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This Week At the State House
As we approach the last few weeks of session, most of the bills mentioned in this publication will be scheduled for a vote by the committee, with a few hearings sprinkled throughout. The House Finance Committee has not posted the budget yet, but is expected to do so at any moment. Tuesday, May 28th H.7837, An Act Relating to Labor and Labor Relations – Workers Compensation is scheduled for a vote in the House Labor Committee at 3:45. The Senate version (S.2472) has already passed the Senate. The bill calls for independent contractors to file annually with the Department of Labor. A similar bill passed last year and became effective January 1, 2024. The court reviewed the statute and determined the language required further revision to clarify the intent of the Act. H.7837 specifies that independent contractors must file annually for each client to be legally considered an individual contractor. The process is simple. To file DWC-11-IC form online, go to: https://dlt.ri.gov/workers-compensation/independent-contractors If you are a company that hires independent contractors, the Chamber encourages you to verify the form has been filed. The Senate Finance Committee will take testimony on S.2347, An Act Relating to Taxation – Tax on Gains From the Sale or Exchange of Real Property at the Rise (approximately 5:00). The bill creates a new tax on gains realized from the sale of real property held for six years or less. Gain as a percentage of basis (tax cost) Years property held by transferor 0-99% 100-199% 200% or more Less than 4 months 60% 70% 80% 4 – 8 months 35% 52.5% 70% 8 months - 1 year 30% 45% 60% 1 - 2 years 25% 37.5% 50% 2 - 3 years 20% 30% 40% 3 – 4 years 15% 22.5% 30% 4 – 5 years 10% 15% 20% 5 – 6 years 5% 7.5% 10% Failure to pay the proper tax or to attempt to evade the tax comes with a penalty of up to two years in prison and a fine of $10,000 or five times the amount of the tax that was owed. If you wish to submit testimony, send it to [email protected] The bill can be viewed in its entirety at https://webserver.rilegislature.gov/BillText/BillText24/SenateText24/S2347.pdf A second bill scheduled for hearing at the Rise in Senate Finance is S.2366, An Act Relating to Public Utilities and Carries. This bill creates a tiered rate system for electricity and natural gas customers whose household income level is below 150% of the federal poverty level and who are eligible for LIHEAP assistance or Medicaid. For these households, the plan envisions capping electric rates to ensure that they pay no more than 3% of their income on electricity or 6% of their income if the house utilizes electricity as a sole source of heat. The program will be funded by increased rates assessed on all other customers. The most current US Census estimates 10.8% of population in Rhode Island meets the definition of living in poverty. The census does not say how many are living at 150% of the federal poverty level. The Rhode Island total population at the time of the census was 1,095,962. Testimony may be submitted at [email protected] The Senate Judiciary Committee will vote on S.3056, An Act Relating to Corporations, Associations, and Partnerships – Rhode Island Business Corporations Act. The bill allows the Division of Taxation to share certain information with the Secretary of State’s office. If a business fails to pay taxes to the state as required under law of the period of a year, and no settlement agreement has been entered, a notice of intent to revoke the company’s charter will be sent to the business. If not corrected, the charter will be revoked. This bill would take effect January 1, 2025. Wednesday, May 29th If you are in the real estate business, are in the market to buy or sell a house, or if you are a house inspector, contact your legislator quickly. H.7015 SubA, An Act Relating to Businesses and Professions is scheduled for a vote in the House Corporations Committee at the Rise (approximately 5:00). The Senate version (S.2120) had a hearing in April and was held for further study, keeping it alive for possible consideration. H.7015 bans anyone, other than a licensed electrician, from testing wires, conduits and apparatus which includes fixtures, lighting, etc. What this means, is that a potential buyer’s house inspector would no longer be able to inspect switches, lights, or look at a panel to alert the buyer to potential problems. Buyers, should they wish to have the dwelling’s electrical system included in an inspection would need to hire a licensed electrician to perform the inspection – within the customary ten-day inspection period. Under current law, a house inspector is permitted to look at these items and recommend the buyer seek advice from a licensed electrician if something appears amiss. If passed into law, the bill would take effect January 30, 2025. Thursday, May 30th The Senate Finance Committee will be taking testimony on S.2355, An Act Relating to Taxation – Personal Income Tax. The bill imposes a Rhode Island personal income surtax of three percent (3%) on taxable income over $1,000,000, with the existing three-bracket personal income tax structure remaining in place. This surtax would be imposed on taxable income after all modifications, standard deductions, and exemptions have been applied; and would apply to tax years ending December 31, 2025 and beyond. The additional revenue would be placed in a restricted receipt account to be used for child care, public education, roads and bridges and public transportation. Testimony can be emailed to [email protected] Action Needed Now – Contact Your State Senator and Representative Even if you have spoken to you legislators months ago when the Chamber first issued a “Call for Action,” we ask you to contact your state representative and state senator again concerning H.7171/S.2121 – expansion of temporary care giver benefits. H.7171 and S.2121 Acts Relating to Labor and Labor Relations – Temporary Disability Insurance
