The Rhode Island General Assembly convened for its 2011 session on January 4^th. The new session brings a slew of new faces to both the House and Senate chambers, along with the beginning of the gubernatorial term of Lincoln Chafee.  The House of Representatives has 22 new members, with an overall makeup of 65 Democrats and 10 Republicans. Rep. Gordon Fox of Providence was elected to another two-year term as Speaker, and Rep. Nicholas Mattiello of Cranston will serve as Majority Leader. In the Senate, Sen. Teresa Paiva-Weed of Newport was elected to another term as President, and Sen. Dominick Ruggerio of Providence assumes a new role of Majority Leader. The Senate has seven new members, including 31 Democrats and seven Republicans.

RIMA’s primary concern during the coming legislative session involves the projected $295 million budget deficit project for the fiscal year that starts on July 1^st. Legislative leaders are anxiously awaiting Governor Chafee’s first budget, which will not be presented until the middle of March. On the campaign trail, Chafee proposed the notion of a new one percent tax on items currently exempt from the state’s seven percent sales tax. Legislative leaders have voiced concerns about the proposed addition to the sales tax, and the Governor has not indicated if the campaign proposal will be part of his upcoming budget.

The current session will also see a great deal of debate tax issues, specifically the minimum corporate tax and the estate tax. Legislative leaders have voiced a desire to repeal the $500 corporate minimum tax, although such a move will cost the state $23 million in revenue. The estate tax has garnered an equal amount of attention. At present, the tax is applied is the value of a decedent’s estate exceeds $859,350. There is discussion about establishing the threshold amount as an exemption from taxation. No public commitments have been made by legislative leaders on the issue.

Naturally, the session will bring about a slew of perennial bills regarding labor rules, health care mandates, and other provisions both positive and negative for the manufacturing sector. Bills continue to be drafted and introduced each day, and a full synopsis of these introductions will follow in the next report. It is important to note, however, that the Chafee administration is viewed as being much more sympathetic to the desires of organized labor, a sentiment that was not true of the Carcieri administration. This perception will require a redoubling of efforts within the General Assembly to halt adverse legislation before it gets to the Governor’s desk.