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Guest MINDSETTERS™: Legislation Offers Incentives for Hiring

Thursday, April 17, 2014
James C. Sheehan and K. Joseph Shekarchi, Guest MINDSETTERS™

In keeping with the initiatives of the past two years in the Rhode Island legislature – to make Rhode Island a better place to do business, to eliminate redundant red tape, to focus educational efforts on workforce development – we think it is incumbent on us to find ways to help all kinds and sizes of business. We need to be creative and bold in bringing new and large firms to our state, certainly, but we need to be equally creative and bold in encouraging and nurturing the businesses that are here, so they can grow and prosper. Small and mid-size businesses are the backbone of our state job economy and helping them is imperative for the state’s economic health.

Having the highest unemployment rates in the nation is not a mark of distinction, it is shame and a challenge we must address and resolve. Being ranked as one of the least business-friendly states in the nation is another black eye that needs to be treated and cured.

Tax incentives as an inducement to businesses to locate or expand here can be an effective tool as we try to fix our business image and put people back to work. One only needs to look to nearby New York State, which has established 10-year tax free zones to try to draw businesses to the Empire State.

State Senator James C. Sheehan
To encourage business growth, and to try to reduce our unemployment rate, we have introduced legislation in the Senate that could be an enormous job creator in Rhode Island. The “Rhode Island New Qualified Jobs Incentive Act” would make tax incentives available to companies that hire new “qualified” full-time employees who work a minimum of 30 hours per week, with a salary that is at least 250 percent of the state’s hourly minimum wage.

Under the legislation, large companies would be eligible for a .25 percent tax incentive off their net income tax for every 50 new hires while smaller companies, which are typically partnerships or family businesses, would receive a .25 percent incentive off their personal income tax for every 10 new hires, provided that the rate reduction is no larger than 6 percent for the applicable business income tax rate and no larger than 3 percent for the applicable personal income tax rate. Those are savings that these companies can re-invest in themselves to help them grow even more.

And because accountability and transparency are important in relation to any tax incentives provided by the state, the legislation includes requirements for companies to provide annual employment reports to the Division of Taxation and for the Division of Taxation to provide annual reports to the General Assembly.

Representative K. Joseph Shekarchi
An important aspect of the legislation is that it ties the incentive to “qualified” jobs. This will help guarantee that Rhode Island businesses that benefit from hiring are putting Rhode Islanders to work in good-paying, sustainable jobs, not just minimum wage positions. The intent of offering an incentive is to see the creation of the kinds of jobs that are good for the worker but that also will enhance the companies and help them continue to grow and be productive.

We realize that proposing a tax reduction of any kind results in less revenue coming into the state, but we think we need to weigh the potential good that would come from an action such as this. We remember an old saying about business – sometimes you have to spend money to make money. Finding a way to provide a boost for businesses through a tax incentive will be good for those companies, good for Rhode Islanders seeking jobs and will have long-term benefits for the state.

James C. Sheehan is the Democratic State Senator from District 36, Narragansett and North Kingstown, and the Chair of the Senate Committee on Government Oversight. K. Joseph Shekarchi is the Democratic State Representative from District 23, Warwick, and Chair of the House Committee on Labor

  • #39 Narragansett

    Latest Unemployment Rate: 6.0

    Labor Force: 9,244

    Employed: 8,688

    Highest Rate in Last Two Years: 9.0 (January 2012)

    Lowest Rate in Last Two Years: 5.6 (September 2012, June 2013)

     
  • #37 (Tie) Jamestown

    Latest Unemployment Rate: 6.5

    Labor Force: 3,014

    Employed: 2,818

    Highest Rate in Last Two Years: 9.5 (February 2012)

    Lowest Rate in Last Two Years: 5.7 (June 2013)

     
  • #37 (Tie) New Shoreham

    Latest Unemployment Rate: 6.5

    Labor Force: 1,507

    Employed: 1,409

    Highest Rate in Last Two Years: 30.9 (February 2012)

    Lowest Rate in Last Two Years: 5.0 (August 2011)

     
  • #36 Barrington

    Latest Unemployment Rate: 6.8

    Labor Force: 8,211

    Employed: 7,651

    Highest Rate in Last Two Years: 8.8 (August 2011)

    Lowest Rate in Last Two Years: 6.4 (April, May, July 2013)

     
  • #35 Richmond

    Latest Unemployment Rate: 6.9

    Labor Force: 4,316

    Employed: 4,018

    Highest Rate in Last Two Years: 8.5 (February 2012)

    Lowest Rate in Last Two Years: 5.2 (May 2013)

