Let’s acknowledge that Ted Nesi is reporting positive news, here:
Rhode Island has long had some of the highest unemployment taxes in the United States. Last year, however, state lawmakers approved a proposal by Gov. Gina Raimondo to change the formula and reduce the levy. DLT said the new policy saved employers an estimated $30 million this year, meaning the two-year reduction will total $40 million in 2018. …
Separately, DLT said the Temporary Disability Insurance (TDI) tax rate paid by workers will dip in 2018 for the first time in six years, from 1.2% to 1.1%, which the department said is the lowest rate since 1996. TDI taxes fund both that program and the fairly new Temporary Caregiver Insurance (TCI) program often used by new parents.
We should keep in mind, however, that this is a small piece of the cornucopia of big-government policies that suppress Rhode Island’s economy. Moreover, this particular tax relief doesn’t come with any adjustment of government priorities.
Basically, these two changes are like the state’s too-high assumption about its pension returns. The savings come from increased tolerance for risk, not from any actual change in policy. In these two cases, the tolerance for risk may very well have been too low, but throwing businesses a bone by gambling isn’t an approach on which further reforms can build.