Chamber Connections BLOG
Chamber Connections BLOG
Governor Raimondo recently announced expanded capacity to provide free COVID-19 asymptomatic testing to key groups of Rhode Islanders, including those who are working in close-contact businesses.
Eligible employees include:
SCHEDULE YOUR COVID-19 TEST TODAY
At the State House
The General Assembly is currently in a semi-holding pattern awaiting word from Washington D.C. There are reports that the federal House and Senate hope to come to a consensus on a state financial aid package by the end of July. With that as a backdrop, the Rhode Island legislature has decided to wait to see how much assistance is coming to the state before preparing a budget for fiscal year 2021. If no aid is provided, the state faces a revenue shortfall of over $500 million. To close that gap would require a reorganization of state and local government and services.
For these reasons, the state budget process will most likely pick up in August. Keep watching Tuesdays for Under the Dome. However, if the Chamber has nothing to report, then no edition will be sent to you.
Senate Finance Committee To Meet in July
On Tuesday, July 7th at 4:00 p.m., the Senate Finance Committee is scheduled to meet to accept testimony from the Governor’s staff concerning Article 8 section 2 (Hotel tax), Article 8 section 3 (US Treasury Offset Program), Article 11 (Economic Development) and Article 12 (Housing). As the Governor stated in a press conference, this budget was put forward at a different economic climate, so it is hard to know which initiatives the Governor still believes are possible in FY2021. The Senate Finance Committee may gain some insight through the testimony provided virtually at this hearing. The public may submit written testimony only. At this time there is no process listed for the public to testify verbally.
Article 8, section 2 proposes to change the way in which the hotel tax is distributed starting July 1, 2020. The distribution percentage of the tax collected changes, but keep in mind the Governor also proposed a 1% increase in the hotel tax (the increase is not part of the hearing on the 7th). Cities and Towns get 20.8% of the tax collected – down from the current 25%. The Providence and Warwick Tourism districts see their percentage lower from 30% to 25%. The Aquidneck Island Tourism District percentage lowers from 45% to 37.5%. Regional Tourism Districts such as the Blackstone Valley see a decrease from 45% to 37.5%. The amount of hotel tax going to the Commerce Corporation lowers in all regions about 3% to 3.5%. And, for the first time, 16.7% of the hotel tax generated would go to the General Fund for State use.
Article 11 seeks to accomplish the following:
Article 12 adds two members to the RI Housing and Mortgage Finance Corporation, and creates an Executive Branch division of housing and community development (DHCD). This division becomes responsible for creating a housing strategic plan and takes over responsibilities of the current Office of Housing and Community Development. Article 12 establishes a “Housing Incentives for Municipalities” program. Municipalities could designate areas as housing incentive districts. The state agency would then be able to help cities and towns with technical assistance as well as providing school impact offset payments (“a payment to a city or town to help offset increased municipal costs of educating eligible students”). In order to pay for the proposed programs, the Governor included in the budget an increase in the real estate conveyance tax. The tax would remain at $2.30 per each $500 in sales price for the first $500,000; and would double to $4.60 per each $500 over $500,000. The revenues collected from the portion of tax levied on the sales price over $500,000 (the new $4.60 per each $500) would distributed as follows: $.30 to the distressed community relief program; $.30 to the Housing and Community Development Restricted Receipt Account; $2.30 to a new housing production fund; $.60 to general revenue; and the remaining $1.10 goes to the municipalities. However, municipalities must pay a 2% administration fee to the division of taxation ($.022).
The meeting will be streamed live online via Capitol TV at http://www.rilegislature.gov/CapTV/Pages/default.aspx. Members of the public wishing to testify may submit written testimony to: SLegislation@rilegislature.gov
On Thursday, July 9th, the Senate Finance Committee will hold a hearing on Article 19 (Workforce Development) of the Governor’s proposed budget. The Committee will also receive a report on the financial status of the Unemployment Trust Fund and “potential employer tax schedule changes.” Like the meeting to be held July 7th, this meeting will be streamed live online via Capitol TV at www.rilegislature.gov/CapTV/Pages/default.aspx . Members of the public wishing to testify may submit written testimony to: SLegislation@rilegislature.gov
Article 19 is a 52 page Article that focuses on the construction industry and a few other areas of policy. If you are a member of the construction industry, the Chamber strongly urges you to read the Article which can be found at http://webserver.rilin.state.ri.us/BillText20/HouseText20/Article-019.pdf
Electrician (Class B) apprenticeship programs still require 8000 hours of on-the-job learning but it appears to eliminate the requirement to complete that training within 4 years. Maintenance electrician (Class M) still have 6000 hours but no longer within 3 years; and Lightning Protection Installers still need 4000 hours but no longer within 2 years. If an electrical apprentice obtained an associate degree in electrical technology, that person can get credit for 288 hours of academic instruction toward the apprenticeship requirement. The Electrician’s Board can also grant 144 hours of credit to apprentices that completed a high school electrical technology program.
