Rhode Island
Hasbro HQ vs. RIPTA funding: What’s at stake under a potential tax on R.I.’s top earners • Rhode Island Current
While Gov. Dan McKee pledged to not raise taxes during his 2025 State of the State address, a crowd of progressive advocates gathered a floor below him rallied for higher taxes on the state’s top earners.
The perennial push to bring a millionaire’s tax to Rhode Island got off to an earlier and more fiery beginning than usual this year. Not surprising, given what’s at stake on both sides of the debate.
To proponents, the tax policy offers a crucial way to boost state revenues, staving off cuts to social services, public transit and health care amid projections of a $223 million structural deficit for the fiscal year that starts July 1. Legislation proposing an extra tax on the top 1% of state earners is slated to be introduced in both chambers this week.
Equally stalwart in their opposition, naysayers insist the tax will cause employers and wealthy residents to seek tax-friendlier pastures.
Including Hasbro Inc. The Pawtucket-based toy and gaming empire is considering a move to Massachusetts, citing the stronger talent pool and access to amenities that Rhode Island lacks.
The absence of a millionaire’s tax, though, is one way the Ocean State can still compete against its northern neighbor, which began a 4% surtax on income over $1 million in 2023.
“It’s a competitive advantage,” House Speaker K. Joseph Shekarchi said, speaking to reporters after Gov. Dan McKee’s State of the State address on Jan. 14. “I think the governor is using that to keep Hasbro and the Hasbro workers in Rhode Island.”
Hasbro did not return multiple inquiries for comment. Company executives have never mentioned state income taxes in publicly released emails or investors’ calls regarding potential relocation plans.
But it’s clear to Laurie White that the company’s calculus on whether to stay or go hinges on costs associated with doing business — including income taxes.
“It’s about two things: access to talent and the cost structure,” White, president of the Greater Providence Chamber of Commerce, said in an interview. “We can’t compete 1-to-1 with Massachusetts on the talent basis. But on taxes, that’s a consideration.”
Rhode Island lacks the appeal of states like New Hampshire or Florida, which don’t tax personal income at all. But it managed to edge out Massachusetts for the first time in a decade last year, in a ranking of state business tax climates by the Tax Foundation.
Rhode Island ranked 41st among states with the most business-friendly tax policies, while Massachusetts fell to 46th. The report cited Massachusetts’ millionaire’s tax as a key reason for its lower ranking compared with past years.
“We do not want to lose that momentum,” Olivia DaRocha, a spokesperson for McKee, said in an email. She also raised an oft-cited argument among opponents of wealth taxes: that states that raise taxes see their top-earners move elsewhere.
A separate Jan. 7 analysis by the Tax Foundation linked lower state income taxes to where people moved within the United States in fiscal year 2024.
The Commonwealth saw the sixth-largest net loss in residents in fiscal 2024, losing .39% of its population, based on an analysis of U.S. Census Bureau data. Rhode Island’s population shrank ever-so-slightly, down .03%, according to the report.
“Rhode Island should learn a lesson from its neighbor to the north about targeting residents’ incomes,” Katherine Loughead, senior policy analyst and research manager for the Tax Foundation, said in an interview. “Rhode Island is already trending in the wrong direction. Outbound migration could be expected to get considerably worse if Rhode Island was to adopt a significant tax increase.”
Not so, according to Alan Krinsky, director of research and fiscal policy for The Economic Progress Institute, which has supported a Rhode Island millionaire’s tax. Ahead of a forthcoming Institute research paper on the “tax migration myth,” Krinsky poked holes in the Tax Foundation’s analysis.
For one thing, Massachusetts was already losing residents at a similar clip even before voters approved the millionaire’s tax. Also noteworthy to Krinsky are the sizes of population swings, which range from .65% loss in Hawaii to 1.26% gain in South Carolina.
“That’s hardly a mass exodus,” Krinsky said.