What should I say? Talk about the difficulties your business is having finding employees in the current market. Talk about what will happen to your business if one, two, three or ten employes take leave at the same time. If you have experienced yourself, tell the story. If you know of a business that is struggling in Massachusetts following the expansion of paid leave, share the story. It is not hard; and the message or phone call does not have to be lengthy. In a state like Rhode Island, standing up for your business can seem like a daunting task. But that is exactly why we need voices like yours to tell lawmakers the real-world impact of certain policy choices. If they do not hear your story, they cannot be expected to understand the impacts legislation can have on your business. Name E-mail Address Representative Edith H. Ajello [email protected] Representative Christopher R. Blazejewski [email protected] Representative Nathan W. Biah [email protected] Representative Rebecca M. Kislak [email protected] Representative Anthony J. DeSimone [email protected] Representative Raymond A. Hull [email protected] Representative David Morales [email protected] Representative John J. Lombardi [email protected] Representative Enrique George Sanchez [email protected] Representative Scott A. Slater [email protected] Representative Grace Diaz [email protected] Representative Jose F. Batista [email protected] Representative Ramon A. Perez [email protected] Representative Charlene M. Lima [email protected] Representative Barbara Ann Fenton-Fung [email protected] Representative Brandon C. Potter [email protected] Representative Jacquelyn M. Baginski [email protected] Representative Arthur Handy [email protected] Representative Joseph M. McNamara [email protected] Representative David A. Bennett [email protected] Representative Camille F.J Vella-Wilkinson [email protected] Representative Joseph J. Solomon, Jr. [email protected] Representative K. Joseph Shekarchi [email protected] Representative Evan P. Shanley [email protected] Representative Thomas E. Noret [email protected] Representative Patricia L. Morgan [email protected] Representative Patricia A. Serpa [email protected] Representative George A Nardone [email protected] Representative Sherry Roberts [email protected] Representative Justine A. Caldwell [email protected] Representative Julie A. Casimiro [email protected] Representative Robert E. Craven, Sr. [email protected] Representative Carol Hagan McEntee [email protected] Representative Teresa Ann Tanzi [email protected] Representative Kathleen A. Fogarty [email protected] Representative Tina L. Spears [email protected] Representative Samuel A. Azzinaro [email protected] Representative Brian Patrick Kennedy [email protected] Representative Megan L. Cotter [email protected] Representative Michael W. Chippendale [email protected] Representative Robert J. Quattrocchi [email protected] Representative Edward T. Cardillo, Jr. [email protected] Representative Deborah A. Fellela [email protected] Representative Gregory J. Costantino [email protected] Representative Mia A. Ackerman [email protected] Representative Mary Ann Shallcross Smith [email protected] Representative David J. Place [email protected] Representative Brian C. Newberry [email protected] Representative Jon D. Brien [email protected] Representative Stephen M. Casey [email protected] Representative Robert D. Phillips [email protected] Representative Alex Marszalkowski [email protected] Representative Brian Rea [email protected] Representative William W.O'Brien [email protected] Representative Arthur J. Corvese [email protected] Representative Joshua J. Giraldo [email protected] Representative Brandon T. Voas [email protected] Representative Cherie L. Cruz [email protected] Representative Jennifer A. Stewart [email protected] Representative Karen Alzate [email protected] Representative Leonela Felix [email protected] Representative Mary Duffy Messier [email protected] Representative Katherine S. Kazarian [email protected] Representative Brianna E. Henries [email protected] Representative Matt S. Dawson [email protected] Representative Jennifer Smith Boylan [email protected] Representative Jason Knight [email protected] Representative June Speakman [email protected] Representative Susan R. Donovan [email protected] Representative John G. Edwards [email protected] Representative Michelle E. McGaw [email protected] Representative Terri Cortvriend [email protected] Representative Marvin L. Abney [email protected] Representative Alex Finkelman [email protected] Representative Lauren H. Carson [email protected] The following new bill was filed last week: House Bill No. 8312 McEntee, Spears, Bennett, Fogarty, McGaw, Cortvriend, McNamara, Boylan, Kislak, Carson, AN ACT RELATING TO HEALTH AND SAFETY -- BEVERAGE CONTAINER DEPOSIT RECYCLING ACT (Establishes beverage container recycling to be regulated by DEM.)
