PROVIDENCE, R.I. — The Rhode Island House of Representatives voted to cut the state’s hated car taxes and approved a pilot program to provide tuition-free community college, as it passed a $9.2 billion tax-and-spending plan on Thursday night.
The marathon debate on a new budget for the upcoming fiscal year included a few bipartisan causes, most notably the car tax cut. Other measures, such as free college tuition, fell on partisan lines.
The budget passed 64-11, and leaders of the Democratic-controlled chamber said they were pleased, despite having to scale back some priorities to close a $134 million shortfall. Applause broke out after its passage.
Republican House Minority Leader Patricia Morgan stood up before the final vote to call it an “unbalanced budget” built on a “hope and a prayer.” She criticized its dependence on $25 million in unspecified general government cuts.
It moves to the state Senate next week.
The House voted 62-11 on Thursday to pass a measure calling for two years of free tuition for Community College of Rhode Island students.
The $2.8 million pilot is a scaled-back version of a more expansive proposal that had been championed by Democratic Gov. Gina Raimondo. That plan also would have provided free tuition for the third and fourth years at the state’s four-year public colleges.
The revised plan, written by House Democrats who said Raimondo’s was too costly in a tough revenue year, imposes new eligibility requirements on its beneficiaries. Community college students who get the two years of free tuition would have to commit to stay in the state.
Raimondo said in a statement Thursday night that the plan sets Rhode Island “on a path to be the fourth state in America to offer tuition-free community college for every high school graduate.” Her list includes Oregon, Tennessee and Nevada, but excludes New York because it has a means test, and Georgia because it’s a merit scholarship.
It would be a “last-dollar” scholarship for students who aren’t already getting a free education through other scholarships.
Republicans voted against the proposal, and instead unsuccessfully sought to shift the money to repairing K-12 school buildings.
Morgan, the West Warwick Republican leader who is considering a run to unseat Raimondo in 2018, said the state shouldn’t create a “deeply flawed” new entitlement program when the state faces an “increasing and persisting deficit.”
Morgan said she was concerned that it “starts with a pilot and is absolutely guaranteed to grow.”
CUTTING CAR TAXES
The House unanimously voted Thursday to cut the state’s hated car tax.
It would launch the first phase of a proposed six-year process to eliminate the vehicle excise taxes imposed by cities and towns. The tax repeal has been a top priority of Democratic House Speaker Nicholas Mattiello and won bipartisan support.
It’s expected to cost the state $26 million in the upcoming fiscal year to reimburse municipalities for the lost revenue. Fully eliminating the taxes by 2023 would cost about $221 million each year.
The first phase would reduce the taxable portion of a car’s retail value and increase the minimum exemption. It also would exempt any car that’s more than 15 years old from being taxed.
FREE BUS RIDES
Also winning unanimous support was restoring a program that provides free bus rides to low-income riders who are elderly or disabled.
The Rhode Island Public Transit Authority ended its no-fare bus passes in February and began charging those riders a discounted 50-cent fare, plus 25 cents for transfers. Anti-poverty advocates wanted the free rides restored to help some of the state’s most vulnerable residents.
There were no broad-based tax hikes proposed in the budget, but the House voted to increase the state’s cigarette taxes and require e-commerce companies to collect sales taxes when people buy products online.
The House voted 55-20 to raise the cigarette tax from $3.75 per pack to $4.24 per pack starting on Aug. 1. Several Democrats joined Republicans in voting against the tax hike, arguing it will hurt the poor and do little to deter smoking. State officials expect it will bring $7.5 million in new revenue. The last increase was in 2015.
The House also voted to impose new requirements on online sellers.
Online retail giant Amazon already began voluntarily collecting sales taxes in February, but the new requirement would affect other companies. It’s expected to increase state revenue by $19.7 million, not including what’s already being collected from Amazon purchases.
The House voted 63-10 Thursday to increase the minimum wage by 50 cents next year and 90 cents within two years.
The current $9.60-an-hour minimum would rise to $10.10 in January and to $10.50 in January 2019.
Democrats argued that Rhode Island’s current minimum wage is behind its neighbors. It is now $10.10 in Connecticut and $11 in Massachusetts.
Republicans unsuccessfully sought an amendment that would have tied minimum wage increases to the consumer price index starting in 2020, saying that would make it more predictable for businesses.