Rhode Island needs a proven leader who understand the urgent need to bring about economic development through creation of a business friendly environment. Too often, tax cut initiatives focus on just one tax and not the entire tax system. We need an overhaul of our tax system that is based on principles of fairness, competition, efficiency and transparency. Our state’s tax structure is one issue that weighs heavily upon the minds of business leaders in the private, public, and nonprofit sectors. We need a tax strategy that will convert Rhode Island’s tax system from an impediment to job growth into a competitive advantage.

Mayor Allan Fung proposed a $200 million tax reduction package earlier this year. No candidate for Governor has proposed a more comprehensive tax reform plan to grow jobs in our state. In the first year of its implementation, this plan will make Rhode Island one of the most attractive states for business taxes and business friendliness in the Northeast. The resulting expansion of our tax base will make possible additional tax reform in the years to come.

Corporate tax: Reduce the corporate tax rate to 6.5% making Rhode Island’s one of the lowest in the Northeast. The corporate tax rate is one of the first considerations for any business owner deciding on a location and we must make Rhode Island competitive with neighboring states. This reduction would also send a signal to business owners in Rhode Island that we value them and are committed to helping them succeed in our state.

Estate tax: Match the federal estate tax exemption to permit small business owners to remain in Rhode Island and pass the results of their lives’ work onto the next generation without crippling estate tax liability. The current Rhode Island estate tax structure makes it prohibitively expensive for some in the next generation to continue a family business and drives other business owners out of the state. The General Assembly has taken a preliminary step in this regard, but we must complete this reform.
Minimum corporate tax: Reduce the $500 minimum corporate tax to $250. This tax applies to every entity; even those with no income. For many small business owners struggling to make their first profit, a $500 tax can make a real difference. In subsequent years, the goal would be to reduce this tax further or eliminate it altogether.

Sales tax: Reduce the state sales tax to 6.25% to become equal with Massachusetts and lower than Connecticut (6.35%). In the first year, this would help to eliminate the flight of our consumers, particularly those in border communities, across state lines. The future goal is to reduce the sales tax further to attract consumers from Massachusetts and Connecticut into our state to support Rhode Island businesses and increase our state sales and income tax revenues through additional economic activity.

The above reforms were estimated to result in an initial reduction in revenue (without accounting for any increased revenue from the resulting increase in economic activity) of $200 million. This amount would be less now that the General Assembly has taken preliminary steps by reducing the corporate tax rate to 7% and increasing the estate tax exemption to $1.5 million. The anticipated reduction in revenue would be offset by refusal to make the annual repayment of the 38 studios bonds and a reduction in the growth of state spending from the projected 4% to 2%, which is roughly the rate of inflation. Additional savings would come from reductions in state personnel and a projected operating surplus of $70 million. These responsible spending reductions are similar to those undertaken by Mayor Fung in the City of Cranston, which resulted in a stabilized economy and real job creation without a loss of essential services for residents.^[34]

Rhode Island has a long legacy of economic prosperity. For decades, we were a manufacturing powerhouse – and with manufacturing driving our economic growth, Rhode Island was able to grow a healthy, prosperous middle class. Our state thrived, and so did our families.

But when the global economic climate changed, our state failed to adapt. Since then, we’ve relied on risky, poorly-planned gambles and insider deals. That approach has left us with the highest unemployment rate in the country, and a reputation as a state that is unfriendly to economic development.

But there is a lot to be hopeful about in Rhode Island. We have some of the greatest colleges and universities in the country; we’re a first-class tourist destination; and we have incredibly hard-working and entrepreneurial people.

Gina’s jobs plan takes a comprehensive approach to economic development and takes advantage of our state’s unique competitive edges.

Manufacturing

Jobs in the manufacturing sector have a big impact on the economy: they pay higher wages than jobs in other industries and provide good benefits. They also have a powerful ripple effect across the economy: every new manufacturing job creates another 1.6 local service jobs, and each dollar in manufacturing sales adds another $1.34 to the local economy.

Manufacturing jobs are coming back to the United States for the first time in years. Since 2010, our country’s economy has added more than half a million new jobs in manufacturing, gaining an average of more than 12,000 new jobs per month.

As governor, Gina will:

• Establish the Rhode Island Innovation Institute (RI II), a center dedicated to taking the good ideas coming out of our colleges and universities and turning them into products that we make right here in Rhode Island. Click here to watch a quick video on how it would work.
• Use our state’s competitive advantages to become a leader in marine science, food technology and medical device manufacturing.
• Create a “Manufacturers’ Toolkit” to help our existing manufacturer grow, expand product lines and gain exposure in new markets.

Infrastructure

Rhode Island spends more on its roads and bridges per lane mile than almost any other state, yet we are consistently ranked among the worst in the country. 70 percent of Rhode Island roads are in poor or mediocre condition. And 411 of our state’s 757 bridges are considered structurally deficient or functionally obsolete, and they cost Rhode Island motorists an average of $476 per year in vehicle repairs.

Rebuilding Rhode Island’s roads and bridges will put people to work in the short term, while ensuring that we have the infrastructure we need to be competitive for years to come. As governor, Gina will:

• Allow cities and towns to immediately upgrade their worst roads and bridges through low-interest loans in an expanded Municipal Road and Bridge Revolving Fund, a program she helped create as Treasurer.
• Establish a Road and Bridge Funding Formula to pay for ongoing maintenance so that our local roads never become as deteriorated and dilapidated as they are now.
• Establishing a stable, sustainable funding formula for RIPTA that is less reliant on a gas tax, a source of revenue that actually decreases as more Rhode Islanders choose to take the bus.

