- We have a public transportation system that does not work.

We have an education system that does not work.

People cannot afford childcare.

Give me the proposal that tells me where to cut.

- This myth of, like, rising waters.

I have watched people make investments on coastlines, especially in Rhode Island.

There's no way any of these people who are actually making the profits are gonna make an investment on an area that's gonna be underwater in the next 10 years.

It says Baba Yaga they call it as the boogeyman.

(dramatic music) - And welcome into this episode of "Lively."

I'm Jim Hummel.

Joined this week by former Rhode Island Republican Party Chair Joe Powers, and Weayonnoh Nelson-Davies, executive director of the Economic Progress Institute.

The governor's proposed $15 billion budget offers a little something for mostly everyone, but how different will it look when legislative leaders release their own spending plan later this year?

Weayonnoh, I know you're at the state of the state.

You've been waiting for the budget to come out.

I would think the headline for you and your organization is the millionaires' tax.

- Definitely.

- Let's talk about that.

- Yeah, so the governor's proposed budget, #GoodStart, right, from our perspective.

Before I get to the millionaires' tax, there are a couple of things in there that is important to note.

We've been asking state leaders to respond to the crisis that H.R.1 federal bill is bringing.

And the governor, to his credit, addressed that in his budget by saying he's gonna invest about $90 million to make sure we have systems to deal with SNAP and Medicaid cost that are coming our way, to give some folks who will be losing health insurance to pay for it, right?

So he did that with his bill.

He also addressed affordability was a big part of his bill in trying to make everyone happy.

So child tax credit for parents to be able to afford a little bit of their childcare cost, the energy affordability, which is something he addressed.

And then the shocker of the year, millionaires' tax being proposed in the governance budget.

- Were you surprised?

- I was, when, actually not from when the Boston Globe article came out.

I wasn't surprised that legislators and policy makers were going to be looking at a tax on the 1%, a million dollars in 2026.

I was surprised that the governor beat them to the punch and put it in his proposed budget.

- Well, I'll tell you what, first off, $15 billion for the state of Rhode Island, that breaks down to one of the highest tax structures in the entire country per capita.

Even if you go by the actual numbers, 1.13 million people in the state of Rhode Island, it's like 13, $14,000 per person.

60% of this budget is coming from federal dollars, not even from the state.

So if they balk at any given time, where is this money actually gonna go from?

I think it's right, as far as taxes are concerned, where we're gonna get the money interior.

But to focus primarily on one class that, where you're gonna get your money from as far as the millionaires' tax is concerned, I get wanting to take more money from them, but that's going to completely, in my words or in my ideas, completely destroy the American dream of people who own their own businesses and go out and make an investments to actually put out their money to make bigger money to come in to do what we've always done, which is what Rhode Island and the United States was actually built upon.

But then the focus on there, I'm very interested to see how this is gonna work in New York and California.

It hasn't worked in California.

I think the same thing's gonna happen here in Rhode Island.

You already have half of the population taking off and going to the Carolinas or going down to Florida because they're gonna take their money and retire and go away, which is what's happening in California.

I can't see how you would think that it would be different in Rhode Island when it's been happening.

You have a footprint in California and in New York showing how people are just getting up and walking out the door.

- Well, I definitely, obviously disagree with Joe on those points.

First I'll start with this $15 billion budget.

And I think we have to put it into context.

'Cause people hear that it's like, "Oh, my God, what are you all doing in Rhode Island?"

Fiscal policy 101.

We need to have a balanced budget in Rhode Island, right?

So we are not spending more than we are bringing in, right?

So our $15 billion budget is that big.

Why?

Yes, federal government dependency is one of it, but our GDP have also grown.

And so that budget, we have to put into context, why is it so big?

One of the main reasons it's big is because of the epidemic aid that will be going away.

But it's also because our revenue growth have increased since 2019 as well.

So that's one issue.

The other issue, which I think is very important to address and debunk some myth around this millionaires' tax.

Taxes are not punishment for any class of citizens.

They are the price we pay for a functioning democracy, right?

And it's based on ability to pay.

And so we need to look at ability to pay.

It's not punishing the top 1% of millionaires.

Everyone is paying taxes.

And under Rhode Island tax structure, lower income folks are paying a higher percentage of their income, you know, for their, you know, state and local taxes compared to the top 1%.

