a percent of personal income.
While none of the lower national rankings put Rhode Island at the bottom of the heap, all of them paint a sunnier picture than Carcieri.
The governor’s glass-is-half-empty position on taxes is surprising, because he chairs both the Economic Development Corporation and the Economic Policy Council. You wouldn’t expect the state’s top economic salesman to be trash-talking the state’s position on taxes. One likely reason for this is that it’s in Carcieri’s interest to stress the tax burden as he’s proposing a series of painful budget moves and dismissing tax hikes. "We cannot and must not raise the taxes that weigh down working families," the governor said in his budget address.
Bryant College economics professor William Sweeney — who supports the governor’s drive to curb money spent by the state on its workforce — says he’s not familiar enough with the various tax rankings to judge which is the fairest. Sweeney suspects the governor is focusing on the 4th place ranking because he’s "trying to get some wiggle room with state employees" as he and the state’s labor unions arm-wrestle over employee health benefits.
Jeff Neal, Carcieri’s spokesman, says the governor prefers the Tax Foundation’s rankings because it factors in taxes paid by non-residents, such as tourists or corporations, and provides a fair measure of the problem. "The governor has a responsibility to use the information he believes draws the most accurate picture, so we can determine state policy accurately," Neal says. He adds that all of the rankings paint a serious problem: "The fact is that Rhode Island’s tax burden, by any measure, is high and getting higher."
But the Poverty Institute at Rhode Island College’s School of Social Work — concerned about an array of budget cuts proposed by Carcieri — says the governor is making an unnecessarily gloomy case. "We have credible data that indicates that Rhode Island spending growth is among the slowest in the nation," says the institute’s Nancy Gewirtz, "and its tax burden ranks in the middle, not at the top, as the governor has suggested."
Issue Date: April 9 - 15, 2004
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