Malik: Share Surplus With Cities, Towns
Rep. Jan Malik (D-Barrington, Warren) has submitted legislation that would require Rhode Island to share the wealth.
Any rosy financial news for Rhode Island should be shared with its cities and towns, according to Jan Malik (D-Dist. 67, Barrington, Warren).
Malik has introduced a bill, 2013-H 5250, that would require the state to return a portion of any budget surplus that exceeds $20 million to the state’s municipalities.
Under Malik's proposal, a $20 million state surplus would trigger a return to cities and towns at a rate of an additional one percent of the sales taxes collected by businesses in that community.
For each consecutive year that there is a minimum of a $20 million surplus, the return of the portion of the sales tax collected in each city and town would increase by one percent per year, up to a maximum of 7 percent.
“A budget surplus is not solely the state’s doing," said Malik. "It is generated in large part because of good sales tax collections in the cities and towns."
“It seems only fair to me that any financial benefit to the state in the form of a budget surplus should be shared with the municipalities from which the added revenue came,” he said.
“We have put about enough tax stress on local communities and their taxpayers,” said Malik. “Our high sales tax is driving business across the border. The extra tax on food and beverages is putting local restaurants in an unfair competitive position with restaurants in nearby states. It’s time for the state to give back to the municipalities, and sharing a portion of a $20 million budget surplus is a good place to start.”
Malik's bill has been assigned to House Committee on Finance. Co-sponsors include Rep. Joseph McNamara (D-Dist. 19, Warwick, Cranston), Rep. Samuel Azzinaro (D-Dist. 37, Westerly), Rep. Arthur Corvese (D-Dist. 55, North Providence) and Rep. Brian Newberry (R-Dist. 48, North Smithfield, Burrillville).
Mrs. B
12:50 pm on Sunday, March 3, 2013
BRAVO Jan Malik. great idea.
Manifold Witness
10:54 am on Monday, March 4, 2013
Lay language. No definitions. No math. The bill doesn’t say what the article says it says.
The payout isn’t capped to the surplus.
Any administrative expense?
No refund to consumers who paid the tax?
Businesses are collection agents. Municipalities get the money.
Municipalities will "budget up” to the money? The state will be pressured to overtax to get a surplus?
Each year that the state has at least a $20,000,000 surplus “in any given year”, the municipalities get “an additional” 1% of the “sales tax collected by businesses located within that municipality” & for each “consecutive year” with at least a $20,000,000 state surplus the return shall increase by 1% per year (7% max). Less than $20,000,000 surplus, the clock starts anew?
Does the bill mean what it says - 1% of the sales tax? Not 1/7 of the sales tax or 1% of the sales each year? Does the language in the bill properly express the actual intent?
Is 100% of RI’s $900,000,000 sales tax “collected by businesses”? If it applies to the total RI sales tax, then: at 1% of the sales tax, $252,000,000 would go to the municipalities in the 1st 7 years if there’s at least a $20,000,000 state surplus each year? At 1/7 of the sales tax or 1% of the sales, the state would pay billions in the 1st 7 years if the surplus is at least $20,000,000?
We can’t tell.
If there is a surplus, the state should refund it to the taxpayers who paid in.
They were overtaxed.
Lorraine F
1:12 pm on Monday, March 4, 2013
With all due respect Representative Malik, you voted for pension reform which cost me money out of my state pension. I agree that the state was in the financial toilet, and something had to be done. I won't argue with that point.
But it appears now you are talking about a potential "surplus" that is contrary to the argument that the state was/is too broke to pay pensions.
I agree with the above post that the numbers are not adding up, it's simply another feel good initiative designed to give the impression that the policy has been well thought out. It isn't.