So asking the top 1% to pay based on ability is not punishment.

And I want to further debunk that bait.

What are we talking about when we talk about taxing the 1%?

How much are we asking people that's gonna drive them away?

We've already debunked the bit that people were going to leave in droves from Massachusetts, let's not go to California, let's start right here in Massachusetts.

They raised more money in revenue.

We didn't have any evidence of millionaires leaving the state.

And Hasbro decided, guess what?

I'm gonna pack up and go to the Massachusetts we're talking about.

So that's one myth that's debunked.

The other myth, how much are we asking for?

And I think it's important to lay out the facts.

So from 2025, I'm just gonna give an example for the top 1%.

We were talking last year taxable income over $625,000.

Do you know how much that we have cost in taxes for getting that 3% surtax?

$150 a year.

That is what we're asking for.

So you're telling me the top 1% will leave because .1% of their income is being asked for them to pay their fair share?

I don't think so.

We are in a crisis right now, and the governor's responding to H.R.1.

It is our duty as every Rhode Islander, including our wealthiest neighbors, to come to the table and say, "How much can I afford to pay to help deal with what's coming our way?"

- So first off, I didn't make an insinuation that the tax was supposed to be a punishment.

I'm glad you made that correlation, which proves that you have the idea that most people have the idea that we need to punish those people who are making more money.

My point being is this, it's how they move away or their money moves away.

What people don't realize when people who make investments and people who are business owners, it's not necessarily that they have to get up and walk out the door, but their money will.

What I mean by that is the entire tax structure is set up to push the idea of people being entrepreneurs and actually making more money.

And when they're making more money, they also give them tax shelters to which they actually have the ability to write off certain amount of money so they never have to get themselves to a point, if you say, "I'm gonna tax you at a million," "Guess what, I made $900,000 last year.

You'll never see that million."

And it'll actually go out the door and I'm gonna make an investment somewhere else.

You talk to anybody, and I don't care, it's not a political thing, it's people who have money and the people who donate the money to all of these politicians who make all of these policies, they're the ones.

Donald Trump said it best when somebody says, "Did you file bankruptcy on there so you can get a billion dollar write off?"

And he said, "You're absolutely right, I did."

And it shocked people.

And the reason why he said it, he says, because everybody else does the exact same thing.

Because that's the law, and that's how they, and the problem that we have is people will call all of these things a loophole.

There's no such thing as a loophole.

It's a law.

You either know them and you use them or you don't know them- - And take advantage of it.

- And you get railroaded.

Yeah, absolutely.

- Let me ask you, and you've seen the study by RIPEC and the Greater Providence Chamber of Commerce who said it's not a revenue problem, it's a spending problem.

- Correct.

- And at one point, and Mike DiBiase, who I think is a pretty conservative guy, has called it a gimmick.

That if you go to the well now, what are we gonna do, if we're not looking at the spending, the $15 billion, and you had said the COVID money.

House Speaker Joe Shekarchi said many times, "We want investments, not spending."

Well, what's happened is the budget's gone up 50% and that's what's locked in every year now.

What happens a year from now?

- Right.

- We have another, you know, we have another 100, 200, $300 million deficit, then where are you gonna go?

You've gone to the well already and you haven't looked at the spending side.

- Right.

- What about that?

- Yeah, so, and Mike is a good friend of mine, and we talk to RIPEC all the time.

Here is the problem I have, we need to look at the data.

Mike talk about spending or RIPEC talk about spending all the time.

What is the proposal to bring down spending?

People keep talking about it, but yet we say we need to invest in education.

We have a public transportation system that does not work.

We have an education system that does not work.

People cannot afford childcare.

Give me the proposal that tells me where to cut.

If that proposal is less cut to our most vulnerable neighbors who are paying their fair share of taxes, then that is just smoking mirrors.

That is not a real solution to the problem.

What the real solution to the problem is, yes, legislator and policymakers should be held responsible, to spend responsibly.

However, they should also be held responsible to invest in Rhode Island so that people can want to come here.

And we need to raise revenue.

We have to be sustainable, whether people liked it or not.

And then the other myth I will address, one, the myth that people will leave.

That is not true.

The data does not support that in any report you actually look at outside of politic.

- What about becoming residents of other states?

