PROVIDENCE, R.I. (AP) — Rhode Island Gov. Lincoln Chafee on Wednesday called on lawmakers to reduce corporate income taxes, boost spending on education and bolster workforce development to encourage the state's slowly rebounding economy.
In his annual state-of-the-state address to lawmakers, Chafee said rising revenues and receding deficits show the state is on a path to recovery. He used the speech to outline his $8.2 billion budget proposal, which comes without any increases in taxes or fees and no deep spending cuts.
"Two years ago, when I was sworn in as governor, Rhode Island was facing a $295 million deficit, our unemployment rate was 11.4 percent ... and cities and towns were on the verge of collapse," he said in remarks prepared for the address to lawmakers. "Our state workforce was demoralized. A gloomy cloud of negativity gathered over our state. It takes time for the sun to break through, but it is."
The independent governor's proposal would lower the corporate income tax rate over three years from 9 percent to 7 percent. Currently, the state's rate is the highest in New England, but Chafee's proposal would drop the rate below its five neighbors.
Chafee also wants lawmakers to approve a $3 million workforce training program that would reimburse businesses who offer internships, and seeks to use $3 million in federal funds to offset the cost of child care for struggling parents.
Finally, Chafee is recommending $30 million in new funds for public education and another $8 million in additional higher education money to avoid tuition increases at state colleges and universities.
Lawmakers are likely to make big changes to the spending plan before approving it in the spring.
Laurie White, president of the Providence Area Chamber of Commerce, said she likes a lot of what she sees in Chafee's proposal. That's a contrast to previous years, when Chafee's failed proposals for expanded sales taxes and higher taxes on restaurant meals angered many in the business community.
White said proposals to spend more on education and workforce development seem promising, as does Chafee's call to reduce the corporate tax rate.
"We wanted to see a plan for economic growth," she said. "So we certainly like the idea at first blush."
Chafee's budget proposal would not reverse many of the steep cuts approved by lawmakers in leaner years, including a $15 million reduction in funds for the developmentally disabled.
Linda Teoli's 54-year-old brother Jeff has a developmental disability and has fewer services available to him following the cuts. She came to the Statehouse to urge lawmakers to restore the money.
"These cuts were devastating," she said. "They're not doing enough to help these people."
In his third state-of-the-state address, Chafee touched on the debacle surrounding the state's $75 million loan guarantee to former Red Sox pitcher Curt Schilling's video game company 38 Studios, which has filed for bankruptcy. Chafee opposed the investment as a candidate and said it's an example of the kind of poor leadership Rhode Island can no longer afford.
"We tried the 'get rich quick' approach by giving $75 million to a retired baseball player with zero business experience," he said. "We cannot make such panic driven decisions again."
Chafee also cited last month's massacre of 20 children and six educators in Newtown, Conn. and vowed to work with lawmakers to craft legislation to prevent gun violence.
In restating his support for gay marriage, Chafee said lawmakers had a chance to pass "historic" legislation that would bring Rhode Island into line with the five other New England states, all of which allow gay and lesbian couples to marry.
"For our economic development, for civil rights, and for basic fairness, we must extend the rights and benefits of marriage to all Rhode Islanders," he said.
But the speech's primary focus was on the economy, and Chafee credited his own administration for much of the state's recent strides, but acknowledged a slowly recovering economy plays a significant role.
The state expects to have $79 million in surplus funds when it ends the current fiscal year June 30 — marking the second consecutive year of surplus. State revenue estimates are up, and the state's unemployment rate is down — slightly — to 10.4 percent.
While that's still the second highest jobless rate in the nation, Chafee said the trend is a reason for optimism.
"Things are getting better," he said. "And we must build on this momentum to continue our recovery."