Changes to the apprenticeship requirements are also made for electrical sign installers, plumbers, telecommunications, refrigeration technicians, pipefitters, and oil burnerpersons.
Of interest to all Rhode Island taxpayers is a section in Article 19 that only allows construction companies with apprenticeship programs, in every trade needed to build a school, to bid on a school construction project valued at $5 million or more. The Article states that 10% of the workers in each trade on the job must be apprentices, and that the company bidding must verify that it can meet this requirement at the time of bidding – not at the time the job begins. What does this mean in the real world? It means that only union construction companies will be able to bid on these projects, thus reducing the number of competitive bidders on school projects over $5 million. The Article does provide an out for the winning bidder if they determine there is a lack of apprentices in a specific field as long as the company demonstrated a good faith effort to comply. This allowance comes after the bid has been awarded, however. In a merit shop construction company (non-union), apprentices are full time employees of the individual company. The apprentice attends night classes and the individual company provides the on-the-job training requirement with approval by the Department of Labor. If the merit shop company does not have enough work for that apprentice, then – like most businesses – that employee will likely be laid off or terminated. A union construction company is different. The company calls the union hall and relays how many apprentices the company needs for a job. Joe Smith may work for one company one week and a different union company another week. Union construction companies can claim all of the union hall members as potential employees when attempting to qualify for bids. Merit shops can only claim their own full time employees. For this reason, it is extremely unlikely that any merit shop company will be able to bid on school buildings valued at $5 million or more should Article 19 pass.
Article 19 adds a provision to include nonprofit organizations with more than 1000 employees in the Job Development Assessment fee. In 2020, the taxable wage base for this fee is $24,000 per employee ($25,500 for those employers that have an unemployment experience rate of 9.19 or higher); and the tax rate is .21% (.0021).
Finally, this Article increases the earned-income tax credit. The Rhode Island tax credit would remain at 15% of the federal earned-income tax credit until December 31, 2020. The credit would increase to 16% from January 1, 2021 to December 31, 2021; 17% from January 1, 2022 to December 31, 2022; 18% from January 1, 2023 to December 31, 2023; 19% from January 1, 2024 to December 31, 2024; and to 20% effective January 1, 2025.
MICROENTERPRISE STABILIZATION GRANT PROGRAMS:
offering working capital grants to qualifying small business microenterprises adversely impacted by COVID-19.
The State of Rhode Island Office of Housing & Community Development has advised that some of the eligibility requirements that previously disqualified applicants for the MicroEnterprise Grant Program have been amended.
The MicroEnterprise Grant Program is administered by the Office of Housing & Community Development. Eligible businesses are able to receive a one-time grant for $5000.00 which is funded through Community Development Block Grant (CDBG) funds. The amended eligibility requirements are set forth below.
June 2020 Update: Businesses with one owner/employee only may apply. Businesses that received EIDL and/or PPP funds may apply, as long as the adverse impacts on the business exceed other assistance by at least $5,000. Businesses opened in 2019 that meet all other eligibility criteria may apply
The Town of Bristol application: AVAILABLE HERE.
The Town of Barrington application: AVAILABLE HERE
The Town of Warren application: AVAILABLE HERE
For more information regarding the MicroEnterprise Grant program in Warren and to inquire as to eligibility, please contact Bob Rulli, Director, Office of Planning & Community Development via email only, firstname.lastname@example.org.
At the State House
Supplemental Budget Passes
The long anticipated FY2019 supplemental budget was passed by the House and the Senate Thursday evening. The bill passed the House 60-13; it passed the Senate 31-7. The legislation closed the $235 million gap through the use of $92 million in COVID19 federal money, transfer of funds from a few restricted receipt accounts to the general fund (not as much as the original supplemental budget proposed) and use of $120 million from the “rainy day” fund.
