Downloads and drugs taxed under new RI budget plan

Over-the-counter drugs, sightseeing tours and digital downloads would be subject to Rhode Island’s sales tax under a new budget proposal.

The plan unveiled Friday by House lawmakers as part of a $7.7 billion state budget stops short of Gov. Lincoln Chafee’s recommendation to impose the tax on a long list of items and services now untaxed.

The House plan keeps the overall sales tax at 7 percent. Chafee recommended lowering it to 6 percent and adding a new 1 percent tax to other items.

“We just felt that Rhode Islanders were struggling hard enough and that we just could not impose that type of burden on Rhode Islanders,” said Rep. Helio Melo of the House Finance Committee.

“This year our goal was to not only balance the budget, but to put the state in a sounder financial footing for the future. This budget is a giant step in that direction. We have taken a balanced approach to solve this budget problem. It does differ from the governor’s approach, but we certainly took some of his recommendations.”

The proposal is based on a budget deficit projected at $186 million instead of the previous projection of $330 million.

The proposal would give state workers their 3 percent raises instead of putting in their pension plans, as proposed by the governor.

Chafee also sought an additional $10 million for higher education.  The budget sets aside only $4 million.

The House proposal would make up the deficit with cuts in human services and charging a co-pay to participants in RIte Care.

There would be no additional staff for the Division of Motor Vehicles, as requested by the governor.

The full House is expected to consider the proposal as early as next week. It comes after weeks of secretive negotiations between General Assembly leaders and Chafee.

Lawmakers have two weeks to pass a budget before the new fiscal year begins July 1.

The Associated Press contributed to this report.

Article source: http://www2.turnto10.com/news/2011/jun/17/downloads-and-drugs-taxed-under-new-ri-budget-plan-ar-546506/

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