STATE HOUSE — Sen. Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln) and Rep. Gregg Amore (D-Dist. 65, East Providence) introduced legislation Tuesday, adding a new tax bracket for income earned over $500,000. It would add one percentage point to the 5.99% top rate with incremental revenue dedicated to education.
Revenue from the new tax bracket would be directed to a restricted receipt account for funding education from kindergarten through grade 12. The proposal would have no impact to any Rhode Islander making less than $500,000 per year. This proposal follows collaboration between Senator Pearson and Representative Amore on substantial education reform legislation passed during the last legislative session. Senator Pearson also recently chaired a Senate task force who issued a report identifying additional areas of investment needed in our K-12 education system.
“During the last session, the House and Senate came together to enact substantial reforms to our education system here in Rhode Island. 2020 is a year to ensure full implementation of these efforts which will require a commitment of resources. Our proposal today is one that is measured ensuring we have the dollars needed to invest in our education system while preserving our tax competitiveness,” said Representative Amore.
“Investing in our education system is of paramount importance not only to students today but our economy in the long term. We know that a well educated and talented workforce will continue to be the key for Rhode Island’s success. By asking the top 1% of earners in Rhode Island to contribute 1% more we can add resources to ensure all Rhode Islanders have the opportunity to get a good education,” said Senator Pearson.
While ensuring new resources to education it was important for both Senator Pearson and Representative Amore to maintain the improved tax competitiveness ranking Rhode Island achieved several years ago after reforming the personal income tax. Weighing in on the proposal, Gary Sasse, Director Hassenfeld Institute for Public Leadership commented:
“Modestly increasing Rhode Island’s top marginal income tax rate by one percent for incomes over $500,000 — the top one percent of Rhode Islanders — should not have a negative impact on the state’s economic competitiveness. This proposal would result in a fairer tax system that provides urgently-needed resources to our underperforming schools, encouraging economic growth and opportunity.”
“Each year we must not only look at expenditures as part of the annual budget process but also look at revenue. Making this adjustment keeps us competitive for personal income taxes while adding new resources for education and relieving pressure to potentially increase other taxes or fees that would hurt our tax competitiveness,” said Senator Pearson.
The proposal in the Senate is co-sponsored by Senate Finance Committee Chairman William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket) and members of the Senate Finance and Education committees including Senators Louis P. DiPalma (D-Dist. 12, Middletown, Newport, Tiverton, Little Compton), James A. Seveney (D-Dist. 11, Bristol, Portsmouth, Tiverton) and Adam J. Satchell (D-Dist. 9, West Warwick).