     
  • #34 Glocester

    Latest Unemployment Rate: 7.2

    Labor Force: 5,893

    Employed: 5,470

    Highest Rate in Last Two Years: 10.7 (February 2012)

    Lowest Rate in Last Two Years: 6.4 (June 2013)

     
  • #33 North Kingstown

    Latest Unemployment Rate: 7.3

    Labor Force: 15,033

    Employed: 13,939

    Highest Rate in Last Two Years: 10.5 (January, February 2012)

    Lowest Rate in Last Two Years: 6.6 (June 2013)

     
  • #32 Little Compton

    Latest Unemployment Rate: 7.4

    Labor Force: 1,904

    Employed: 1,763

    Highest Rate in Last Two Years: 12.4 (January 2012)

    Lowest Rate in Last Two Years: 6.9 (April 2013)

     
  • #31 Middletown

    Latest Unemployment Rate: 7.5

    Labor Force: 7,917

    Employed: 7,325

    Highest Rate in Last Two Years: 13.5 (January 2012)

    Lowest Rate in Last Two Years: 7.1 (June 2013)

     
  • #30 Portsmouth

    Latest Unemployment Rate: 7.6

    Labor Force: 9,362

    Employed: 8,651

    Highest Rate in Last Two Years: 11.5 (January 2012)

    Lowest Rate in Last Two Years: 6.6 (June 2013)

     
  • #28 (Tie) Bristol

    Latest Unemployment Rate: 8.0

    Labor Force: 12,455

    Employed: 11,457

    Highest Rate in Last Two Years: 10.6 (January 2012)

    Lowest Rate in Last Two Years: 6.6 (June 2013)

     
  • #28 (Tie) Westerly

    Latest Unemployment Rate: 8.0

    Labor Force: 11,917

    Employed: 10,961

    Highest Rate in Last Two Years: 11.2 (February 2012)

    Lowest Rate in Last Two Years: 6.8 (September 2012)

     
  • #27 Smithfield

    Latest Unemployment Rate: 8.3

    Labor Force: 11,781

    Employed: 10,799

    Highest Rate in Last Two Years: 10.4 (August 2011, February 2012)

    Lowest Rate in Last Two Years: 5.7 (June 2013)

     
  • #25 (Tie) Foster

    Latest Unemployment Rate: 8.4

    Labor Force: 2,701

    Employed: 2,475

    Highest Rate in Last Two Years: 13.4 (February 2012)

    Lowest Rate in Last Two Years: 7.9 (June 2012)

     
  • #25 (Tie) N. Smithfield

    Latest Unemployment Rate: 8.4

    Labor Force: 3,014

    Employed: 2,818

    Highest Rate in Last Two Years: 9.8 (August 2012)

    Lowest Rate in Last Two Years: 7.4 (December 2012)

     
  • #23 (Tie) Coventry

    Latest Unemployment Rate: 8.6

    Labor Force: 20,279

    Employed: 18,537

    Highest Rate in Last Two Years: 11.1 (August 2011, February 2012)

    Lowest Rate in Last Two Years: 7.1 (June 2013)

     
  • #23 (Tie) Cumberland

    Latest Unemployment Rate: 8.6

    Labor Force: 19,055

    Employed: 17,422

    Highest Rate in Last Two Years: 10.4 (August 2011, July 2012)

    Lowest Rate in Last Two Years: 7.4 (June 2013)

     
  • #20 (Tie) Newport

    Latest Unemployment Rate: 8.7

    Labor Force: 12,885

    Employed: 11,763

    Highest Rate in Last Two Years: 14.1 (January 2012)

    Lowest Rate in Last Two Years: 7.2 (September 2012)

     
  • #20 (Tie) Warwick

    Latest Unemployment Rate: 8.7

    Labor Force: 46,308

    Employed: 42,297

    Highest Rate in Last Two Years: 9.5 (February 2012)

    Lowest Rate in Last Two Years: 10.4 (August 2011)

     
  • #20 (Tie) West Greenwich

    Latest Unemployment Rate: 8.7

    Labor Force: 3,678

    Employed: 3,359

    Highest Rate in Last Two Years: 11.7 (February 2012)

    Lowest Rate in Last Two Years: 6.6 (June 2013)

     
  • #19 East Greenwich

    Latest Unemployment Rate: 8.9

    Labor Force: 6,784

    Employed: 6,178

    Highest Rate in Last Two Years: 11.0 (February 2012)

    Lowest Rate in Last Two Years: 7.5 (June 2013)

     
  • #15 (Tie) Charlestown

    Latest Unemployment Rate: 9.0

    Labor Force: 4,506

    Employed: 4,099

    Highest Rate in Last Two Years: 14.2 (January 2012)