Meanwhile, other studies suggest taxes hold little sway over where people move. New York saw the number of millionaire households increase by 17,500 from 2020 to 2022, despite imposing a higher tax on income over $1.1 million during that time period, according to a December 2023 report by the Fiscal Policy Institute. Residents who earned over $850,000 a year were less likely to move out of state than people in lower-income brackets, the report found.
Loughead acknowledged that taxes are just one factor in a complex decision of where to move: cost-of-living, particularly housing costs, also plays an important role. New England overall has seen its population decline because of a higher median age and migration to southern states.
Fiscal and policy experts largely agree it’s too early to draw conclusions from Massachusetts’ tax on millionaires. Initial state estimates predicted a $2.2 billion revenue boost from the surtax in fiscal 2024. The Massachusetts Department of Revenue projected $2.4 billion revenue from the tax in fiscal 2026 budget projections, according to news reports.
Less abstract than future forecasts about revenue and population are the financial woes facing the Rhode Island Public Transit Authority, hospitals, and social services. All the more reason, Krinsky said, to consider a surtax on top earners.
Rep. Karen Alzate, a Pawtucket Democrat, plans to introduce legislation this week calling for a 3% surtax on the top 1% of state earners. Preliminary number-crunching suggests that, if approved, the tax would bring in $190 million in revenue per year, affecting residents with net taxable income of $650,000 or more.
Alzate, who introduced similar, though not identical legislation last year, hoped the looming budget deficit might make previous critics take a fresh look at her proposal.
“This is the year to do it,” she said. “We are facing a real deficit and we cannot afford to cut social services and education.”
McKee’s initial fiscal 2026 spending plan did not include higher taxes on top earners. Senate President Dominick Ruggerio has already signaled his opposition. Shekarchi pledged to remain open to all ideas.
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Rhode Island
RI Lieutenant Governor Sabina Matos meets in Israel to 'strengthen relations' | ABC6
PROVIDENCE, R.I. (WLNE) — The Office of Rhode Island Lieutenant Governor Sabina Matos announced she traveled to Israel on Monday to meet with the Consulate General of Israel to New England.
The meeting was planned as part of a legislative delegation to strengthen the relationship between Rhode Island and Israel.
Lieutenant Governor Matos is set to return from Israel on Jan. 31.
Matos’ office said no taxpayer funds were used for the travel.
Rhode Island
Speaker Shekarchi met with influential people in R.I. politics while on a Florida vacation. Will he run for governor? – The Boston Globe
Sabitoni is the vice chair of the University of Rhode Island Board of Trustees.
Shekarchi downplayed the idea that the two were meeting about next year’s governor’s race, which the speaker and his $3.1 million (and growing) campaign account can’t seem to avoid being asked about despite his own denials that he is planning a run.
Shekarchi also said he met with lobbyist Lenny Lopes, who earns $5,000 a month to lobby for Meta (Facebook), while in Florida. As you might imagine, Meta opposes Governor Dan McKee’s budget proposal to impose a 10 percent tax on digital advertising.
The bigger picture: If you believe Rhode Island politics weren’t discussed when Shekarchi and Sabitoni met in Florida, I’ve got a bridge in East Providence to sell you.
Sabitoni is precisely the kind of person a Democratic candidate for governor would want in his or her corner, but there’s one hiccup at the moment: Sabitoni has been among McKee’s top supporters since he took office in 2021.
Shekarchi has maintained that he won’t run against McKee, but he hasn’t ruled out entering the race if McKee were to take a look at his middling approval ratings and take a pass on running for reelection next year. McKee has repeatedly said he does plan to run again.
Meanwhile, Democrat Helena Foulkes, who finished second against McKee in the 2022 Democratic primary, has all but formally declared that she is running again next year.
What’s next: All Rhode Island politicians have to report their campaign fund-raising totals on Friday night, and you can expect Shekarchi, McKee, and Foulkes to continue growing their sizable war chests.
In many ways, time is on Shekarchi’s side. While he doesn’t quite have the name recognition as McKee or the personal wealth of Foulkes, he has more power as the speaker than either of them. It has been notable that he has expressed more frustration with McKee’s Department of Housing in recent weeks.
