NEW: Raimondo Submits FY18 Budget, Banks on Collecting $30 Million from Internet Sales Tax

NEW: Raimondo Submits FY18 Budget, Banks on Collecting $30 Million from Internet Sales Tax

Rhode Island Governor Gina Raimondo submitted her tax-and-spend plan for Fiscal Year 2018 at the General Assembly on Thursday, which includes an Internet sales tax when Amazon and others online retailers begin collecting -- and remitting -- a 7% sales tax to Rhode Island to total a budgeted $34.7 million in revenue. 

Administration staff unveiled budget details Thursday morning, which include Raimondo's plan to cut Rhode Islander's car tax bill by 30% by requiring the tax to be assessed at fair trade-in value, and her proposal to spend $10 million this year for the "RI Promise" program of paying for two free years of college tuition -- which will increase to $30 million by FY21.

See Budget Documents HERE

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Department of Administration Director Michael DiBiase told press and staff that the budget is about "investing in growing jobs, with no broad based tax increases, while maintaining a safety net for Rhode Islanders most in need."

DiBiase said that four of the budget's "highlight" areas include the RI Promise initiative, the car tax plan - which Speaker Mattiello has indicated he might not think goes far enough, "record investments in K-12 spending," and the remote sales tax proposal.

"Online sales and the fact that online sellers do not collect sales tax has created a structural problem for Rhode Island's budget — our sales taxes have been flat," said DiBiase of the tax that Amazon collects in 33 states, but not Rhode Island. "We think mostly due to online sales, we’re able to capture the growth. The revenue number is $35 million dollars — it improves our structural deficit problem. It’s an important fiscal development."

Budget Details Emerging

The Administration touted on Thursday that the changes to the car valuations will reduce total car tax bills by "about $58 million in calendar year 2018.  The state will reimburse cities and towns for the revenue loss.

The Governor formally submitted her proposal to increase the state's minimum wage from $9.60 an hour to $10.50 and hour -- and increased penalties for labor law violations that the administration states will generate $775,000 in revenues.

In addition, the Governor proposed a manufacturing investment tax credit of $3.25 million focusing on adding new equipment and adding jobs; Raimondo put forth moving $1.5 million from the "Wavemaker" fund that was to provided tax credits for repayment of student loans to a First Wave "Closing Fund" to provide state officials with "flexibility when working with business interested in locating to or expanding in Rhode Island."

Raimondo has proposed adding 8 more DMV staff to address wait times, and merging the EMA into DPS to provide for a "single, consolidated agency focused on protecting Rhode Island," with a civilian Department head.