Many years ago it was standard practice to pass a supplemental budget as its own stand-alone bill; however, in the past few years, the supplemental budget has been an Article of the following year’s fiscal budget. Last week the legislature returned to the process of old – the supplemental budget only addressed closing the current year’s budget gap before June 30, 2020. Very few options were available to accomplish this required task. If taxes were raised, they could only be collected for twelve days. If cuts were made, those cuts would only count for 12 days. The FY2020 budget will be more encompassing with more true policy decisions. The decision was made to wait until July to deal with the FY2020 budget in the hopes that Congress will provide more aid to states and that the General Assembly and Governor will have a clearer picture of the revenues available. Without further aid, Rhode Island is looking at revenue shortfall over $500 million.
Telemedicine Bill Passes Senate
The Senate passed S.2525 SubA 38-0. As previously reported, this bill codifies in law the Governor’s emergency order to cover telemedicine visits for every healthcare discipline while banning the requirement for co-pays, cost-sharing, or preauthorization. The Chamber does not oppose the use of telemedicine. The Chamber does oppose the ban on co-pays, cost-sharing and preauthorization requirements. Without the ability to curb wasteful or ineffective treatments, the cost of healthcare will increase along with insurance premiums and self-insured companies will see increases in cost.
The following new bills were filed last week:
House Bill No. 8037 Jacquard, Lima, Ucci, Fellela, Shekarchi, AN ACT RELATING TO BUSINESSES AND PROFESSIONS -- BOARD OF MEDICAL LICENSURE AND DISCIPLINE (Increases the maximum fine amount for those found guilty of unprofessional conduct by the board of medical licensure and discipline from $10,000 to $30,000, and establishes a new chapter of the general laws which gives board the authority to levy fines.)
House Bill No. 8050 Casey, Phillips, AN ACT RELATING TO TOWNS AND CITIES -- GENERAL POWERS (Authorizes the city of Woonsocket to require payment of a registration fee for businesses situated in the city of Woonsocket.)
House Bill No. 8052 Amore, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT - TOURISM AND DEVELOPMENT (Includes East Providence in Northern Rhode Island regional tourism district.)
House Bill No. 8054 Casimiro, Craven, AN ACT RELATING TO AGRICULTURE AND FORESTRY -- HEMP GROWTH ACT (Authorizes cities and towns to enact ordinances to address and protect their citizens' public safety and welfare from the impact of hemp cultivation and any of its derivative products.)
House Bill No. 8062 Bennett, Price, Edwards, Quattrocchi, Lyle, AN ACT RELATING TO HEALTH AND SAFETY -- THE GEOENGINEERING ACT (Establishes licensing procedure for persons seeking to engage in geoengineering activity from DEM to protect health/safety/environment of state.)
House Bill No. 8064 Lombardi, Hull, Walsh, Almeida, McKiernan, AN ACT RELATING TO INSURANCE -- COVID-19 PANDEMIC INSURANCE RECOVERY ACT (Allows businesses that had an insurance policy in place for business interruption as of March 9, 2019 to recover from their insurance companies for a COVID-19 business impact.)
House Bill No. 8066 Williams, Shanley, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION--OCCUPATIONAL DISEASES (Establishes that any public safety official/enumerated employee, including essential state workers, who contract the Coronavirus (Covid-19) shall be entitled to a presumption that the infection was caused as a result of the performance of their job duties)
Senate Bill No. 2906 de la Cruz, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT - ENERGY FACILITY SITING ACT (Increases membership from 3 to 5 members/revises siting process to mandate public/municipal participation.)
At the State House
The State House will be open this week to legislators, staff and those with appointments, according to a notice by Department of Administration Director Brett Smiley. Anyone else is welcome to remain outside the building as long as social distancing is maintained.