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Warren Town Manager, Brian Sullivan, Welcomes Planet Fitness to Warren at their Ribbon Cutting on Tuesday, May 21, 2024. CLICK HERE to learn more   Empowering Industries with Innovative Automation Solutions
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Do you have an interest in running for office,- time is running out. Declaration Forms must be filed with your local board of canvassers on June 24th, 25th or 26th. The form can be found at https://vote.sos.ri.gov/Forms/elections/Forms/24DeclarationofCandidacy.pdf It must be filed out and filed with an ORIGINAL signature. After the declaration form is filed, a candidate must collect signatures from other registered voters in the same district. To run for state senate, you need 100 signatures. To run for state representative, you need 50 signatures. Action Needed – Contact Your State Senator and Representative We continue to ask you to contact your state representative and state senator concerning four bills (H.7171/S.2121 – expansion of temporary care giver benefits and H.7793/S.2467 – expansion of family leave benefits). H.7171 and S.2121 Acts Relating to Labor and Labor Relations – Temporary Disability Insurance
H.7793 and S.2467, Acts Relating to Labor Relations – Rhode Island Parental and Family Medical Leave Act, increase the number of benefit weeks provided to employees from thirteen weeks every two years, to twenty-four weeks every two years. While the Chamber understands that this is unpaid leave, the employer must still keep the employee’s job waiting for the person’s return. In a state like Rhode Island, standing up for your business can seem like a daunting task. But that is exactly why we need voices like yours to tell lawmakers the real-world impact of certain policy choices. If they do not hear your story, they cannot be expected to understand the impacts legislation can have on your business. This Week At the State House Tuesday, May 21st Financial Institution tax changes will be heard in the Senate Finance Committee at 3:00 in room 211. In 2015, the Chamber was heavily involved in a debate that resulted in the General Assembly adopting a major change in the way it taxes businesses operating in multiple states. While some businesses are taxed based on the proportion of sales in Rhode Island versus the sales in other states (referred to as a single sales factor test), financial institutions are taxed based on a calculation that considers the payroll generated in the state, the property valuation in the state and the sales generated in the state (referred to as a three-factor test). The single sales factor was chosen for most businesses because the three-factor test penalizes businesses that increase the number of employees in the state and that add to their physical footprint here. At the time of adoption, the use of the three-factor test made sense for financial institutions given the other economic programs available to this industry. However, those programs are no longer in use, creating a much different landscape for some financial institutions. The Governor’s Amendment #19 request to the budget allows a banking institution to choose to continue the use of the three-factor test, or to choose the single sales factor test. Once chosen, the institution must stick with that test for five years. Massachusetts recently passed legislation adopting the single sales factor test and included financial institutions. This change creates a strong economic incentive for these businesses to move across the border. The House Fiscal Analysis estimates the revenue loss at $7.7 million for FY2025 and $15.4 million for FY2026. However, that must be considered along with the potential revenue loss in income and corporate taxes should a financial institution choose to relocate. Twenty-six states have adopted the single sales factor apportionment for banks. Wednesday, May 22nd H.8242, An Act Relating to Health and Safety – The Rhode Island Comprehensive Health Insurance Program, will be heard in the House Finance Committee at the Rise (approximately 5:00) in Room 35. This chapter creates the Rhode Island comprehensive health insurance program (RICHIP), as an independent state government agency with a Director, and authority to hire staff as necessary. RICHIP would annually establish benefits package for participants, including a formulary and a list of other medically necessary goods, as well as a procedure for handling complaints and appeals relating to the benefits package. The agency would have the authority to establish RICHIP provider reimbursements and a procedure for handling provider complaints and appeals and review budget proposals from