    Lowest Rate in Last Two Years: 7.1 (June 2013)

     
  • #15 (Tie) Lincoln

    Latest Unemployment Rate: 9.0

    Labor Force: 11,781

    Employed: 10,717

    Highest Rate in Last Two Years: 10.4 (February 2012)

    Lowest Rate in Last Two Years: 7.9 (November 2012, June 2013)

     
  • #15 (Tie) South Kingstown

    Latest Unemployment Rate: 9.0

    Labor Force: 16,455

    Employed: 14,982

    Highest Rate in Last Two Years: 10.6 (January 2012)

    Lowest Rate in Last Two Years: 7.8 (September 2012)

     
  • #15 (Tie) Warren

    Latest Unemployment Rate: 9.0

    Labor Force: 5,908

    Employed: 5,377

    Highest Rate in Last Two Years: 12.0 (February 2012)

    Lowest Rate in Last Two Years: 7.6 (June 2013)

     
  • #14 Exeter

    Latest Unemployment Rate: 9.2

    Labor Force: 3,865

    Employed: 3,509

    Highest Rate in Last Two Years: 11.7 (March 2012)

    Lowest Rate in Last Two Years: 7.6 (September 2011)

     
  • #13 Tiverton

    Latest Unemployment Rate: 9.3

    Labor Force: 8,882

    Employed: 8,058

    Highest Rate in Last Two Years: 12.0 (January, February 2012)

    Lowest Rate in Last Two Years: 7.4 (June 2013)

     
  • #10 (Tie) Cranston

    Latest Unemployment Rate: 9.5

    Labor Force: 41,657

    Employed: 37,682

    Highest Rate in Last Two Years: 11.3 (July 2012)

    Lowest Rate in Last Two Years: 8.8 (April 2013)

     
  • #10 (Tie) East Providence

    Latest Unemployment Rate: 9.5

    Labor Force: 24,677

    Employed: 22,339

    Highest Rate in Last Two Years: 12.6 (January, February 2012)

    Lowest Rate in Last Two Years: 8.7 (June 2013)

     
  • #10 (Tie) West Warwick

    Latest Unemployment Rate: 9.5

    Labor Force: 16,240

    Employed: 14,693

    Highest Rate in Last Two Years: 12.9 (February 2012)

    Lowest Rate in Last Two Years: 8.4 (June 2013)

     
  • #8 (Tie) Hopkinton

    Latest Unemployment Rate: 9.8

    Labor Force: 4,888

    Employed: 4,411

    Highest Rate in Last Two Years: 11.2 (February 2012)

    Lowest Rate in Last Two Years: 6.6 (June 2012)

     
  • #8 (Tie) North Providence

    Latest Unemployment Rate: 9.8

    Labor Force: 18,130

    Employed: 16,347

    Highest Rate in Last Two Years: 11.3 (August 2011)

    Lowest Rate in Last Two Years: 8.5 (April 2013)

     
  • #7 Burrillville

    Latest Unemployment Rate: 10.0

    Labor Force: 9,526

    Employed: 8,570

    Highest Rate in Last Two Years: 11.6 (February 2012)

    Lowest Rate in Last Two Years: 8.0 (June 2013)

     
  • #6 Scituate

    Latest Unemployment Rate: 10.4

    Labor Force: 6,166

    Employed: 5,527

    Highest Rate in Last Two Years: 11.2 (July 2012)

    Lowest Rate in Last Two Years: 8.4 (June 2013)

     
  • #5 Johnston

    Latest Unemployment Rate: 10.5

    Labor Force: 15,645

    Employed: 14,004

    Highest Rate in Last Two Years: 12.9 (February 2012)

    Lowest Rate in Last Two Years: 9.2 (June 2013)

     
  • #4 Pawtucket

    Latest Unemployment Rate: 11.1

    Labor Force: 36,412

    Employed: 32,378

    Highest Rate in Last Two Years: 13.7 (July 2012)

    Lowest Rate in Last Two Years: 10.2 (June 2013)

     
  • #3 Woonsocket

    Latest Unemployment Rate: 11.2

    Labor Force: 20,730

    Employed: 18,409

    Highest Rate in Last Two Years: 13.6 (January 2012)

    Lowest Rate in Last Two Years: 10.7 (June 2013)

     
  • #2 Providence

    Latest Unemployment Rate: 11.5

    Labor Force: 80,605

    Employed: 71,362

    Highest Rate in Last Two Years: 14.3 (August 2011)

    Lowest Rate in Last Two Years: 10.4 (May 2013)