Workforce Development

Today’s jobs require 21st-century skills and a new level of technical competency. Employers are looking for critical thinking abilities; knowledge of science, engineering and technology; and computer proficiency. If we are going to position our state to succeed, our workforce development efforts need to reflect this reality.

As governor, Gina will:

• Pair CCRI with local businesses to develop curriculum and training programs in skills that they need.
• Expand internship and apprenticeship opportunities for CCRI students.
• Create opportunities for our high school students who choose not to attend college by expanding career and technical training throughout the state.

Tourism

Rhode Island is home to hundreds of miles of gorgeous coastline, dozens of beautiful beaches, renowned restaurants, breweries and vineyards, and countless museums and cultural attractions. Together, these industries support thousands of jobs and bring millions into our state. But our tourism industry has even more untapped potential.

By investing in a coordinated marketing effort, we can create more than 5,000 new jobs and generate millions in spending and tax revenue. As governor, Gina will:

• Develop a highly-targeted, coordinated state-wide marketing and advertising campaign to expose Rhode Island to people around the world and across the country.
• Make Rhode Island a world-class culinary destination by improving the branding of our state’s thriving food industry.
• Improve our state’s tourism infrastructure, with new signage on highways, new visitors centers and efforts designed to move tourists to various attractions throughout the state.

Small Businesses and Startups

Small businesses are the backbone of our state. They represent over 95 percent of all employers in Rhode Island, and employ more than half of our state’s private sector workforce. Yet too often, our state makes it difficult to run a small business, or to start a new one. A recent study reported that half of Rhode Island’s small businesses spend more than $2,000 a year complying with regulations and a third of small businesses have to hire a consultant just to understand the regulations. Rhode Island needs to partner with its small businesses. That’s why, as governor, Gina will:

• Review all of the state’s regulations within her first year of office, and eliminate overly burdensome or duplicative rules.
• Create a Concierge Service to help small businesses navigate state and federal regulations, and connect them with the resources they’ll need to thrive.
• Create a single, online source for all state and municipal permitting.

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To inspire business owners to embrace Rhode Island and commit to our future, we must reform the way our government operates. As Governor, Allan Fung will stand up to the insider politics and special deals that cast a dark shadow on the reputation of our state. The most egregious example right now is the 38 Studios loan guaranty. Mayor Fung called on Governor Chafee and the General Assembly to place a hold on repayment of the 38 Studios bonds – even to place funds in escrow if necessary – pending the outcome of ongoing investigations into serious allegations of fraud and misrepresentation. He also called for an investigation by the Securities and Exchange Commission into the possibility of insider trading.

Mayor Fung has proposed a series of fundamental government reforms including term limits for legislators, a line-item veto, and reestablishment of State Ethics Commission authority over the General Assembly. These reforms will bring added transparency and accountability to state government. Mayor Fung strongly supports the call for a Constitutional Convention to bring about these and other critical government reforms.

Restoring Ethics Commission oversight of the General Assembly will subject state legislators to the same degree of accountability that has been imposed on other elected office holders and appointed public officials. Oversight by an independent body such as the Ethics Commission, with authority to enforce ethics standards, can serve as a check on concentrated political power and help to provide accountability and balance that are otherwise lacking.

Providing line-item veto authority to the governor will also help to restore a balance of power to Rhode Island government and force accountability on the legislature. The line-item veto and enhanced veto override protection would act as a financial accountability amendment to our State Constitution by allowing the governor to challenge specific budget items. Governors in forty four other states have similar authority, which would help to focus attention on items that are fiscally irresponsible and eliminate last minute budget deals that may be added without public hearings or input.

Term limits for the General Assembly are crucial to government reform and accountability. All of Rhode Island’s statewide general officers, as well as many local elected officials including mayors and town councilors are subject to term limits and it is time to put the same restrictions on the General Assembly. Term limits would help to limit the power of any individual legislator and encourage new candidates who wish to serve the public to run for office. Mayor Fung would propose a five term/ ten year limit for Rhode Island’s State Representatives and Senators in the General Assembly.^[34]

Interactions with state government can often be burdensome and confusing. And the decision-making process can seem arbitrary and opaque. We must fix the way Rhode Island's state bureaucracy works with citizens and small businesses, assuring top-quality customer service.

As treasurer, Gina implemented a streamlining management strategy called Lean Management. With this effort, her Treasury team eliminated a 900-claim backlog in the Crime Victims Compensation Program and streamlined processes and workflow in the Unclaimed Property Program, shortening claim-processing time from six to eight weeks to about two weeks. During her tenure, Treasury has returned more than $8 million to Rhode Islanders through that program. These techniques can be expanded across state government.

As governor, Gina will:

• Review all government regulations within her first year in office to eliminate duplicative or burdensome rules that prevent small businesses from growing.
• Establish single sourcing for permits and mandatory time limits for turning around applications.
• Create an Office of Economic Empowerment, an initiative in the governor’s office dedicated to creatively improving the way that government delivers services, and breaking down the silos between government agencies that create waste and inefficiency

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