- But here's the thing- - And they're spending just under six months here.

- Yeah, but here's the problem, if that was true, Massachusetts, where did they raise that extra $2 billion in revenue?

The fact is maybe some of the money will go up to the state, but revenue is being raised even with the estate tax in Rhode Island.

People talk about that all the time.

And that was the other thing, people are gonna leave and are gonna sell their homes.

However, if you look at the numbers since FY25, we raised $50 million.

FY26, FY27, we're raising close to $100 million.

So the money is still coming into Rhode Island.

- Where would you cut?

- Well, first off, I have to agree on a lot of things that you said, Jim.

It does come down to the spending side of stuff.

We're letting the loonies run the bin at this given moment in time.

The people are spending money frivolously.

And you are right.

It's when people go to New Hampshire and they actually take up residents in New Hampshire and they go to Florida and they go to the Carolinas, do the same thing, and they're gonna move their money all over the place.

The money is not going to be generated simply by tax.

You can't keep taxing people into getting more money.

You have to control the spending.

And if you're not gonna get the money from these revenue sources, which by the way, the government's not in charge of creating revenue.

Their taxes are there to take care of the state.

We're living in a state right now where the can has been kicked down the road for so long that we're living in an infrastructure problem.

I'm not even talking about the Washington Bridge.

I'm talking about, it's just the highways and everything.

Where is that money gonna come from?

The other problem that they have with this is them trying to hold to show their independence in the state of Rhode Island, where they're gonna sit there and go against everything federal.

Donald Trump has already said he's not going to be supporting people, supporting states and giving them federal money if they're not gonna be following federal law.

60% of this budget is coming from there.

So let's say 30%, let's say 50% of that goes away.

Where does the state get the money from?

Everything that they're promising people.

And it doesn't come down to the, it all comes down to, I should say, to the people who are on benefits.

When people who are on benefits, I think the ones who truly deserve to be on benefits.

And I will tell you that my family is a direct result of that.

My grandmother, who was a single mom with six kids, was on government aid for the entire time.

But that's when it was actually true government aid.

You have able-bodied citizens out there who sit at home and do absolutely nothing.

They're not out there working.

They're not doing what they need to do.

They can be working throughout the entire day.

And the cost of living will take a part of what's going on, because yeah, when it comes to daycare, it's very expensive to actually put 'em in.

There's schools and things of that sort.

But there's able body, up to 48,000 of Rhode Islanders that could be working right now that aren't.

And those are the people that they're focusing on.

There are certain people out there who absolutely need the federal aid.

They absolutely need the SNAP benefits.

And they should be getting them because we should be taking care of them.

All we're saying is spend the money wisely and those who can contribute should.

Can you only imagine what Rhode Island could become if everybody played their part?

- Well, we agree on that.

Everyone that should contribute should, and I agree, millionaires in top 1% should contribute more like they were in 2006.

And we're actually gonna be addressing this very soon, stay tuned, to talk about how much revenue we have lost.

And to talk about spending in the budget and not think about, budget is balanced by spending and revenue, any budget, including our household budget.

So it doesn't make sense for- - Yeah, but they've said that the revenues are outpacing the, or are not keeping up with the spending.

The issue I have with the legislature is, the governor the last two years, and you pay attention to this a lot more than I do and you're up there a lot more than I am.

The governor proposed budgets that two years ago, the legislature took it and added a quarter of a billion dollars.

Now, that's baked in last year.

Baked in now.

Last year they added more than 100 million.

What about putting that in a rainy day fund?

I know the Speaker will say, "We did fund the rainy day fund."

So when the government cuts off SNAP in November, we have 100, 200 million, which you're saying, the train's coming down the track next month, the next couple of months on these federal benefits.

And even if we, if Rhode Island prevails in court, fine, but if we don't, where's that cushion?

We don't have two nickels to rub together.

We have hospitals that are potentially going under.

- I agree.

I agree.

- And so instead of adding to the spending, why not take that money and put it in a rainy day fund?

- And we agree, and we've been calling for a rainy day fund.

But again, we have to put things into context.

My budget as a college student, as a law student, even as a baby attorney, was way less than my income and spending right now as an adult.

So what are we talking about?

We're talking about a 3.6% increase in spending.

So people are, again, throwing all these smoking mirrors and not putting it into context.

