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McKee proposes reducing state sales tax little by little


Gov. Dan McKee delivers his State of the State address from the Rhode Island State House in Providence, Tuesday, July 17, 2023. (Capitol TV)
Gov. Dan McKee delivers his State of the State address from the Rhode Island State House in Providence, Tuesday, July 17, 2023. (Capitol TV)
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Small tax cuts highlight new plans from Rhode Island’s governor.

Gov. Dan McKee outlined his proposals in his State of the State address Tuesday night.

It was McKee’s second State of the State since becoming governor in 2021, but his first since winning a first full term in office in November.

With historic amounts of cash on hand, an expected $610 million surplus this year following an even larger surplus last year, McKee pitched cutting the state sales tax.

“We’re going to propose a fiscally-responsible, incremental reduction of the sales tax,” he said.

His plan would cut the sales tax from 7% to 6.85%, with a goal to eventually meet the 6.25% tax rate in Massachusetts.

McKee also wants to stop the annual 3-cent increase on the state gas tax.

“The budget I'll propose will stop this increase and provide nearly $25 million of gas tax relief to Rhode Islanders over the next two years,” McKee said.

After the speech, House Speaker Joseph Shekarchi told NBC 10 News: “I think it’s moving in the right direction. I think the governor’s being prudent. All those little tiny things costs a lot of money.”

Senate Republican leader Jessica de la Cruz, who offered her party’s response to the speech, calls for a 5% sales tax and had wanted to freeze the gas tax altogether last year.

“That’s not real savings if we’re talking about 3 cents per gallon,” de la Cruz told NBC 10 News.

The House Republican leader, Rep. Michael Chippendale, had a different opinion, though.

“I’m not going to criticize him because it is a tax reduction,” Chippendale said.

On housing, McKee touted the $250 million set aside last year -- 39 projects funded, he says -- with more money coming this year.

But housing and homelessness has been a source of criticism.

“I think we wasted precious time. And I don’t mean we as the legislature, but the governor wasted precious time,” de la Cruz said.

There was a months-long homeless encampment outside the State House, and the resignation of new Housing Secretary Josh Saal last week.

“I am committed to building a capable Department of Housing that is up to the challenge and opportunity that this moment represents,” McKee said.

McKee also said it’s time for an assault weapon ban, after the state banned high capacity magazine clips last year.

And the governor wants to boost education spending by $57 million.

“It is time for us to make a targeted modification to the funding formula to improve outcomes and support students with greater needs,” McKee said.

More of the governor’s spending plans will be released with his full budget proposal Thursday.

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