PAWTUCKET, R.I. - Democratic Party Chairman Bill Lynch is demanding that Republican Governor Carcieri disclose the names of any "corporate backers'' paying for the radio ad campaign touting his tax-and-spending proposals.
There was no immediate response from the governor's office, but state GOP chairman Giovanni Cicione replied that "people who live in glass houses shouldn't throw stones."
State law prohibits corporate donations to campaign accounts, and limits individual contributions to $1,000 per year. But Carcieri, after closing out his public campaign finance account, is leaning on contributions from undisclosed donors to the non-public TransformRI to finance his radio ad campaign.
In a statement issued Tuesday, the day before House budget writers are set to unveil - and vote - on their version of the new state budget, Lynch called on Carcieri "to act in the interest of public transparency today and release the list of corporate donors who have given untold sums of money to Transform RI - the Carcieri front group that exclusively advocates the governor's pro-big-business agenda.''
Said Lynch: "Rhode Islanders have a right to know which companies are behind or at least aiding the governor's media blitz to cut corporate taxes at the expense of the middle class. By its own admission, Transform RI accepts 'corporate contributions' begging the questions: Who gave what and how much to push this corporate-tax-giveaway?" Lynch asked.
Cicione fired back in a press release by calling on Democrats to disclose their own sources of funding.
"Rhode Island Democrats have a long history of 'pay to play' when it comes to State House access, and they don't like it when the business community stands up for itself," Cicione wrote. "To call on a non-profit to disclose its donors flies in the face of free speech protections that cover such entities. Bill Lynch wants to toss out the First Amendment so that he and his cronies can punish those businesses who would dare stand up to the Democrat machine and actually try to help our state's economy.
"More importantly, when will the unions start disclosing how they spend their members' forced dues? When will ACORN and the Poverty Institute and all of the other Democrat front groups pushing for tax hikes disclose their funding sources? When will they disclose where they're spending their millions?
"And only the Democrats would call giving taxpayers their own money back a 'giveaway,' " continued Cicione. "Bill Lynch says that the governor's tax cuts will raise taxes for others, but he knows as well as we do that tax hikes will only happen if the Democrat- controlled legislature fails to cut spending."
The original version of this post was published at 11:03 a.m.
According to its Web site, TransformRI is registered with the Internal Revenue Service as a 501(c)4, which means it is allowed to lobby and engage in campaign activity. Carcieri is the honorary chairman of the non-public organization, which in recent weeks began airing the ad featuring Carcieri's voice urging Rhode Islanders to contact their legislators in support of the governor's tax-cutting proposals.
Said Lynch: "It's the ultimate end-run around public accountability. The governor is essentially hiding the names of people who are paying to advance his right-wing agenda.
"The financial backers of Transform RI must be brought out of the shadows so Rhode Islanders can have a clear understanding of exactly who is pushing their big-business agenda,'' Lynch said. "It's clear that the governor is putting the interests of his wealthy, corporate buddies before those of so many hard-working Rhode Island families. It's time to shed some light on who is really paying to 'transform Rhode Island,'" Lynch said.
Despite a potential $590 million deficit, Carcieri is proposing a swath of tax cuts, including an expansion of the earned-income tax credit for the poor, a five-year phaseout of the 9-percent corporate income tax and an increase in the estate tax exemption to $1 million.
In his ad, he says his tax package "will create jobs and make Rhode Island the most business friendly state in the Northeast. ... Rhode Island will become competitive with Massachusetts and extremely attractive to new and existing businesses.
"It will also keep more retirees here... With these new tax reforms Rhode Island will have a compelling story to tell, a story that will not only attract and retain businesses but will also keep our seniors from fleeing the state to avoid excessive inheritance taxes. ... Call your state representatives today and tell them we need tax reform now."
But the ad does not mention a key finding of the governor's tax study panel.
To support the tax cuts without creating an even larger revenue hole, an estimated 110,179 tax filers would each have to pay an average of $1,261 more in income taxes. The vast majority of them are individuals and couples making less than $75,000 annually, as commonly used deductions for mortgage interest and local property tax payments are replaced with a new standard deduction.
Paul Dion, chief of the state Department of Revenue's Office of Revenue Analysis, recently recalculated the numbers issued by Governor Carcieri's tax-reform panel, based on the newest data from 2007.
His findings showed that, if the panel's proposals were adopted: 324,340 resident tax filers would see a tax decrease. The median decrease would be about $122, meaning half of the filers would receive a tax decrease of less than $122 while the other half would receive more.
But 97,817 resident tax filers would still see a tax increase. The median increase would be $188.