Treasurer Gina Raimondo has a message for members of Congress: don’t tax municipal bonds.

Raimondo and 41 of her fellow state treasurers sent a letter [pdf] last week to the top Republican and Democrat on the U.S. House Ways and Means Committee, emphasizing “the importance of maintaining the current tax exemption for municipal bond interest” as they consider plans to overhaul the U.S. tax code.

The letter was organized by the National Association of State Treasurers, which describes itself as “a bipartisan organization of state treasurers and other finance officials with similar duties.” The group said tax-free municipal bonds save states and municipalities an average of 25% to 30% on interest costs.

“The tax-exempt bond market has worked effectively for over a century,” Virginia State Treasurer Manju Ganeriwala, the association’s president, said in a statement. “Let’s not dismantle something that works.”

Raimondo, a Democrat, is considering a run for governor in 2014. Here’s her signature on the letter:

Rhode Islanders pay the 13th-highest state and local taxes in the country compared with their incomes, according to the latest analysis of Census data by the Massachusetts Budget and Policy Center.

The $6.9 billion in state and local taxes paid by Rhode Islanders in 2009-10 totaled 11.1% of their personal income, up slightly from 11.0% the prior year, the analysis shows. Just 12 other states took more of their residents’ income in state and local taxes, according to the group.

The national average was 10.6% of income, and Massachusetts ranked 25th at 10.2% of income, the analysis shows. Three other New England states – Maine, Vermont and Connecticut – took more of their residents’ incomes in taxes than Rhode Island did, while New Hampshire took the least.

The left-leaning Massachusetts think tank said it looks at taxes as a share of personal income rather than per capita because it “allows for a meaningful comparison among states.” Another group, the right-leaning Tax Foundation, ranks Rhode Island’s tax burden higher after making adjustments to the data.

• Related: Charts: Regressive RI taxes getting (slightly) more progressive (Jan. 30)

(chart: Massachusetts Budget and Policy Center modified by WPRI.com)

For more than a decade, state and local taxes in Rhode Island have been among the nation’s most regressive – meaning they’re structured to take a larger share of income from the poor than they do from the wealthy.

That said, a WPRI.com analysis of the last decade’s “Who Pays?” studies from the Institute on Taxation and Economic Policy shows the richest Rhode Islanders are paying slightly more of their incomes in state and local taxes than they were in 2002, while the poorest are paying a bit less.

That doesn’t necessarily contradict progressives’ argument that wealthier Rhode Islanders have gotten a tax cut: the studies show the share of income paid by the top 1% in income taxes fell from 5.8% in 2002 to 4.8% in 2013. But that reduction was offset by an increase in how much the top 1% paid in property taxes, which rose from 2% to 3.1%. Here’s how the tax mix for the top 1% has changed over the last decade:

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The Institute on Taxation and Economic Policy is out with its latest look at how much of their incomes different Rhode Islanders pay in state and local taxes, and the big headline hasn’t changed: the state’s tax structure takes almost twice as much from the poorest 20% of residents as it does from the top 1%.

Rhode Island families making less than $18,000 a year will pay 12.1% of their 2010 income in state and local taxes under current law, according to the study by ITEP, a Washington-based research group that is affiliated with the labor-backed nonprofit Citizens for Tax Justice.

At the other end of the spectrum, Rhode Island families making $378,000 or more a year will pay 6.4% of their 2010 income in state and local taxes when the federal deduction for those taxes is taken into account. An analysis by WPRI.com of ITEP’s reports shows that since 2002, state and local taxes have gone up or stayed steady for the top 60% of taxpayers while decreasing slightly for the bottom 40%:

(The 2010 income for the lowest 20% was less than $16,000; for second 20%, $16,000-$27,000; for middle 20%, $27,000-$42,000; for fourth 20%, $42,000-$72,000; for the next 15%, $72,000-$141,000; for the next 4%, $141,000-$328,000; and for the top 1%, $328,000 or more.)

Rhode Island is among 10 states that levy the highest taxes on the poor and is the only New England state in that group, according to the study. It is also one of only three states in the U.S. where the Earned Income Tax Credit isn’t fully refundable, which means Rhode Island families with no income tax liability cannot receive the benefit of the credit, the study says.

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Here’s what Senate President M. Teresa Paiva Weed told The Providence Journal on Dec. 31 when asked about raising income tax rates in Rhode Island: “I would keep an open mind to a tax increase on the highest-wage earners.”

Yet here’s what the Senate president’s newly released report about economic policy suggests on the issue: “The General Assembly could continue to resist increases in broad-based taxes and maintain 2010 personal income tax reforms.”