On Tuesday at 3:00 p.m., the House Finance Committee is scheduled to discuss and to likely vote on a bill to close the $240 million gap in the current year fiscal budget. As this edition of Under the Dome is being written, the supplemental budget is still being discussed and the draft product has not been released. The deficit solution could include use of the State’s rainy day fund, as well as scoops of various programs such as the Oil Spill Prevention Administration and Response fund, the Underground Storage Tank Fund, and Rhode Island Resource Recovery just to name a few. The plan will also likely include use of the federal CARES Act funds. The bill to be considered by the committee will be posted online June 15th at http://status.rilin.state.ri.us/documents/agenda-16911.pdf
The Chamber has submitted a letter asking the legislature NOT to include language in the supplemental budget to make permanent Governor Raimondo’s Executive Order requiring health insurance to cover telemedicine for all medical visits without co-pays, cost sharing or preauthorization from a primary care physician. The Chamber made clear that the business community supports telemedicine as a useful tool to enhance healthcare; but permanently banning any requirement for co-pays, cost sharing or preauthorization protocols could lead to high utilization of the health care system with no way to curb costs or to dissuade unnecessary visits. Additionally, without further defining what must be included in a “visit,” a provider could bill the same amount for a quick phone call, as is billed for an in-person visit that includes taking of vitals, etc. These are details that should be a part of the telemedicine cost-effective discussion prior to passage of legislation. The business community cannot shoulder the expected increase in premiums, especially at this difficult time.
The Senate Finance Committee is scheduled to discuss the supplemental budget Tuesday at 4:00 p.m. in anticipation of House passage. This would allow the Senate Finance Committee to meet again to discuss only changes made by the House floor, if any, and move the bill to the Senate calendar more quickly.
The House and Senate are expected to vote on the supplemental budget this week. Sessions are scheduled for Wednesday and Thursday.
The House Finance Committee met last week. On the agenda was H.7246, An Act Relating to Taxation-Historic Tax Credits 2013. This bill calls for the repeal of the sunset of the Historic Tax Credit program. The program was very successful in the past, but was also very costly. The State has been unable to fund the program the last few years due to budget constraints. If H.7246 fails to pass, the Historic Tax Credit program would be eliminated from statute and restarting a similar program would take action by the House, Senate and Governor. If the bill passes or is amended to extend the sunset for another year or two (more likely), then the legislature could simply fund the program in a future budget without the need to pass legislation to re-create the details of the program.
The Small Business Committee reviewed a presentation given by the RI Hospitality Association outlining what has happened in the restaurant and hotel industries as a result of the COVID19 crisis. Between March 1 and April 16, 60% of operators temporarily closed their businesses, 93% of restaurants laid off or furloughed employees (roughly 40,000 people). One hundred ninety million dollars ($190 million) in restaurants sales were lost in April. The March meals and beverage tax declined 35.6% compared to March 2019. On average, RI restaurant operators reported an 83% decline in sales from May 1 – May 15. On the hotel side, the March hotel tax declined 55.9% when compared to March 2019. Hotel occupancy in April, 2020 was only 21.7%. In April, 2019, the occupancy rate was 65%. These are sobering statistics. As the economy continues to re-open, please consider enjoying food from one of our state’s restaurant treasures.
The following new bills were filed last week:
House Bill No. 8015 Edwards, AN ACT RELATING TO TOWNS AND CITIES - GENERAL POWERS (Allows city/town/fire district to continue operations in state/local emergency when financial budget process is interrupted and to conduct virtual meetings during emergencies retroactive to March 9, 2020.)
Senate Bill No. 2857 Coyne, AN ACT RELATING TO FINANCIAL INSTITUTIONS -- THE ELDER ADULT FINANCIAL EXPLOITATION PREVENTION ACT (Requires employees of regulated financial institutions to report suspected financial exploitation of elder adults to the office of healthy aging and provide authority to the regulated financial institution to place a temporary hold on transactions.)
Senate Bill No. 2864 Conley, AN ACT RELATING TO TOWNS AND CITIES - GENERAL POWERS (Allows city/town/fire district to continue operations in state/local emergency when financial budget process is interrupted and to conduct virtual meetings during emergencies retroactive to March 9, 2020.)
Senate Resolution No. 2867 Metts, Ruggerio, McCaffrey, Goodwin, Coyne, SENATE RESOLUTION CREATING A SPECIAL LEGISLATIVE TASK FORCE TO REVIEW AND PROVIDE RECOMMENDATIONS ON POLICIES PERTAINING TO THE RHODE ISLAND LAW ENFORCEMENT OFFICERS’ BILL OF RIGHTS (LEOBOR) (Creates a 13 member task force to study and provide recommendations on policies pertaining to the RI Law Enforcement Officers’ Bill of Rights, and who would report back to the Senate by February 9, 2021, and expires on May 9, 2021.)
At the State House
The State House remains closed to the public at this time. Committees are holding meetings; however most meetings are related to budget briefings, COVID19 briefings, or advice and consent votes for government positions or commission appointments.
