Fung Unveils Plan to Shave $200m in Taxes

Cranston Mayor Allan W. Fung, also a candidate for governor, unveiled a $200 million tax-slashing plan that he said he'd work to implement if elected to the state's chief executive job in November.

The plan would lower the state's sales tax from the current 7 percent to 5.5 percent over the next three years, lowering it beyond Massachusetts and Connecticut.

He also is calling for slashing the corporate tax from 9 to 6.5 percent in the short term and gradually dialing it back to 5 percent by fiscal 2019.

The $500 minimum corporate tax would be lowered to $250 in the first year and gradually to $50.

The estate tax exemption, under his plan, would also be adjusted, increasing from $921,655 to $5.34 million — to match the federal exemption.

The tax reductions would "allow businesses like Phred's to reinvest in Rhode Island," Fung said, referring to the Phred's Drug pharmacy on Oaklawn Avenue in which he made his tax plan announcement.

The drugstore owner, Charles L. Rossi, said he feels like he's paying more than his fair share of taxes and he is tired of paying what he said are taxes cloaked as fees. He noted that he pays $2,000 per year to the state for a "Dumpster fee," which he said is really just a tax for having a Dumpster on his property.

To pay for the tax cuts, Fung said that spending increases would be locked at 2 percent and he would order an across-the-board five percent cut in state personnel.

He would also call for the state to refuse paying any debt on the failed 38 Studios loan debacle. In the end, Fung said the measures would end up resulting in a budget surplus of about $70 million.

Fung touted his track record in Cranston and said he'd use similar methods to find savings, such as renegotiating existing employee contracts and holding the line on spending. In Cranston, which has not seen a tax increase in three years, Fung has managed to reach concessions with many of the town's collective bargaining units. He also has kept staffing fairly tight in City Hall and the city has pioneered the use of grants and alternative sources of income beyond taxes to fund a variety of programs and positions in all departments.