It hardly needs to be reiterated that the country is going through tough times and that government bottom lines at every level throughout the nation have been battered by the resulting loss in revenue and increase in welfare expenses. Rhode Island has been particularly hard-hit, with the fourth highest unemployment in the nation after Nevada, California and Florida as of January.
The result has been soaring deficits and drastic cuts to the budget. Last year, the state eliminated its deficit partially by slashing aid to state and town governments. Several weeks ago, we saw the havoc these cuts have wreaked, when Providence made international news for firing all its teachers. In fact, the city simply gave its teachers notice that they could be fired, but the controversy illustrated the real harms of continuing budget cuts.
With all these considerations in the background, we were cautiously supportive of Gov. Lincoln Chafee's '75 P'14 plan to increase some taxes instead of cutting spending, particularly because he plans to use some of the revenue to protect funding for public universities in Rhode Island — truly an important goal. And after besting general election opponents who campaigned against more taxes, Chafee can claim a popular mandate of sorts for his plans.
Some of the changes make sense. Rhode Island's sales tax is relatively high at 7 percent, yet a lot of items — like coffins — are exempt. Chafee's plan to lower the tax rate to 6 percent while broadening its reach is a commonsense solution to a difficult problem. But other changes give us pause. Chafee wants to tax other currently exempt items such as clothing, water bills and textbooks at 1 percent. We understand that that rate is extremely low, and for some citizens, it would not have a heavy impact. And the fact that all clothes are tax-exempt leads to the absurd situation where fur coats are tax free in Rhode Island. We think a proposal by state Sen. Elizabeth Crowley, D-Central Falls, Pawtucket and Cumberland, to tax clothes costing more than $500 at the full rate is reasonable. But for many low-income citizens, every dollar counts. Taxing their utility bills and T-shirts could impose a hardship.
Additionally, increasing the already steep cost of textbooks could make life even harder for college students — if it does not drive them to buy their books on Amazon to avoid the taxes. We know that few Rhode Islanders will shed a tear for Brown if the General Assembly effectively taxes its students through a small tax on textbooks. Our tax-exempt status as an institution, after all, contributes to the shortage of property taxes brought in by the city and state. We understand our obligation as residents of Rhode Island to contribute to solving the difficulties that we face as a community, and we will not reflexively oppose any tax that might affect us.
But the state should think through the consequences of any changes it makes to the tax code. New taxes should not fall disproportionately on poor, disadvantaged or vulnerable demographics — doing so would be counterproductive, given the reason for needing to raise state revenues. We hope the General Assembly keeps these important considerations in mind when it begins the difficult but essential task of ensuring that the budget is balanced in a way that is fair to all the state's residents.
Editorials are written by The Herald's editorial page board. Send comments to editorials@browndailyherald.com.