The House Speaker and the Senate President have indicated that the legislature will return to address the current year budget shortfall as soon as next week; and plan to return again in July to pass a FY2021 budget.
The House Committee on Small Business is meeting Tuesday at 4:30 p.m. Presentations will be given by Mark Hayward, RI District Director of the Small Business Administration and Ed Huttenhower, Executive Director of the RI Small Business Development Center. They will be followed by a presentation by Dale Venturini, President & CEO of the RI Hospitality Association and Sarah Brakto Vice President of Advocacy and General Counsel for RIHA. Finally, the committee will hear from David LaHousse, owner of Kay’s Restaurant (Woonsocket) and The Lodge Pub & Eatery (Lincoln), and Kristin Gennuso, co-owner of Chez Pascal (Providence). The meeting can be livestreamed at: http://ritv.devosvideo.com/show?video=cd679c40105a
The Joint Legislative COVID-19 Emergency Spending Task Force will meet Tuesday at 4:00 p.m. This meeting will be televised. The Task Force plans to receive an update on COVID-19 expenditures and encumbrances, nursing home support, and surge hospital data.
The House Corporations Committee held a meeting last week to hear from the Department of Business Regulation relating to their efforts to phase in the re-opening of the State’s economy. Director Liz Tanner told the committee 3500 inspections of businesses have taken place between April 18th and June 4th. These inspections were conducted by 23 part-time DBR staff members and a pool of 18 lottery employees that shifted focus to DBR pending the opening of the casinos. The Department plans to hire additional employees as the lottery folks return to their jobs this week.
DBR houses most of the compliance question response team as well as the complaint unit. Five percent (5%) of customer complaints relate to the failure of other customers to wear masks. Ten percent (10%) of customers are complaining about the failure of employees wearing masks. Director Tanner stated that early on, DBR was also receiving calls about “rumors” of employees coming to work sick. A process has now been created to refer the claim to the Department of Health who will follow up with the business when this occurs.
During the Phase I opening, inspections were conducted on outdoor dining sites and retail sites. While the compliance with face mask wearing and cleaning was high, meeting signage requirements was low, as was compliance with having a written plan. Every open business is required to post signs and to have a written plan. If you have not completed your plan, please go to: https://www.reopeningri.com/resource_pdfs/COVID-19-Control_Plan_Fillable_Template-Final-5.13.20.pdf If a business fails an inspection, DBR will provide information concerning how to comply, and an unannounced re-inspection will occur. With the opening of Phase II now underway, more businesses will be visited by an inspector. If you would like to pro-actively ask for an inspection, you can contact DBR at https://dbr.ri.gov/ . Director Tanner expressed a willingness to go to businesses that wish to have a visit to ensure the operations are in compliance.
A message from Beth Dwyer, Banking Division - bank lobbies that were once closed are now reopening in Phase II. She discussed the slight concern banks had with customers wearing masks in lobbies. The concern is one of financial safety – the banks need to confirm proper identities of individuals withdrawing funds as well as to deter robberies. If you go into a bank lobby, you may be asked to show your face and to then place the mask back in its proper placement. The Division is still awaiting federal guidance relating to the ending of the crisis and the handling of mortgage delinquencies. Currently borrowers have a 90 day grace period. When the crisis comes to an end, it is unclear if individuals will be required to make a large payment to become current on a loan, and therefore not subject to foreclosure, or if the resuming of normal payments will be considered current (or somewhere in between).
A last item of interest was the increase use in telemedicine. The northeast states, have experienced a 15,503% increase in the use of telemedicine. While the fact that individuals are using telemedicine to address health issues instead of ignoring ailments is a positive, it is unclear what effect the use will have on insurance premiums next year. Health insurance carriers look at income and losses and usually submit rate change requests in May for rates to be put in place for the following year. A rate change request submitted for 2021 would not reflect accurate costs associated with a full 365 day a year implementation of telemedicine, because Rhode Island has experienced an increase of telemedicine at the same time it experienced a decrease in elective procedures, and other normal health provider visits (i.e. chiropractic visits). The Chamber will continue research this issue and the potential premium impacts of the use of telemedicine.
