•Fiscal Dividend – the benefits of growth
–Economic growth increases both employment and income, and, with an income tax system, this automatically produces more tax
revenue. The
added tax revenue resulting from economic growth is fiscal
dividend
–The more rapid is economic growth, the greater is fiscal dividend, allowing
more spending to be “affordable”
–Rhode Island is a lagging economy, so its fiscal dividend is not as great
as it would be with more rapid growth. This has made a number of desirable spending items
“unaffordable”