So does Paiva Weed agree that the income tax rates enacted in 2010 should stay in place? Or is she still open to the idea of raising them? I put the question to her at Tuesday’s press conference, and here’s her entire response:

One of the hardest decisions we make here – I am committed to what the report says. I do not think – and I’ve always been committed – that we should have any change in our tax structure. The Senate was a leader.

But what I have always said is when you look at the budget document, obviously it’s always a choice between vital services and revenue. And I’m always hesitant to say you have a closed mind on anything, because if you don’t look at the budget document in its entirety then you’re making blind choices – on any issue. If you say I support a cut here, I support an increase here – the budget document is perhaps our most significant policy document.

So whenever anybody, quite honestly, asks me any specific question about the revenue side or cut side – I think the finance chairs are always being asked about the cut side, and their famous answer is, ‘Everything is on the table’ – and I think that when asked about the revenue said, we always all say we have to keep an open mind on everything.

Because at the end of the day, as legislators, we recognize that it is a broad picture – it’s a painting – it’s not just one specific event.

There’s two ways to read that statement. On the one hand, she starts off by saying, “I do not think … we should have any change in our tax structure.” Later, though, she says legislators “always all say we have to keep an open mind on everything.” It’s unclear if that means she just ​says​ she has an open mind about tax increases, or if that means she has an open mind despite being resistant to tax increases.

• Related: Paiva Weed offers her take on turning around the RI economy (Jan. 15)

​(photo: Ted Nesi/WPRI)

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Rhode Island’s most prominent political leaders are divided on whether they should allow the public to review their income tax returns and find out how much they paid the government.

Out of 12 leading politicians surveyed by WPRI.com, six said they would disclose the results of their 2011 tax filings as soon as they become available: U.S. Sen. Jack Reed; Congressman David Cicilline; Republican congressional candidate Brendan Doherty; Republican U.S. Senate candidate Barry Hinckley; Treasurer Gina Raimondo; and Secretary of State A. Ralph Mollis.

Tax rates have become a political hot potato in 2012. Democrats spent the last few weeks publicizing their proposed “Buffett rule” requiring a higher tax rate on income above $1 million, and President Obama is pressuring Republican Mitt Romney to release his returns. In the U.K., David Cameron may soon become the first British prime minister to disclose his tax bill.

U.S. Sen. Sheldon Whitehouse, who led Democrats in beating the drum for the Buffett rule, requested an extension to finish his 2011 tax returns, spokesman Seth Larson said. Larson declined to say whether Whitehouse will break with his past practice and release his returns once they’re completed. In 2010, Whitehouse disclosed that his net worth was at least $3.5 million.

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As we reported on last night’s 11:00 news, legislative leaders stealthily slipped a new tax on state contractors into the final amendment to the pension bill before it passed both chambers last night. Unless I missed it, there wasn’t much – if any – discussion about the tax, though Rep. Larry Earhardt questioned it after it passed.

Since no hearings were conducted on the impact of the tax – which fulfills a long-sought goal of organized labor – it’s hard to figure out exactly what the impact will be, both fiscally and on businesses affected. No state official would speak with me on the record last night about whether the proposal was vetted by the state’s budget analysts.

Below is the text of the part of the leadership amendment that created the new tax (or “assessment,” in legalese) – the language is quite broad. On Twitter, the SEIU’s Phil Keefe emphasized to me that the money will go into the pension fund. “Wait and see,” he said. What do you think its impact will be? Leave your thoughts in comments.

24. On page 112, between lines 7 and 8, by inserting the following language:

“SECTION 23. Chapter 42-149 of the General Laws entitled “State Expenditures for Non-State Employee Services” is hereby amended by adding thereto the following section:

42-149-3.1. Assessment on state expenditures for non-state employee services. – Whenever a department, commission, board, council, agency or public corporation incurs expenditures through contracts or agreements by which a nongovernmental person or entity agrees to provide services which are substantially similar to and in lieu of services hereto fore provided, in whole or in part, by regular employees of the department, commission, board, council, agency or public corporation covered by chapter 36-8, those expenditures shall be subject to an assessment equal to five and one-half percent (5.5%) of the cost of the service. That assessment shall be paid to the retirement system on a quarterly basis in accordance with subsection 36-10-2(e).”

Update: Keefe added more details on Twitter. “Call it a pension tax,” he wrote. “It will be based on payroll. It’s a moneymaker for the state and could be changed to total contract [value] under new contract terms.” (I spelled out his Twitter-required abbreviations.)

Update #2: Common Cause Rhode Island’s John Marion expressed dismay about the sudden addition of the assessment on contracts. “The special pension session laudably avoided many of the last-minute changes that we see on significant legislation during the regular legislative session,” he said in an email. “Unfortunately we did see a significant change made in the final bill that was not vetted, and the public suffers because of that.”