At the State House
The State House remains closed to the public at this time. Committees are holding meetings; however most meetings are related to budget briefings, COVID19 briefings, or advice and consent votes for government positions or commission appointments. That said…
Last week, the Senate Health and Human Services Committee passed S.2525 SubA, An Act Relating to State Affairs and Government – the Rhode Island Health Care Reform Act of 2004. The bill requires health insurance plans to cover telemedicine at the same rate it covers in-person patient visits. Governor Raimondo signed an Executive order which calls for insurers to cover telemedicine while the coronavirus emergency continues. S.2525 SubA would make the Executive Order permanent. The bill also states that insurers would not be permitted to impose a deductible, co-payment or other cost-sharing requirement for telemedicine services. Lastly, the bill prohibits health insurers from requiring prior authorization for telemedicine services, which would not only apply to primary care appointments but also to telemedicine services provided by specialty health providers. According to written testimony submitted to the committee (the only type of testimony permitted at this time), this bill would raise the cost of health insurance.
This week, The Senate Committee on Rules, Government Ethics and Oversight will take up S.2846, which would allow Senators to vote by proxy during a declared state of emergency. The presiding officer of the Senate would decide if attendance would cause a hardship for the requesting Senator or if the Senator falls within a high risk category during a contagion situation. The Senator would then receive a “ballot” to vote yea or nay on the bill. It’s not quite clear what would happen if a bill is amended on the floor of the Senate. Presumably the proxy vote would be null and void under S.2846 as currently written.
The House Health, Education and Welfare Committee will meet Wednesday at 4:00 p.m. to discuss the State’s remote learning program for K-12. The meeting can be watched at http://ritv.devosvideo.com/show?video=cd679c40105a and testimony can be submitted by emailing: LCataldi@rilegislature.gov The Committee has stated that it will post all testimony submitted at http://www.rilegislature.gov/Special/comdoc/pages/hhew.aspx
The House Corporations Committee will meet Thursday at 4:00 p.m. to hear a presentation from the Department of Business Regulation concerning the detailed plans for the Re-opening of the Rhode Island Economy. The meeting can be viewed at http://ritv.devosvideo.com/show?video=cd679c40105a and the presentation can also be viewed, once the hearing starts, at http://www.rilegislature.gov/Special/comdoc/pages/hcorp.aspx
RI Department of Revenue Releases April 2020 Cash Collections Report
Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2020 Cash Collections Report for April 2020. The Cash Collections Report, which is issued monthly, compares current fiscal year cash collections by revenue item on a fiscal year-to-date and monthly basis to prior fiscal year cash collections by revenue item. The cash collections report makes no adjustments for the timeliness of the receipt of deposits and provides readers with insight into the state's cash flow over the course of the fiscal year.
Rhode Island Department of Revenue Director Mark A. Furcolo noted: "FY 2020 total general revenue cash collections through April were 0.8% lower than cash collections received last fiscal year through April, a difference of $(27.6) million. The decline in fiscal year-to-date cash collections reflects the initial impacts of the COVID-19 pandemic on the state's economy. FY 2020 personal income tax cash collections through April were $116.7 million less than in FY 2019 through April, likely reflecting the delay in the tax filing and payment deadline from April 15, 2020 to July 15, 2020. FY 2020 year-to-date sales and use tax cash collections were $57.0 million above the same period last fiscal year. Year-to-date FY 2020 estate and transfer tax cash collections continue to be supported by the receipt of $25.8 million in large infrequently occurring estate and transfer tax payment(s) yielding a difference between FY 2020 and FY 2019 year-to-date collections of $16.8 million. General business taxes cash collections were $44.0 million more in FY 2020 through April than in the same period in FY 2019, but the spread between the current fiscal year-to-date and prior fiscal year to date has narrowed considerably since March."