providers. Except for emergency and urgently needed service, RICHIP would not pay for healthcare services obtained outside of Rhode Island unless the out-of-state provider agrees to accept the RICHIP rate for out-of-state providers and the services are considered medically necessary care. H.8242 declares it unlawful for a private health insurer to sell health insurance coverage to qualified Rhode Island residents that duplicates the benefits provided under this legislation. How is this program funded? It begins with a 10% payroll tax where employers are responsible for 80% and employees are responsible for 20% (the employer may choose to pay up to 100%). The tax is calculated using a prior three-year average for the wages. Self employed individuals pay 100%. After the initial rate is utilized, the Director may readjust the rates to require higher income individuals to contribute more and reduce the tax on lower income individuals. The bill also calls for “a progressive contribution based on unearned income, i.e., capital gains, dividends, interest, profits, and rents.” The bill can bill reviewed in its entirety at https://webserver.rilegislature.gov/BillText/BillText24/HouseText24/H8242.pdf If you wish to submit testimony, send the letter to [email protected] by 1:00 Wednesday. Thursday, May 23rd The Treasurer’s Baby Bond Trust Fund is scheduled for hearing in the Senate Finance Committee at the Rise in room 211. After January 1, 2025, upon birth of an uninsured child or a child that qualifies for Rite Care, the Treasurer would transfer $3000 from the General Funds to a trust fund for that child. The funds would gain interest over time and could be used for higher education or trade school, apprenticeship program, ownership of a home in Rhode Island, purchase of a vehicle from a Rhode Island dealer or ownership of a business. The following new bill was filed last week: House Bill No. 8274 J. Lombardi, Hull, Potter, Stewart, Morales, Felix, Tanzi, Ajello, Handy, Sanchez, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKPLACE PSYCHOLOGICAL SAFETY ACT (Protects bullying/psychological abuse in workplace inflicted upon employees by employers/co-employees/provides civil remedies to affected employees/fines against employers/imprisonment/fines against co-employees.) http://webserver.rilin.state.ri.us/BillText/BillText24/HouseText24/H8274.pdf House Bill No. 8279 Diaz, Cortvriend, Handy, Fogarty, Shallcross Smith, Ajello, Slater, Kennedy, Azzinaro, Perez, AN ACT RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- CONSUMER ENFORCEMENT OF ASSISTIVE TECHNOLOGY DEVICE WARRANTIES (Requires manufacturers of assisting technology devices to make available to independent repair providers/the owner of the device, any documentation/parts, software/other items intended for use with the equipment/parts, including updates to software.) http://webserver.rilin.state.ri.us/BillText/BillText24/HouseText24/H8279.pdf Thank you to all who Joined us for our Monthly Mingle at the Blount Clam Shack on Wednesday, May 15th! Despite the rain, our event saw a fantastic turnout, creating an atmosphere of warmth and camaraderie. A huge thank you goes to Pattie Gaudreau of Blount Clam Shack for generously treating all our guests to a complimentary drink and serving up mouthwatering seafood delights. The vibrant tunes of Dos Burros added to the festivities, courtesy of sponsorship from Marshall Building & Remodeling. Congratulations to Tim F., our lucky 50/50 winner! Don't miss out on the next Monthy Mingle on June 12, 2024 - mark your calendars and join us for an evening of good company, great food, and memorable moments. Photographs by Devon McWilliams Photography (www.devonmcwilliamsphotography.com). BayCoast Mortgage Joins Exciting New Program, Giving Homebuyers a Lift Up
SWANSEA, MA – Buying a home can bring a sense of joy, satisfaction, and accomplishment. But with rising prices in the local housing market combined with today’s uncertain economy, not everyone will have the opportunity to experience the excitement that comes with homeownership. This can be especially true when considering wealth differences in our South Coast community. That’s why BayCoast Mortgage (baycoastmortgage.com), a leading lender in Southern New England, is proud to announce it is participating in an exciting new program that aims to increase homeownership opportunities throughout our community, with the goal of promoting a more diverse, equitable, and inclusive home-buying environment. That new program is called Lift Up Homeownership. Initiated by FHLBank Boston, the Lift Up program provides funding to member financial institutions, including BayCoast Mortgage, to award down payment and closing cost assistance