November 14, 2006

Rhode Island's Retrograde Fiscal Culture, the Saga Continues

Carroll Andrew Morse

According to an unbylined story in today's Projo, as was the case last year, a budget shortfall for Rhode Island is being projected for this fiscal year...

The state's budget situation looks bleak, real bleak.

The amount of cash flowing into the state's coffers this year is estimated to fall $74.2 million short of previous predictions, causing a major headache for all branches of state government.

To further exacerbate the problem, a report due out later this week is expected to show that department spending is far above what has been budgeted. Those added expenses could push the current year deficit well above $100 million, according to state Budget Officer Rosemary Booth Gallogly.

As was also the case last year, our neighbors in Massachusetts and Connecticut are not experiencing similar crises. The State Comptroller of Connecticut is projecting a surplus for for fiscal year 2007?
State Comptroller Nancy Wyman today projected the state will end the 2007 fiscal year with a budget surplus of $266.4 million.

The estimated surplus increased by $53.5 million over the last month. That growth was mainly due to higher-than-expected revenue from the income tax, especially the capital gains portion of the tax related to investors' robust returns from the financial markets. Modest job growth of about 1,700 positions in September also produced higher revenue from the payroll-withholding portion of the tax.

And while Massachusetts does not provide a comprehensive monthly forecast including both revenues and spending like Connecticut does, according to the Massachusetts Department of Revenue, as of October's collections, revenue collection by Massachusetts is very slightly ahead (about $16,000,000 out of a total of $18,900,000,000) of what was anticipated.

Unsurprisingly, the fundamental problem facing Rhode Island has not changed from a year ago...

The fact that our neighbors doing well shows that the Rhode Island budget shortfall is not a problem created by implacable macroeconomic forces spiraling out of control; economic conditions in Rhode Island are similar to economic conditions in Massachusetts and Connecticut.

Rhode Island's problems are rooted in poor fiscal management and irrational spending policies. They cannot be solved by giving even more money to the government that created this mess in the first place.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

Also, gambling revenues are down. But I thought they were the cure to all of our ills?

Posted by: Marc Comtois at November 14, 2006 11:54 AM

It's all "Enron Don"s fault!

Look, mom! I'm pretending to be a liberal hack like Bobby!

Posted by: Greg at November 14, 2006 2:03 PM

A friend said to me yesterday of someone, "It doesn't matter how much money he makes every year, he spends more."

The same is true of our state government. We do not lack for revenue - in addition to ample gambling proceeds, Rhode Islanders are the fifth highest taxed.

My fondest desire for the state is average-ness. Not that we offer some of the most generous welfare benefits in the country, just that we offer average benefits. Not that we have a super-sized state government, just that we have an average one. Et cetera.

Posted by: SusanD at November 14, 2006 2:15 PM

Just wait til Carcieri and Murphy watch their tax cut for the rich kick in - now THAT will cure our budget ills!
This response program could really use a sarcasm font.

Posted by: Rhody at November 14, 2006 2:22 PM

Slay the union pig and watch the state blossom

Posted by: Tim at November 14, 2006 6:39 PM

The voters rejected the unions, Tim. Look how much effort the unions put into Question 1 - and the beating it took (I'm probably one of the few union people who voted against it). If the unions were as powerful as you think, we'd be breaking ground in West Warwick about now.

Posted by: rhody at November 14, 2006 11:41 PM

Slay the union pig and watch the state blossom

Posted by: Tim at November 15, 2006 7:36 AM

I have to agree with Rhody. Just watch what happens in the General Assembly when, faced with a $350 million deficit, the Democrats confront the choice between cutting public sector pension costs or cutting social welfare spending? Any bets on which group gets thrown under the bus? Frank Montaro? Marti Rosenberg? And where will Bob Walsh come down (apart from his predictable raise taxes to cure these problems squeal)?

Posted by: John at November 15, 2006 1:29 PM

Oops. That's "Mr. Montanaro." No disrespect intended, sir. Marti has that angle well-covered.

Posted by: John at November 15, 2006 1:31 PM

" ...when, faced with a $350 million deficit, the Democrats confront the choice between cutting public sector pension costs or cutting social welfare spending?"

I have a couple of questions for Speaker Murphy.

Sir, you are the most powerful person in state government. You set budget priorities. Can you please tell us how either the state as a whole or the recipients are improved by the extremely generous welfare benefits offered by this state?

Let me now ask a more pragmatic question. Do you really believe you or your supporters would be in any political danger if you brought welfare benefits in line with those offered in neighboring states? [Here's a hint: no. Just the opposite.]

Posted by: SusanD at November 15, 2006 9:49 PM

SusanD -

Consider that there is a faction of Democrats - the welfare industry wing (Rhoda Perry, Paiva-Weed, Levesque) that view welfare as inherently good and noble, and so more is always better. They have a "devil's pact" with the rest of the Democratic Party - they remain silent regarding the corruption and patronage they see around them in return for getting their "social services" funded.

Up until now, the unions have been on board, because these programs are staffed by unionized employees - so that many more dues units for the union bosses. (This may change as the budget battle between welfare and the unfunded pension liability develops.)

But also consider that as the population has been shifting to the suburbs, they tend to become more Republican leaning.

To preserve its base, and keep a statewide majority of the electorate, the Democratic Party needs to replenish their urban core. Welfare magnet status accomplishes this.

The Democrats are corrupt, but they aren't stupid. They know exactly what they're doing with welfare.

Posted by: Tom W at November 16, 2006 8:05 AM
Post a comment

Remember personal info?

Important note: The text "http:" cannot appear anywhere in your comment.