Tag Archives for Senator Lou DiPalma

The RI Budget proposal, as seen by our fastest growing demographic, Seniors

Published in RINewsToday on January 22, 2024

This Tuesday, Jan. 16th, Governor Dan McKee officially kicked off the legislative debate on the state’s $13.68 billion FY 2025 Budget in his 48 minute (4,481 word) State of the State address that laid out his spending priorities.  

Over the next six months the General Assembly will hold hearings on the proposed budget blueprint, rewriting it considering state revenues identified during the May Revenue and Caseload Estimating Conferences, and priorities of the legislature.

With passage by the House and Senate and signed into law by McKee, the final FY 2025 Budget will take effect July 1. 

Governor McKee’s budget proposal, which came 2 days after the State of the State, makes funding investments in education, small business, and Rhode Island’s health care system without raising any broad-based taxes. FY 2025 Budget specifics can be found in an article published by RINewsToday on Friday, Jan. 19th – HERE.

With the official release of McKee’s 2025 budget proposal on Thursday afternoon, Jan. 18, his statement along with comments from the top House and Senate legislative leaders were quickly issued.

“The Team Rhode Island budget that I’m sending to the General Assembly today prioritizes programs and initiatives that will help raise the incomes of our fellow Rhode Islanders,” said McKee. 

“By using available resources in targeted and strategic manner, we will continue to make progress on our RI 2030 goals while putting Rhode Islanders to work in good-paying jobs on projects that will pay dividends for decades to come,” he adds.

Legislative leadership

“Over the next several months, Chairman Lou DiPalma and the Senate Finance Committee will conduct a rigorous review of all aspects of the proposed budget through their public hearing process. At this early stage, I am pleased that the budget proposal reflects some of the Senate’s top priorities, including moving our state towards universal public pre-kindergarten, increasing funding for multi-language learners, increasing access to no-cost meals for students, fully funding recommended reimbursement levels for Early Intervention and increasing Medicaid rates,” says President of the Senate Dominick J. Ruggerio.  

“Now that Governor McKee has submitted the budget, our robust review process will begin. Chairman Marvin Abney and the House Finance Committee will soon commence the public hearing process and we look forward to working collaboratively with the Senate and Governor McKee over the next several months. With the federal pandemic funds having been allocated, we must live within our means and carefully scrutinize all spending requests,” says House Speaker K. Joseph Shekarchi.  “The Senate will continue working with all partners and stakeholders to adopt a budget that meets the needs of all Rhode Islanders.” adds the Senate President.

 Aging Groups and Advocates share thoughts

“It was good to see attention to older adults’ financial security by the proposal to increase the amount of pension income that can be exempted from state income taxes which would bring an estimated $500 benefit to about 10,000 persons,” says Maureen Maigret, The Senior Agenda Coalition’s policy advisor and former Director of the RI Department of Elderly Affairs.

“The Governor is looking for ways to increase Rhode Islanders’ incomes and the Senior Agenda Coalition has been working with several partners on a legislative proposal that would save $2,000 a year for many thousands of lower-income older persons and persons on disabilities on Medicare by having the federal government pay the cost of their Part B premiums,” she says, noting that this policy would not only save seniors money they can use for basic living expenses, but would bring millions of dollars into the state economy. It would also make them eligible for a federal program that helps pay for prescription drugs.

“We hope the $10 million in proposed bridge funding for nursing homes will help them to continue to provide necessary services for their vulnerable populations and avoid more closures which are so traumatic for residents,” says Maigret. 

“Although welcome, we had been hoping for more than the modest increase of $200,000 for senior centers as it gets distributed across around 40 senior centers. We know our older population is growing and our senior centers help hundreds of older adults stay healthy and connected to their communities,” adds Maigret.

“With many older adults waiting three months or more to get home care services and the home care worker shortage continuing it is disappointing to see the reimbursement increases recommended by the Social and Human Service Rate Review Study spread out over three years especially when the Executive Office of Health and Human Services had recommended funding the recommended increases over two years. And home care is not only what persons say they prefer but it costs far less to state government than institutional care,” notes Maigret.

“AARP Rhode Island applauds the Governor’s goal of increasing financial security for all Rhode Islanders,” said AARP Rhode Island State Director Catherine Taylor in a statement released days before the release of McKee’s budget blueprint. “Everyone should be able to choose how they live as they age,” she says.