grants of up to $50,000 to people of color including Black/African American, American Indian, Alaska Native, Asian (Native Hawaiian or Pacific Islander), Hispanic, or Latino borrowers earning up to 120% of the area median income (AMI) and are first-time homebuyers. Lift Up was put in place to address barriers that many people of color face when purchasing a home, including limited savings for a down payment and the racial financial gap that exists in many area cities and towns. “As part of the BayCoast family, it is our mission to provide exceptional service and financial solutions for our community,” said Nicholas L. Christ, President and CEO of BayCoast Mortgage. “Our partnership with FHLBank Boston will help expand affordable housing opportunities in the South Coast communities we serve by offering critical down payment and closing cost assistance. We’re proud to assist our neighbors as they pursue homeownership and the American Dream.” A total of $500,000 is available through Lift Up Homeownership, which is a purchase-only program for one-to-four unit properties located in New England. Grants will be available on a first-come, first-served basis. For further details about the program and to learn if you may qualify, please call BayCoast Mortgage at 877-466-2678 or visit our website at baycoastmortgage.com. About BayCoast Mortgage BayCoast Mortgage Company, LLC is a wholly owned subsidiary of BayCoast Bank, serving MA, RI, CT, NH, PA, NJ, MD, VA, SC, NC, and FL, offering a wide variety of home mortgage products, including FHA, VA, Land, Construction, Conforming and Jumbo Loans. Visit baycoastmortgage.com or call 877-466-2678.Contact Us to Learn More John McMahon Senior Vice President Community Engagement 508-675-4488 [email protected] baycoastmortga Last Week At the State House
Revenue Estimating Conference – The Numbers Are In The conferees completed their estimates during a seven-hour meeting Friday. The bottom line – in FY2024, total taxes are up $26.8 million with general revenues up $47.7 million. For FY2025, taxes are estimated to be $10.2 million more than originally thought, with general revenues up only $9.7 million more than anticipated. The debate over FY2024 personal income taxes was the longest debate as the tax filing deadline was extended to July 15th this year. By declaring a state of disaster during the flooding of many Rhode Island cities and towns, the State was required under federal law to extend the tax filing date. This extension left the conferees asking themselves if final tax collections will track similarly to 2023 because taxpayers have not filed yet, taking advantage of the delayed deadline, or have taxpayers filed as usual and tax payments are lower than anticipated. In the end, the FY2024 personal income tax collection was set at $1,785,200,000 (down $68.7 million). The FY2025 estimate is $1,856,600,000 (down $53.6 million from November’s estimate). Business Corporate taxes are $67.6 million higher than anticipated in FY2024 ($372.5 million), and $30.7 million higher in FY2025 ($345 million). Sales and use tax collections are also up. FY2024 collections are estimated at $1.64 billion, an increase of $11.4 million; FY2025 collections are estimated at $1.7 billion, an increase of $19.5 million. Lottery revenues are estimated to be lower. The category “lottery” includes revenue from the casinos, lottery games and igaming. FY2024 saw a slight decrease of $8 million ($428.8 million). The FY2025 estimate is $449.4 million which is $9.4 million less than anticipated during the November, 2023 estimating conference. With caseload estimates also down slightly, the General Assembly will have small amounts of money to work with as they craft the final budget over the following four to six weeks. The Washington bridge remains in the forefront of all discussions related to spending. This Week At the State House Tuesday, May 14th The House Finance Committee is meeting Tuesday at the Rise (approximately 4:45) in Room 35. H.7486, An Act Relating to Taxation – Personal Income Tax – Capital Gains, changes the holding period requirement from five years to one year and lowers the tax rate - unless the asset is a “non-owner occupied asset.” Non-owner occupied assets valued at $1 million or more would be subject to a capital gains tax rate of $5.00 for each one thousand dollars ($1,000) or fractional part of the assessed value on properties worth at least one million dollars $ 2,000,000; and at the rate of $6.00 for each $1,000 or fractional part of the assessed value on properties worth at least $2,000,000. Businesses involved in investment management services would be subject to a 19% “carried interest fairness fee” if Massachusetts, Connecticut