Notable cash collections items on an April fiscal year-to-date basis included: • Total personal income tax cash collections of $1,035.5 million, down 10.1% year-to-date. COVID-19 appears to have reduced personal income tax cash collections by $146.9 million on a fiscal year-to-date basis through April. o Personal income tax withholding payments are up $34.7 million or 3.4% year-to-date, below the 3.3% fiscal 2019 year to date growth rate recorded in April 2019. o Personal income tax refunds and adjustments are $2.1 million, or 0.7%, less year-to-date, vs. the 5.4% increase recorded for the fiscal 2019 year-to-date period in April 2019. o Year-to-date estimated and final payments are a combined $153.5 million less in FY 2020 than in FY 2019, a decrease of 35.1% fiscal year-to-date over fiscal year-to-date. This substantive decline is likely a result of the postponement of the tax filing and payments deadline to July 15, 2020 vs. April 15, 2019 last year. • Year-to-date April 2020 sales and use tax cash collections were up 6.2% in comparison to FY 2019 through April with total non-motor vehicle receipts $59.5 million more, meal and beverage receipts 3.5% more and motor vehicle sales and use tax receipts (i.e., Registry Receipts) $2.7 million less than the prior year. • All other general revenue sources cash collections through April were up $73.4 million relative to last fiscal year. This increase reflects higher business corporation tax cash collections of $16.3 million, higher financial institutions tax receipts of $21.7 million, insurance company gross premiums tax cash collections of $12.0 million, and higher cash collections for estate and transfer taxes of $16.8 million vs. the same period last fiscal year. o The increase in business corporation tax cash collections is primarily attributable to a jump in estimated payments of $35.3 million in year-to-date FY 2020. This increase includes $37.3 million of income tax payments received from pass-through entities on behalf of their shareholders. In the FY 2020 enacted budget, a provision was included that allowed pass-through entities to make income tax payments on behalf of their shareholders at a rate of 5.99% with the shareholders receiving a credit on their personal income tax returns in the amount of the income taxes paid by the pass-through entity on their behalf. It is expected that any increase in estimated payments received from pass-through entities for this purpose will be offset by reduced final payments or increased refunds paid to the shareholders on their personal income tax returns. • Fiscal year-to-date through April 2020 departmental receipts cash collections are $11.9 million, or 3.3% more than in FY 2019 through April due to the transfer of settlement revenues to the general fund by the Office of the Attorney General and higher collections of interest and penalty on overdue taxes. • The lottery transfer in the new fiscal year reflects transfers of $266.8 million in FY 2020 through April vs. $320.0 million in FY 2019 through April. Both the FY 2020 year-to-date transfer and the FY 2019 year-to-date transfer consists of the traditional cash transfer for July through March gaming activity.
Notable month of April cash collections items included: • Decreased April 2020 personal income tax cash collections of $152.0 million, 66.4% below April 2019. o The sharp decrease in April 2020 personal income tax cash collections is due to a sizeable decrease in personal income tax estimated and final payments of $183.0 million, or 84.8%, due to the extension of the filing and payment due date to July 15, 2020 and a modest decrease in withholding payments of $5.2 million, or 5.2%. These declines were offset by decreased refunds and adjustments of $36.2 million, or 41.7%. • Lower April 2020 sales and use tax cash collections of $11.4 million or 12.2% from April 2019 with modestly lower net taxation receipts of $4.0 million and sharply lower meal and beverage sales tax receipts of $5.4 million and motor vehicle use tax receipts of $7.7 million. All these measures were reduced by the halting of dine-in service at restaurants and bars and the stay-at-home order that were in place in March 2020. • Total general business taxes for April are $42.9 million less than the same month last fiscal year, a decrease of 41.6%. This decrease was largely attributable to business corporation tax receipts, which were $22.1 million below April 2019, insurance company gross premiums tax cash collections, which were 28.0% below April 2019, financial institutions tax cash collections, which were $7.0 million lower in April 2020 than in April 2019, and public utilities gross earnings tax cash receipts, which fell $5.0 million below April 2019 cash collections. Each of these tax types were likely impacted by the postponement of the tax filing and payment deadline from April 15th to July 15th. • Decreased cigarette and other tobacco products tax cash collections of $2.1 million, a variance of 18.1% and lower departmental receipts cash collections in April 2020 of $3.2 million, a variance of 12.5%. • Lower receipts from the lottery transfer of $16.2 million, a decrease of 92.6 due to the indefinite closure of the state's two state operated casinos on March 14, 2020. • Higher estate and transfer tax cash collections in April 2020 of $2.8 million, a variance of 237.9%, versus cash collection in April of 2019. The increased estate and transfer tax cash collections are unrelated to the COVID-19 pandemic as they reflect the settling of the estates of decedents who died nine months or more earlier.
The full cash collections report can be found on the Department of Revenue's web site, www.dor.ri,gov, under the Revenue Analysis directory or at this link: http://www.dor.ri.gov/revenue-analysis/2020.php under the State Reports tab.
Questions or comments on the report should be directed to Paul Grimaldi, Chief of Information and Public Relations by e-mail at email@example.com or by phone at (401) 574-8766