AARP Rhode Island calls on the General Assembly to pass three pieces of legislation that would help to ensure financial security for all. AARP Rhode Island is pushing lawmakers to give all Rhode Islanders access to a retirement savings vehicle. We are pleased that Governor McKee called for the passage of the Secure Choice program, which would provide an optional, voluntary Roth-IRA plan to the 172,000 Rhode Island employees who do not have access to a plan through their employer,” says Taylor.

“The state must stop taxing Social Security benefits,” says Taylor. “We are one of 9 states that still tax these benefits. We encourage legislators to keep more money in the pockets of older Rhode Islanders by eliminating the state tax on Social Security,” she says.

“Lastly, we must reframe how we think about housing as we grow older, and Accessible Dwelling Units (ADUs) are part of the equation,” adds Taylor, urging the General Assembly to pass legislation providing housing options that are suitable for differing incomes, ages, and life stages. “ADUs are one way to accomplish this goal,” she notes.

This budget is an important step forward in helping our industry, says James Nyberg, president, and CEO of LeadingAge Rhode Island, a nonprofit representing providers across the long-term care spectrum from nursing facilities to home and community-based providers. “We appreciate Governor McKee and his staff recognizing our concerns and providing an infusion of funds across multiple settings to support older Rhode Islanders wherever they call home, their families, and our dedicated workforce,” he adds.  This includes the $10 million in stopgap funds to help nursing homes in critical financial distress as they await their permanent rate adjustment effective October 1. 

According to Nyberg, the October adjustment also included in the budget is expected to provide over $60 million in funding to help nursing homes address workforce challenges, the dramatically increased costs of operating their business, and remain financially viable. “We cannot lose any more nursing homes and hopefully this budget will help mitigate that well-documented threat,” he says.  

Similarly, the budget includes the phase-in of rate increases for assisted living residences and adult day providers, per the OHIC recommendations, to support these providers, consumers, workers, and families,” says Nyberg. “We also hope the proposed housing bond will help address the shortage of safe and affordable housing for seniors, the lack of which was highlighted in the Long Term Care Coordinating Council’s recent report entitled “Meeting the Housing Needs of Rhode Island’s Older Adults and Individuals with Chronic Disabilities and Illnesses,”  he adds.

“While there are financial and other challenges that persist, we look forward to working with the Administration and the General Assembly to advance these and any other initiatives to support our long-term care providers, those for whom they care, and their workforce,” says the nonprofit executive director. 

Governor’s budget doesn’t adequately address Seniors’ needs

While aging groups recognize Gov. McKee’s funding provisions that will benefit older Rhode Islanders, one aging advocate calls on the House Finance Committee to beef up funding for seniors in its budget.

“Once again, the senior population of Rhode Island is the fastest growing demographic in the state, and the most neglected,” charges Susan Sweet, former state associate director of the Department of Elderly Affairs and an advocate for seniors facing hardships and low-income difficulties. “The Governor McKee Budget provides no relief for seniors in the proposed 2025 spending plan other than a small gift to nursing homes that may help that senior care industry and a small increase of $200,000 statewide for dividing up among R.I. Senior Centers,” she says.

According to Sweet, seniors receive nothing in the budget other than a proposed tax reduction of “pension and annuity income” to begin in calendar year 2025.  In other words, nothing for this year.  She notes that the current exemption would be raised from $20,000 to $50,000 while the state remains currently only 9 of 50 states that tax Social Security and a minority of states that tax retirement pensions.

“There is also not one cent for retirees who had their pensions frozen in 2011 and have been stripped of their contracted pension benefits of a Cost of Living Adjustment (COLA) each year which they were required to sign and to contribute to from their pay each year of employment,” she says.

“Just down the road in our neighboring state of Massachusetts, there is no state income tax for Social Security or pensions. Their proposed budget includes a new $2,400 per senior payout for housing assistance, rental, or ownership costs,” says Sweet. During the State of the Commonwealth speech just one day after RI Governor McKee touted his Team RI game plan, a representative of the (Massachusetts) Senior Action advocacy group was invited and recognized as a leading voice in enabling seniors to stay in their homes with cash assistance from the state, she noted.