and New Jersey pass the same fee. Wednesday, May 15th The Senate Labor Committee is scheduled to take testimony on S.2470, An Act Relating to Labor and Labor Relations – Minimum Wages. The meeting will be held at 4:30 pm in room 313. This bill would dramatically change the operations of many companies and many sole proprietors in the state. S.2470 changes the definition of “employee” for the purposes of workers’ compensation, unemployment insurance and TDI qualification. It proposes to adopt what is sometimes referred to as the “ABC” test. A person would be deemed an “employee” unless the person can meet all three tests: (1) the person is free from control and direction of the hiring entity (2) the person performs work that is outside the usual course of the hiring entity’s business; AND (3) the person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed. Use of the ABC test would make it very difficult for some professions to work as an independent contractor. For example, an independent computer technology person could not work as an independent contractor for any business that has an IT person already on staff (even if that person is out on family leave), since it would not qualify as outside the usual course of business. Any business with a government affairs staff person, would likely not be able to hire an independent lobbyist. It is difficult to imagine all of the possible contractors that may get swept up and reclassified as an employee of multiple businesses, meaning multiple businesses would pay workers compensation, unemployment compensation and TDI for the same person. The third prong of the test allows independent contractors to be hired if that trade is an established trade or occupation customarily known for having independent contractors. The third part of the test gives no assistance to emerging technology and innovation. S.2237 is also scheduled for hearing in the Senate Labor Committee. The bill proposes to increase the tipped wage (also referred to as cash wage) from the current $3.89 per hour to $6.75 per hour January 1, 2025. It is important to understand that “tipped wage” does not equate to the hourly wage paid to the employee. Both federal and state law require an employee to be paid minimum wage. If the employee does not make minimum wage when the tipped wage and customer tips are added together, the employer must make up the difference. If they fail to do so, the employee can file a complaint with the Department of Labor and back wages will be paid and the employer will be penalized. Another consequence of raising the minimum wage and the tipped wage is an increase in premium pay. Rhode Island remains the only state in the country that requires employers to pay premium pay to employees who work Sunday and holidays as part of their normal forty (40) hour work week. Testimony on both bills may be emailed to [email protected] The following new bill was filed last week: House Bill No. 8262 Corvese, Azzinaro, Cardillo, McNamara, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION -- BENEFITS (Amends 4 sections relating to the workers' compensation benefits dealing with increasing the amount of dependent benefits payable to a totally disabled employee comprising this year's annual omnibus bill.) http://webserver.rilin.state.ri.us/BillText/BillText24/HouseText24/H8262.pdf Senate Bill No. 3068 Ciccone, F. Lombardi, Bissaillon, Britto, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION -- BENEFITS (Amends 4 sections relating to the workers' compensation benefits dealing with increasing the amount of dependent benefits payable to a totally disabled employee comprising this year's annual omnibus bill.) http://webserver.rilin.state.ri.us/BillText/BillText24/SenateText24/S3068.pdf Last Week At the State House
Revenue Estimating Conference – Economic Forecast Last week S&P Global Market Intelligence (the State’s Economic Consulting Firm) provided their fiscal predictions for the upcoming years. From a United States perspective, the consultants expect growth to slow in 2024, GDP to slow to 1.8% per quarter and the unemployment rate to gradually increase over the next couple years. They expect real corporate borrowing costs to remain up and mortgage rates to decline slowly. Following the US overview, the consultants then take a closer look at Rhode Island. The State’s employment market has remained strong, with growth in the first quarter of 1.9 % compared to the US average of 1.4%. Maine and New Hampshire are starting to experience an employment slow down and Rhode Island is expected to see the same. Our growth came from administrative support services, health services and “professional, scientific and technical” services. Rhode