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RI Gov Calls For Lower Biz Taxes In State-of-state

By DAVID KLEPPER

PROVIDENCE, R.I. (AP) â¿¿ Insisting that Rhode Island is on the rebound, Gov. Lincoln Chafee on Wednesday urged lawmakers to cut corporate taxes and boost education spending to encourage the state's fledgling recovery.

In an upbeat state-of-the-state address, the independent governor said rising revenues and receding deficits show the state economy is inching its way out of its deep doldrums. He used the speech to outline his $8.2 billion budget proposal, which comes without any increases in taxes or fees and no deep spending cuts.

"Two years ago, when I was sworn in as governor, Rhode Island was facing a $295 million deficit, our unemployment rate was 11.4 percent ... many cities and towns were on the verge of collapse," said Chafee, appearing relaxed and loose in the House chambers. "Our state workforce was demoralized. A gloomy cloud of negativity gathered over our state. It takes time for the sun to break through, but it is."

Chafee's proposal would lower the corporate income tax rate over three years from 9 percent to 7 percent. Currently, the state's rate is the highest in New England, but Chafee would drop the rate below its five neighbors.

Top lawmakers said they liked the message. House Speaker Gordon Fox and Senate President Teresa Paiva Weed both said they support calls to lower the corporate tax rate, and hailed his call to boost school spending by $30 million. That's in stark contrast to the tepid reception for Chafee's budget proposals in 2011 and 2012, both of which called for significant new taxes that were not approved by lawmakers.

"It's a very, very good start, probably the best start we've had," said Fox, D-Providence.

Paiva Weed, D-Newport, said that lawmakers may quibble with some of the details in Chafee's proposals, but she praised him for proposing "bold steps" to help the economy.

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