Paolino Gets It Right

We probably disagree more frequently than we agree when it comes to economic development policy, but he’s right on here, from the Projo:

I strongly believe that the public sector should encourage the continued expansion of our colleges and hospitals. The state and local governments benefit handsomely from the presence of colleges and hospitals in Rhode Island. These institutions have a combined payroll exceeding $3 billion, and their 85,000 employees pay income, sales and property taxes. Brown University alone withholds more than $10 million a year in state income taxes on behalf of its employees.

I also believe that the state should share with the cities and towns more of the tax revenue that institutional expansion generates for the state. Here is an approach that I believe has merit: As nonprofit colleges and hospitals increase their payrolls, generating new income-tax revenue from employees, the state would share the incremental revenue with the host community, perhaps on a 50/50 basis. This would encourage host communities to form partnerships with colleges and hospitals instead of obstructing them. 

I’ve been planning on introducing legislation to this effect this session.

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