Why does my income increase?

'Cause now I have a mortgage and I have two humans.

Why are we spending?

We are spending because we have underinvested in a lot of our infrastructure for years.

You have to spend to get back to the state we need to be, whether people like it or not.

And I still have not heard the proposal where to cut.

And if it's talking about people are pretending to be on welfare and not deserve to be, that is not where the issue is.

- Do you favor an inspector general?

Do you think we have a little bit of fraud and misspending in Rhode Island?

- Perhaps we do.

We need to look at it more.

Whether it's an inspector general or accountability system where voters can think about and know what is happening.

I think we should think about that.

- Let's talk about a couple of other things just before we end this segment.

Is that we talked a little bit about the hospitals.

I'm not sure where that, I could do a whole show on that.

Gas tax roll back.

It seems like, you know what's gonna happen is, the legislature's gonna, 'cause if he rolls back the gas tax that went up two cents, the legislature, if they go along with that, they're gonna have to find the money somewhere else.

I think that's gonna, the gut's gonna get put in, don't you think?

- Oh, absolutely.

- Legislature at the end of the day is gonna go two cents, gas is down, what do we care?

- It's a straight up folly to think that the governor has the amount of power that he has when, you know, legislature's- - He has no power.

- Zero.

And that's the same thing as even if you put in a Republican candidate who can win and take over the governorship, it's not really gonna do much because the most powerful spot in the entire state of Rhode Island is the Speaker of the House because they're the ones that pull all the levers.

And, yeah, there is corruption inside this, and inspector general is absolutely needed.

They tell you right to your face all the things that they're going to be doing.

I'll just use Sheldon Whitehouse, as a matter of fact, when he talked about, when he was trying to pull the levers on the federal government.

And he said, straight up he says, "Try getting these bill to come past me, and when you need me in order to pass these things on."

So I'm sorry, is that not a quid pro quo when you're talking about these things?

And I'm not saying that people are faking whether or not they need to be on SNAP benefits, but there are people out there who absolutely can be working and contributing even in the smallest ways wherewith the government doesn't have to be paying all of their benefits where they're not even contributing to all of them.

Those are the ones, I promise you, you get any one of those people who can even hit the bottom margin of the poverty level at $32,000 per year, that amount of taxable income in the state of Rhode Island can do compounds amount.

You could take our 40% of what we're gonna produce and jump that thing up to 65.

You just found yourself your buffer not to have to rely on the federal government when the federal government shuts off the tap on you.

- Yeah.

- Because it's gonna happen.

- And most of our budget is not for those who are on public benefits.

Again, we have to put things into context.

- Education, healthcare- - Yes.

- A lot of the federal- - Exactly.

So people always, again, go, anytime we talk about budgets, that's what happened with H.R.1.

We are all claiming H.R.1 is bad, but we're still having the same narrative in Rhode Island.

H.R.1 was, like, let's go after people with Medicaid and SNAP.

- You refuse to call it the One Big Beautiful Bill, don't you?

- It's a so called, it's not beautiful at all.

- It's a gorgeous.

- And we are feeling it.

- There you go.

- Right now in Rhode Island, so we know.

- There'll be no agreement on this panel about that.

- That's right.

- How do you account for the fact that budget's up 50%?

Your budget's not up 50% in your household.

- Yeah.

- Since 2019.

- Yeah, exactly.

But, again, we have to, why is it up 50%?

Most of that money after 2019 was all this pandemic aid.

We have about two- - But that's gone.

- No, not yet.

We have 200 million this year.

- Right, but if- - It's going to go.

- Right, but if- - And that's the issue.

- You take that theory that the pandemic aid was going to get flushed out, the budget would've gone back to 10 or 11 million where it was.

Instead we're three billion more, and we gotta find revenue somewhere to find it.

- Well, exactly, but not only find revenue, the other thing we need to talk about and we keep talking about spending cuts and we go there, the federal government goes there, Congress go cuts, and then they give the money in cuts to the wealthy.

So we all know our budget is being balanced in ways that does not make sense.

In Rhode Island, even with the governor's budget, and I do #GoodStart, he's talking about raising revenue but then also talking about cutting revenue with Social Security taxes and estate taxes.

What we did last year and the last few years was to cut the car tax.

We lost over $200 million in revenue.

