Where the Unexpected Windfalls Go

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In preparation for my weekly spot with John DePetro, this afternoon, I revisited Katherine Gregg’s Providence Journal article about the 7.5% in raises (actually 7.7%, compounded) state employees under Council 94 are expected to receive as part of a deal with Democrat Governor Gina Raimondo.  Raimondo, you may have heard, is facing a tough election this year.

These paragraphs jump out:

… the events at Council 94 union headquarters coincided with the announcement by the Raimondo administration that year-to-date revenue collections are running $46.5 million ahead of the estimates adopted at the state’s official Revenue Estimating Conference last November, on which Governor Raimondo’s $9.3 billion budget proposal was based.

A statement issued by the Department of Revenue said: “The major contributors to this surplus are personal income tax revenues, $43.6 million more than expected; estate and transfer tax revenues, $5.3 million above expectations; departmental receipts revenues, $4.5 million more than expected; and public utilities gross earnings tax revenues, $5.4 million ahead of estimates.” A few smaller sources of revenue fell short of projections, yielding the net surplus of $46.5 million.

Gregg notes that the new raises will be competing with the pleas of other special interest groups in their annual “more money” dance (which, admittedly, sometimes means more than a budgeted reduction).

But have you noticed that an unexpected increase in revenue is never cited as an opportunity to lower tax rates?  To the extent that it comes up, reduced taxes are typically handled in such a way as to make a special interest out of taxpayers, as with the specific elimination of the car tax.

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In any event, time will tell whether Raimondo’s bid for the labor vote creates enough of a boost to save her job.  Valley Breeze publisher Tom Ward is skeptical of her chances, generally:

My take on it: There is no amount of money that will save her candidacy. The unfixable UHIP that continues to cost taxpayers more millions, the now-late and already unpopular tolls that create a new budget shortage, the “scooping” of energy conservation monies – and now, grabbing 911 emergency funds for God knows what. She owns all of it! She will lose a two-way race soundly, and needs to keep independents like Joe Trillo in the race to save her.

We’ll see.  The thing with full ballots is that a candidate can win with a small plurality, as Rhode Islanders keep learning… to our detriment.



  • Mike678

    “But have you noticed that an unexpected increase in revenue is never cited as an opportunity to lower tax rates?”

    Or perhaps take this opportunity to pay down debt,e.g., all the bond debt we have taken on because tax revenue fell short of perceived need.

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