Island has regained all jobs lost during the pandemic, earlier than expected. In the housing market, it came as no surprise that the state has experienced incredible price increases in housing. Rhode Island home prices increased 61% from 2019-2023, 11th in the country. While other states saw increases, the consultant stated those states experienced the change in prices due to domestic migration, but Rhode Island did not see that significant increase in migration. Our price increase likely comes from housing inventory issues. So what are the predictions? Employment growth will decelerate, but remain positive through FY2025 then slip into a modest contraction in retail, profession, scientific and technical, and construction employment. The unemployment rate will increase from 3.6% this fiscal year (FY2024) to 4.1%, then 4.3% and to 4.5% by FY2027. The increase in unemployment will change the current increasing annual wage percentage growth from 7.2% in FY2024 to 3.7% in FY2025, 3.6% in FY2026 and 3.6% in FY2027; which will also cause consumer spending to flatten out. The economists also expect the median cost of existing single-family homes to decrease in 2025, 2026 and 2027, then go back up slightly in 2028 and 2029. This Week At the State House Tuesday, May 7th The Senate Commerce Committee is scheduled to vote on S.2273, An Act Relating to Commercial Law – Unfair Sales Practices. The bill requires businesses that offer automatic subscription renewals or continuous offers to provide notice to the consumer prior to the automatic renewal of such subscription, provide clear and conspicuous cancellation information with such notice, and provide notice in the manner in which the consumer entered into the contract for automatic subscription renewal in the first instance. Businesses that offer automatic subscription renewals or continuous service offers must provide contract terms to the consumer in a clear and conspicuous manner, prior to the consumer’s engagement in the contract for automatic subscription renewals. If passed, the law would take effect on January 1, 2025. Senate Judiciary has a vote scheduled for S.3041, An Act Relating to Courts and Civil Procedure – Decisions, Special Findings and Assessment of Damages. S.3041 declares that an individual’s “assumption of the risk” when entering a location is not a bar to recovery for injuries or damages to property. As an example, if a person goes to a baseball game and gets injured by a ball that was hit by a batter, the person is considered to assumed the risk of this type of injury when entering the ballfield. If a golfer is standing on the green and gets hit by a stray golf ball, the person is usually considered to assume the risk by stepping on to the golf course. S.3041 changes the legal landscape. Wednesday, May 8th The Governor has asked the House and Senate to consider an amendment to his proposed budget. Amendments are forwarded to the Finance Committees each year as revenues and expenditures change over the months following the submission of the Governor’s Budget. On Wednesday, the House Finance Committee will take testimony on Governor’s Amendment #12. This amendment includes $24.0 million in State Fiscal Recovery Funds allocated to the Unemployment Trust Fund administered by the Department of Labor and Training. The goal is to restore the Unemployment Trust Fund to the pre-pandemic levels, leaving the business community held harmless for the depletion of the fund as a result of the closure of businesses and the fraudulent claims submitted during the pandemic. Thursday, May 9th You may have seen advertisements in the paper or heard commercials on the radio concerning an effort to pass legislation affecting the salaries of health care providers in Rhode Island. South County Hospital has launched a campaign to pass H.8072, An Act Relating to State Affairs and Government – The Rhode Island Health Care Reform Act 2004 – Health Insurance Oversight. The bill changes the 2004 Act by requiring health insurance contracts with hospitals and physicians (beginning in 2028) to pay at rates not less than the regional average rate for services which would include Connecticut and Massachusetts. The rate would be recalculated every two years. Prior to 2028, the bill requires the rates to be set at a rate at least 33.3% of the Rhode Island payment shortfall plus the rate of healthcare inflation They believe this legislation is necessary to ensure adequate access for all Rhode Islanders to primary care and specialty doctors, and advanced practice providers; and to improve the sustainability and quality of Rhode Island’s hospitals. The proponents acknowledge this bill will result in increased costs and