Malik: Share Surplus With Cities, Towns

Any rosy financial news for Rhode Island should be shared with its cities and towns, according to Jan Malik (D-Dist. 67, Barrington, Warren).

Malik has introduced a bill, 2013-H 5250, that would require the state to return a portion of any budget surplus that exceeds $20 million to the state’s municipalities.

Under Malik's proposal, a $20 million state surplus would trigger a return to cities and towns at a rate of an additional one percent of the sales taxes collected by businesses in that community.

For each consecutive year that there is a minimum of a $20 million surplus, the return of the portion of the sales tax collected in each city and town would increase by one percent per year, up to a maximum of 7 percent.

“A budget surplus is not solely the state’s doing," said Malik. "It is generated in large part because of good sales tax collections in the cities and towns."

“It seems only fair to me that any financial benefit to the state in the form of a budget surplus should be shared with the municipalities from which the added revenue came,” he said.

“We have put about enough tax stress on local communities and their taxpayers,” said Malik. “Our high sales tax is driving business across the border. The extra tax on food and beverages is putting local restaurants in an unfair competitive position with restaurants in nearby states. It’s time for the state to give back to the municipalities, and sharing a portion of a $20 million budget surplus is a good place to start.”

Malik's bill has been assigned to House Committee on Finance. Co-sponsors include Rep. Joseph McNamara (D-Dist. 19, Warwick, Cranston), Rep. Samuel Azzinaro (D-Dist. 37, Westerly), Rep. Arthur Corvese (D-Dist. 55, North Providence) and Rep. Brian Newberry (R-Dist. 48, North Smithfield, Burrillville).