So why can't we talk about the revenue loss policies we're implementing as well and not just focus on spending costs?

- All right, we got a whole, well, last point.

- I just wanna say one thing.

Welcome to the Republican party, because everything you're saying is that the last 80 years- - I am a non-partisan.

- The last 80 years, I can prove it to you.

And I truly believe most Rhode Islanders are Republican.

They're just afraid to say it.

They'd rather go with the pain they know than the pain that they don't know.

And they think that there's gonna be pain on the other side.

'Cause the Democrats have done a great job.

Ladies and gentlemen, 80 years of Democratic rule in the state of Rhode Island has put us in this position.

Period.

End of conversation.

You can't go any further than that.

This is not a budget.

Please stop saying, "When you balance the budget."

They're not balancing anything.

If I ran my household the way the Rhode Island or the way the Rhode Island legislation spends the money and has money coming in, I would have lost my house 10 times over, and they need to lose the house.

- All right, we will hold it there.

To be continued.

I have a feeling this conversation's gonna continue afterwards.

We'll try to tape that.

- For sure.

- Out in the hall.

All right.

One of the more contentious issues this year will be the governor's proposal to roll back some climate change programs that add cost to the energy bills we as Rhode Islanders receive every month.

Joe, I think the, a lot of people look at their bills.

Well, energy in the northeast is high to begin with, but now there's a discussion.

I think there's gonna be a real clash between the governor maybe looking for some financial relief and some of the climate change proponents who say, "No, no, no, we don't want to go backwards.

We want to go forwards."

- So if I may go, my 12-year-old self inside is screaming this right now is, I told you so.

Back in '22 I ran for Senate in the state of Rhode Island.

And one of them that I ran against was when they came out with the climate bill in 2021- - Act on Climate, - Act on Climate of 2021.

It's very unsustainable.

Those of us who actually have ideas about infrastructure, again, you know, being able to run the state properly is we knew that there was no way that that's something could be put in place.

Do we think that there's an opportunity where we can be using sustainable wind, sustainable energy, and things of that sort?

Yeah, it's called nuclear.

And nuclear power is the only thing that can actually be sustainable and actually have the lower cost.

Everything that they're doing and all of the climate change.

Every 10 years we're being told that the earth is going to explode because climate is doing this and climate is doing that.

You can go back and there's videos on this from Al Gore talking about it back in the day.

And he's made a very healthy and wealthy career over telling people that everything is changing and everything is blowing up.

What we have in Rhode Island and across the United States is a very big dependency on petroleum.

And it's not going to change anytime soon.

No matter any amount of legislation you're gonna put towards it is going to change facts.

And the facts are we run off of petroleum.

And when we run off of petroleum, that's how things are gonna get done.

Sustainable wind, sustainable energy is not gonna be the way of the future 'cause we can't control it in the state of Rhode Island, 'cause we don't have the proper infrastructure.

- No shocker I disagree.

(laughs) And a couple of things.

One, we are the ocean state, right?

Climate change is happening, and we can tell by the differences in our weather.

Rising sea levels is something we have to consider.

We have people in Washington Park right now dealing with economic justice issues where the asthma rate is higher than the national average.

We have environmental issues that are going up.

We are close to 2033 where we were supposed to meet our climate goals.

The governor's proposal is sending that to 2050.

I agree with the affordability of utility bill.

I look at my utility bill, especially coming here, and it's triple what I've ever seen.

And I actually brought an example of utility bill, 'cause, again, I hear facts all the time, but I like to look at the numbers.

Where is the cost really coming from?

Is the cost coming from our climate change proposals, or is it coming from somewhere else?

So I have a real example of a utility bill here.

- She brought receipts, literally.

- I brought receipts, because that's what I do, right?

I do research and data.

- Well, they're not paid, so they're not receipts.

(all laughing) - This is an actual- - Not yet.

- This is an actual Rhode Island energy bill, which is like $800.

$402 is from delivery charges.

What makes up the delivery charges?

75% of delivery charges are from distribution energy charge and transmission charge.

That's like $171 of that 400, and $132.

What is included in that distribution and transmission charge?

Shareholder profits, return on investment.

75% of what is making utility unaffordable for Rhode Islanders is in these two charges.

25% is going to the renewable energy climate proposal that was put through.

And 79% is going to help low-income families.