As the founder of the R.I. Minority Elder Task Force which provides financial assistance to poor RI elders in dire circumstances, Sweet regularly sees the neglect of seniors without adequate resources for the basic needs of life. “This is not a senior-friendly state, and this is not a senior friendly budget,” she states. 

Expect aging groups and advocates to gear up to push for their senior legislative priorities in the upcoming months. The budget debate now begins.

To listen to Gov. McKee’s State of the State Address on the FY 2025 Budget, go HERE. 

Details of Gov. McKee’s FY 2025 Budget. Go HERE.

To read Gov. McKee’s FY 2025 budget proposal (H 7225), go HERE.  

Dueling Social Security Proposals Heard by Senate Finance Committee

Published in RINewsToday on March 6, 2023

Almost eight years ago, Rhode Island lawmakers reduced the tax burden on older Rhode Islanders by tweaking the state’s tax on Social Security in the fiscal year 2016 budget. The exemption to Social Security taxation as it currently stands in statute was put in place in 2015, as part of the FY 2016 budget.

According to Greg Pare, Rhode Island’s Senate Director of Communications, the Assembly expanded a budget proposal by then Governor Gina Raimondo to make Social Security benefits exempt from state taxes for many. “The original proposal would have made them exempt for single filers with federal adjusted gross incomes of up to $50,000 and joint filers up to $60,000,” noted Pare, but lawmakers raised the limit to $80,000 for single and $100,000 for joint filers.

During this current legislative session – 2023 – there are two legislative proposals that, if passed, would decrease the state taxes on Social Security income for up to 175,840 retirees.

Helping Social Security retirees

During the current legislative session, Senator Elaine Morgan (R-Dist. 34, Charleston, Exeter, Hopkinton, Richmond, West Greenwich) introduced SB 84 to completely eliminate the state tax on Social Security income in Rhode Island. The bipartisan legislative proposal specifies for tax years beginning on or after January 1, 2024, an individual may subtract from federal adjusted gross income all Social Security income.

Morgan’s SB 84 has attracted the support of GOP Senate colleagues, along with Democratic Senators on the other side of the aisle.  The senior-friendly, bipartisan legislative proposal sponsors are: Sens. Anthony Phillip Deluca (R-Dist. 29, Warwick), Minority Leader Jessica de la Cruz (R-Dist. 23, Burrillville, Glocester, North Smithfield), Gordon Rogers (R-Dist. 21, Coventry, Foster, Scituate, West Greenwich), Thomas Paolino (R-Dist. 17, Lincoln, North Providence, North Smithfield), Leonidas P. Raptakis (D-Dist. 33, Coventry, West Greenwich), John Burke (D-Dist. 9, West Warwick), Mark  McKenny (D-Dist. 30, Warwick), Frank  Lombardi (D-Dist. 26, Cranston) and Frank Ciccone, III (D- Dist. 7, Providence, Johnston).

“Eliminating state income tax on Social Security benefits will be akin to giving Rhode Island retirees a raise. We must make Rhode Island a better place for retirees and not taxing Social Security income is a large step in that direction. It will help stem the flow of retirees leaving Rhode Island and taking their spending power with them.” says Morgan who made an argument in support of the legislation at the Senate Finance Committee last week, when it was scheduled for consideration, and held for further study.  A fiscal note has been requested, but has not been released.

Time to give older Rhode Islanders tax relief

“Eliminating the tax on Social Security benefits at the state level for seniors who have worked for decades, paying taxes on their hard-earned income, and contributing to Social Security with post-tax dollars, would boost the retirement income for much of Rhode Island’s vulnerable elderly population,” reasoned Morgan. “Social Security is part of the social safety net. It was never meant to fill state coffers; it was meant to carry people throughout their retirement years. It’s time to give our growing older population some tax relief by eliminating the income threshold, beginning with the 2024 tax year,” she said, noting that her legislation will help ensure that even more middle-class retirees and their families can keep more of their hard-earned benefits.

Sen. Walter Felag’s (D-Dist. 10, Bristol, Tiverton, Warren) legislative proposal, SB 246, cosponsored by Sens. Lou DiPalma (D-Dist. 12,  Little Compton, Middletown, Newport, Tiverton), Frank Lombardi (D-Dist. 26, Cranston), V. Susan Sosnowski, (D-Dist. 37, South Kingston) and Frank Ciccone, III (D-Dist. 7, Providence, Johnston), was also heard at the Senate Finance Committee, along with Morgan’s Social Security legislation.  This legislative proposal would not eliminate the state’s Social Security tax but increase income thresholds to $110,000 for single, and $140,000 for joint, filers. Like Morgan’s legislative proposal, the Committee recommended that Felag’s measure be held for further study. No fiscal note has been released yet on this legislative proposal.