premiums; but they also believe that without these adjustments, Rhode Island health care insurance will be insurance that cannot be used, because there will not be enough providers to handle patients. Providers get paid more in Rhode Island’s neighboring states, so it is harder to hire employees. They predict the additional cost to insurance premiums will be $25 per month per employee. The Rhode Island Office of Management and Budget completed a fiscal note on H.8072 and its companion senate bill S.2722. The Office of Health Insurance Commissioner (OHIC) estimates it will need $750,000 to conduct the data study required under the bill. That study must be completed every two years, so this expense must be budgeted in the appropriate years going forward. OHIC also needs one FTE at an estimated total annual cost of $160,964. The fiscal note focuses on state employees as attempting to determine state-wide impact is outside the scope. The following information is taken verbatim from the RIOMB fiscal note: “OHIC notes that the provider categories impacted by the bill are hospital inpatient, hospital outpatient, and professional physician. The estimated costs of these claims in 2024 are $36.7 million for hospital inpatient, $49.5 million for hospital outpatient and $37.3 million professional physicians. Currently, rate increases are adjusted by inflation which is assumed at 4 percent year over year. The bill requires rates to be adjusted by 33.33 percent of the Rhode Island payment shortfall plus the rate of healthcare inflation. Therefore, OHIC estimates the bill to increase hospital inpatient and professional physician claims by 11.6 percent and hospital outpatient by 12.9 percent year over year.” FY2025: Current law (baseline increase of 4%): Hospital Inpatient $38.2 million Hospital Outpatient: $51.5 million Professional Physician $38.8 million H.8072/S.2722 Costs: Hospital Inpatient $41.0 million Hospital Outpatient: $55.9 million Professional Physician $40.4 million Assuming 30,000 members on state insurance, incremental impact to the state’s plan equates to approximately $27.92 per month per employee or $335.07 per year. FY2026: Current law (baseline increase of 4%): Hospital Inpatient $39.7 million Hospital Outpatient: $53.6 million Professional Physician $46.5 million H.8072/S.2722 Costs: Hospital Inpatient $45.8 million Hospital Outpatient: $63.2 million Professional Physician $46.5 million In FY2026, the bill results in total increase of $21.7 million compared to current law. Assuming 30,000 members on state insurance, incremental impact to the state’s plan equates to approximately $60.36 per month per employee or $7244.36 per year In FY2027, the bill results in a total increase of $35.3 million compared to current law. Assuming 30,000 members on state insurance, incremental impact to the state’s plan equates to approximately $97.92 per month per employee or $1,175.04 per year. Though an analysis of these expenditure and corresponding impact on market wide insurance premiums is beyond the scope of this fiscal note, the Budget Office consulted with OHIC to gather additional information and context. OHIC’s analysis finds that the annual cost to a family of four is project to be $3,768 to $4,057. Over three years, a family of four is estimated to contribute $7,165 to $7,598 of future compensation toward achieving regional rate parity by 2028. This does not include other factors, such as prescription drug trend, that will increase Rhode Islanders’ premiums and out of pocket health care costs in the future. The following new bill was filed last week: Senate Bill No. 3027 Ruggerio, McKenney, Felag, Sosnowski, LaMountain, Lawson, AN ACT RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND COMPUTATION (Reduces the sales tax from seven percent (7%) to six and one-half percent (6 ½%).) http://webserver.rilin.state.ri.us/BillText/BillText24/SenateText24/S3027.pdf Senate Bill No. 3032 Picard, Pearson, AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX (Authorizes a retroactive tax credit for tax yr 2022/thereafter/allowing investment tax credits to be passed through to the personal income tax returns of eligible Sub-S corporation shareholders/limited liability company members who meet certain conditions) http://webserver.rilin.state.ri.us/BillText/BillText24/SenateText24/S3032.pdf Senate Bill No. 3041 F. Lombardi, AN ACT RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY -- DECISIONS, SPECIAL FINDINGS AND ASSESSMENT OF DAMAGES (Adds the doctrine of assumption of risk to the current comparative negligence statute.) http://webserver.rilin.state.ri.us/BillText/BillText24/SenateText24/S3041.pdf |
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