So I don't want anyone to say it it's because we're helping low-income families.

That's why our energy bill is high.

It's high because 75% is going towards profits.

So if we're gonna think about affordability, why are we not starting with where all this profits is going to and put a cap instead of taking us back on a long-term- - Because think that's been litigated in other states and they have said, "You have the right to have X number of profits."

I understand the argument, but Greg Cornett from Rhode Island Energy has said as much that it is a lot.

Look, you either agree or you disagree, but the climate change additives, I will say, have added to the bill.

So if you wanna trim, there's only so much you can do.

- You can, and I still have yet to see this, and I'll go back to terminology used earlier, is this myth of, like, rising waters.

In the world of investments where I actually come from, I have watched people make investments on coastlines, especially in Rhode Island.

All around on the East Coast.

They look out 20, 30, 40-year perspectives when they actually put out their money.

There's no way any of these people who are actually making the profits as what we're referring to, are gonna make an investment on an area that's gonna be underwater in the next 10 years.

It's always that proverbial 10 years.

It's coming down the road.

It says Baba Yaga they call it as the boogeyman.

That's coming down the road.

- Do you not believe in climate change though.

- So the climate- - The rising tides- - So I don't- - And the storms all across the country.

- What I don't agree with is the definition that people give to climate change.

Climate's always going to change.

It has been changing for billions and billions of years.

And you go through all sorts of rises- - Let's go to the old term, global warming.

- Right.

- Well, global warming is something that's completely different.

And yeah, there was an opportunity at that point like with all the women in the eighties with the Aqua Net spraying and that and destroying the ozone.

Ozone hasn't been talked about in 25, 30 years at this point.

Is it because people aren't using certain hairsprays anymore?

- Do you use spray deodorant?

- Do I, no, I don't use spray deodorant.

- So you're contributing?

- I don't use any deodorant.

- You're helping.

- This is all natural.

- All right.

- That I have, and she's already complimented me.

My point is this is, when it comes to health concerns, there's a lot more that goes into health concerns nowadays than just climate.

Kids who have asthma, kids who have ADD, kids who have autism.

I could run through a litmus of things of information that comes from the medical side of things that could be causing conditions that have to come with, with VOCs when it comes to things where people are using inside their homes.

When it comes to carpets, when it comes to adhesives, when it comes to kids not spending time outside.

Them being outside is gonna be far healthier for them than spending time inside, but yet we gear it so that people stay inside.

So I have yet to see a lineage of any kind where somebody's gonna say in Washington Park where I grew up that your asthma rates are gonna be going up simply because of climate change.

Nobody could ever make that correlation.

- I disagree.

I think people have made a coalition, right?

People have made a coalition between air pollution, climate change, and how it impacts our health.

- Those are two different things though.

Climate change and air pollution.

- No, I agree, so, 'cause we're talking about this for utility bill, but I'm talking about in general about environmental issues, right?

And that's part of it.

And people have dismissed those environmental justice issues as well.

And here's my thing, when it comes to investment and it comes to preparing for our future, we make choices, right?

And one of the choices we've made as a state and policy makers is let's prepare ourself for those.

You know, some people believe in God and some people do not.

We're making the choice to say some people don't believe in climate change, but let's be prepare if it's gonna happen, even for those who do not prepare, Rhode Island is ahead of the game.

But there are other ways to address the utility bill affordability other than that.

- So the science and the argument aside, just 30 seconds left, politically, does this make it through the General Assembly, and ultimately when the budget comes out to be able to roll back some of that to give energy relief.

Do you think that politically it's gonna work or not?

- Well, politically it's gonna go through no matter what.

Whether it's gonna work for Rhode Islanders, there's no evidence for that.

- But do you think politically it's gonna make it through?

- I don't think so, because I think people will look at, we're seven years away from this goal and we're pushing this 17 years.

It doesn't make sense for the investment we've already made.

- All right, so we're having you back at the end of the session, and we're gonna do a little scorecard to see exactly.

- That will be fun.

- Weayonnoh and Joe, thank you so much, and thank you for joining us.

Be sure and check us out on Facebook, X, Instagram, and on the Ocean State Media YouTube channel.

We'll see you next time here on "Lively."

- [Narrator] Lively is generously supported in part by John Hazen White's "Lookout."