I was up bright and early to discuss today’s edition of Rhode Map on “12 News This Morning.”
This story first appeared in Rhode Map, our free newsletter about Rhode Island that also contains information about local events, links to interesting stories, and more. If you’d like to receive it via email Monday through Friday, you can sign up here.
Dan McGowan can be reached at dan.mcgowan@globe.com. Follow him @danmcgowan.
Rhode Island
Rhode Island School of Design Votes Against Israel Divestment
Rhode Island School of Design’s (RISD) board of trustees announced last week that it has voted against a proposal to divest from Israel presented by the school’s Students for Justice in Palestine chapter (RSJP). The board’s rejection comes in the wake of the group’s three-day occupation of a campus building last May, when it called for the nonprofit college and museum to divest as part of a larger movement across academic institutions in the United States.
Five RSJP representatives met with the board’s Investment Subcommittee and administrators including President Crystal Williams in October, a spokesperson for RSJP told Hyperallergic. During the meeting, the representatives proposed the institution sever its financial ties to companies linked to Israel’s war on Gaza and other anti-Palestinian violence and discrimination, according to a divestment proposal document shared with Hyperallergic.
As of June 2023, RISD’s endowment stood at $396 million. A spokesperson for the school declined to comment on the institution’s endowment or disclose what percentage is invested in companies linked to Israeli interests.
“The reason why we create art and seek to understand it in a thoughtful and complex way is because we collectively believe that it holds a real bearing on global society,” RSJP’s divestment proposal reads.
“If we as an institution do not put into practice our ability to effect influence as global changemakers, we render hollow RISD’s fundamental value of the power of art and design and the power of an art institution to do good in the world,” the proposal continues.
In a statement emailed to RISD community members and posted on the art school’s website, the board of trustees said RSJP’s proposal did not meet the criteria outlined in its Statement on Divestment. Those criteria, adopted in May 2015, stipulate that while its duty is to “achieve the maximum possible return” on investment, “in rare circumstances … the Board of Trustees may also in its sole discretion take political and social considerations into account.”
For divestment to occur under these guidelines, a proposal would need to “implicat[e] an issue of importance to RISD as an institution and to its constituents as a whole, and not solely to a segment of its constituents,” and “would be likely to have a meaningful impact on the resolution of that issue.”
According to the RSJP’s divestment proposal, 800 of the school’s over 2,000 students signed in favor of their demands, including disclosure and divestment, in a petition in fall 2023. The group also called for a third-party student referendum vote. Some universities, including Columbia University and Pomona College, rejected disclosure and divestment demands from students, despite referendum votes indicating that most of them were in favor of such actions.
In May, the SJP chapter of the California Institute of the Arts (CalArts) and Faculty for Justice in Palestine were successful in pushing the school to commit to a full disclosure of its investments. The school also vowed to create a student-led Ethical Investment Workgroup that would work with the board of trustees to divest from entities connected to human rights abuses.
During the occupation of the second floor of RISD’s Providence Washington (Prov-Wash) building last May, which RSJP renamed “Fathi Ghaben Place” in honor of the Gazan artist who died after Israeli authorities blocked his travel for medical treatment, students held art-making sessions and teach-ins. The action was disbanded following expulsion warnings.
RISD’s board of trustees has divested before: Nearly a decade ago, the board unanimously voted to withdraw its investments in fossil fuel industries, two years after, students from the group Divest RISD staged a sit-in, the Portland Press Herald reported.
RSJP’s divestment proposal also calls for the institution to back out of any investment in the “exploitation of natural resources,” referencing the Hague Regulations of 1907, which limits an “occupying state” from using the resources of the “occupied population,” according to Amnesty International. The student organization additionally called for RISD’s divestment from weapons manufacturers, military contractors, and companies tied to Israeli settlements in the Occupied West Bank.
In an Instagram post this week, RSJP alleged the administration did not engage with them in good faith, claiming that “several trustees” did not attend on short notice.
“As long as the administration refuses to divest, they are participants in the violence,” RSJP told Hyperallergic. “We will not rest until our demands are met.”
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