With the cost of goods and necessary services increasing, Felag says that it was  crucial to help Social Security beneficiaries by throwing SB 248 into the legislative hopper. “By raising the tax exemption level, we can lessen the financial stress that many retirees on Social Security feel on a daily basis, keeping more of their hard-earned money in their pockets and bank accounts,” he says.

Sen. DiPalma, who serves as Chairman of the Senate Finance Committee, reported that a couple of proposals have been submitted and heard in the Senate Finance Committee.  “Both sponsors and witnesses made the case for why we need to continue to assist our seniors, especially during these inflationary and soon to be “slow-cessionary” periods. These proposals must and will be evaluated in the context of the overall budgetary review process, which is currently ongoing,” he says.

When asked if she ever considered becoming a cosponsor of Felag’s legislative proposal, Minority Leader Jessica de la Cruz stated, “I would have loved to, but I was unaware of his bill.”

“It’s not too late to bring Democratic and Republican Senators together to hammer out a compromise legislative proposal,” says de la Cruz, noting she will be discussing this possibility with Senate President Dominick Ruggerio (D-Dist.4, North Providence, Providence). 

Although I do not see eye to eye with my Democratic colleagues 100% of the time, we find common ground on many other issues,” says de la Cruz. ” I believe there would be bipartisan support for crafting a compromise piece of legislation if it ensured tax relief to retirees on Social Security.

Calls for passage of Social Security proposals

AARP State Director Catherine Taylor, representing over 128,000 members in Rhode Island, called for passage of SB 84 and SB 246. “They would protect the Social Security benefits of older Rhode Islanders,” helping them keep the benefits they have earned over a lifetime of hard work,” she said.

“Assuring that our members are financially secure in retirement is a key component of our advocacy,” stated Taylor, noting that Rhode Island is one of only 11 states that still tax hard-earned Social Security benefits. “State taxes on Social Security benefits in Rhode Island undermines the purpose of Social Security, which was designed to lift seniors out of poverty- not to fund state government,” she says.

“Now, when so many Americans are struggling to afford health care and other basic needs, the promise of Social Security is even more important,” adds Taylor.  

“Whether it is raising the income threshold under existing law, or a complete exemption of Social Security benefits from taxation, like 30 other states around the country, AARP supports all efforts to keep hard-earned money in the pockets of older Rhode Islanders,” Taylor told Senate Finance Committee members.

A Call to Action

According to the Healthy Aging 2020 report, Rhode Island’s older population is growing dramatically. Today, more than 240,000 Rhode Island residents are age 60 or older -  that’s 23% of the population. By 2040 that figure is expected to rise to almost 265,000.  In addition, the state has one of the highest proportions of adults aged 85 and older, of any state in the nation, ranking first in New England.

With the expected graying of the Ocean State’s population, now is the time for Rhode Island lawmakers to reduce the financial stress of Rhode Islanders who struggle to pay their bills and want to remain independent at home in the community.   

Although both Social Security legislative proposals have been held for further study, don’t get concerned, says Pare, the Senate’s Communication Director. “It is common to hold bills for further study on a first hearing, and that is almost always the case for bills with a fiscal impact, which would have to be incorporated into the budget bill when it is considered later in the legislative session,” he says. 

“There is an obvious bi-partisan appetite to provide tax relief to our growing aging population who have been greatly impacted during this pandemic. This is a significant opportunity for Senate Finance Chair Lou DiPalma to craft a compromise bill that will advance Rhode Island as an “age-friendly” state, says  Vincent Marzullo, who served 31 years as a career federal civil rights & social justice administrator at the National Service Agency.  Now is the time for both sides of the aisle to come together for a needed public action,” he says.

For details about 9 States With No State Income Tax, go to https://www.aarp.org/money/taxes/info-2020/states-without-an-income-tax.html

For details about 4 States That May Cut Taxes on Social Security Income, go to https://www.aarp.org/retirement/social-security/info-2023/cut-taxes-social-security-benefits.html