June 17, 2009

Budget Details Trickling Out

Marc Comtois

The House Finance Committee is releasing its modifications to Governor Carcieri's proposed budget. Here's what we've learned (via the ProJo 7to7):

Tax Increases:

* Raise the gas tax by 2 cents/gallon (earmarked for RIPTA)
* Require out-of-state websites (think Amazon.com) to charge RI consumers Rhode Island's 7% sales tax when applicable.
* Rejects most of the governor's tax-cut proposals.
* Eliminates recent capital gains tax breaks.

Program Cuts

* Eliminate the general revenue sharing program. (Saves the state $55 million. Now it's up to the local communities....)
* Eliminate $6.3 million aimed at education system professional development
* Cuts $1.7 million that Governor Carcieri had proposed for charter schools.

Program Retentions

* Restores funding for Rhode Island's Pharmaceutical Assistance to the Elderly program.
* Restores funding for dental services via the RIte Care program .
* Continues to subsidize health care for 28 moderate-income pregnant women slated to lose coverage.
(No indication how much these restorations "cost").
* Restoration of $1.9 million for "nursing home acuity rates".

Pension Changes:

* "attempts to cut $45 million"
* "adopt age 62 as the new "target'' age for retirement. In actuality, however, the minimum age for retirement would vary widely depending on how long an employee had worked and how close he or she was to qualifying for retirement."


$226.5 million in Federal stimulus money is used to help shore things up.
$58 million in savings "through an across-the-board cut for all state departments."


The state budget released by the House Finance Committee Wednesday represents $7.76 billion in spending. Of that total, $2.98 billion represents state-only spending, known as "general revenue." The rest largely comes from the federal government.

Overall spending is up 12 percent from the $6.92-billion state budget approved by lawmakers for the current fiscal year. But the general revenue portion is down, roughly 10 percent, from the $3.28 billion originally approved for the current year.


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Thanks for the helpful summary, Marc.

"Saves the state $55 million. Now it's up to the local communities..."

Okay. The question is, does this budget give the cities and towns the tools they need to control their own budget? More specifically, have unfunded mandates been lifted?

Posted by: Monique at June 17, 2009 4:47 PM

Yeah, it's not like us in East Providence have been trying to cut spending or anything. As we all know, that's been smooth sailing. It's not like there are any obstacles in our way. Honestly, what do you expect from them? Reform? Common Sense? Pro-growth and pro-business solutions?

"Trickling" certainly seems to be the appropriate verb, as in "don't pee on my leg and tell me it's raining." Trickling is also what's happening in regard to the people who are leaving to state. It's not about trickle down, it's about trickle out. Simply put, you can't tax them, if they don't live heere anymore.

I have a friend who retired within the last few weeks, and is, as all good Rhode Island retirees do, planning to move to Florida ASAP. Of course, first he has to sell his RI house. I certainly can't blame him.

PS I personally don't care if they raise the gas tax to $10 a gallon in Rhode Island. I already buy exactly 0.0% of mine in Rhode Island, along with thousands of others who live in border communities. Come to East Providence and see how many closed gas stations there are. Check out the gas lines at the Hess station in Seekonk. Except for the newer model cars, you'd think it were the 1970s all over again (which it may just well be before too long).

Posted by: Will at June 17, 2009 5:10 PM

The ProJo reported ten minutes ago that the Finance Committee had just approved the budget 16-1.

Posted by: Monique at June 17, 2009 6:03 PM

All aboard!

The last lifeboat is about to leave the RI-tanic!

For those of you staying, the band plays on! Come on up to the promenade deck and enjoy the usual song and dance from the RI-tanic's own band "The Smith Hill Gang."

Posted by: Tom W at June 17, 2009 6:12 PM

No wonder they were afraid to confront the Tea Party last week. It's time for massive action.

RIILE estimates that the RI spends over $400 million on illegal aliens alone, using statistics provided by the poverty pimps themselves. How about eliminating that spending as the first step?

If this goes through, I'll take the loss on my house and leave.

Posted by: Bob N at June 17, 2009 7:25 PM

"Overall spending is up 12 percent from the $6.92-billion state budget approved by lawmakers for the current fiscal year."

UP 12%? Are you f#@&ing kidding me???

Posted by: Mike Cappelli at June 17, 2009 9:16 PM

Mike, Mike, Mike. It's fine, really.

Sure, spending is up 12%. But the increase is mostly from federal tax dollars - you know, the ones that don't count because they're free ...

Posted by: Monique at June 17, 2009 10:11 PM

The 7% "Amazon" tax is not applicable across the board.
If the seller has no functional equivalent of a retail site in RI,they cannot charge the tax.
It's all contained in the Circuit Court decision relating to such a law in NY.

Posted by: joe bernstein at June 17, 2009 10:29 PM

If what Joe is saying about the "Amazon" tax is true, then they'll be projecting revenues that will never materialize. Likewise it is unlikely the extra 2 cents on gas will generate any additional revenue for reasons Will rightly mentions above. Heck, I live in Cranston (still, unfortunately) and I just might start taking the family out for a weekly ride to Mass. for gasoline and Portugese food and/or ice cream.

Further in agreement to Mike Capelli and Monique's points... SO WHAT that the 12% is stimulus money: They've still squandered an opportunity to restructure the budget to a smaller, less burdensome, less oppressive baseline. As predicted, federal cash has just made it easier for them to spend more and tax more. Cowards!

Posted by: George at June 17, 2009 10:54 PM

"The ProJo reported ten minutes ago that the Finance Committee had just approved the budget 16-1."

But how could this be? Have they all read through the budget already? Ha, ha, ha. Absolute power corrupts absolutely.

PS Please tell me the "1" was at least a Republican this time!

Posted by: Will at June 18, 2009 12:45 AM

"As predicted, federal cash has just made it easier for them to spend more and tax more. "

This year was their chance to make hard choices and not face the voters. A smart move might have been to make some choices this year and find a way to use the stimulus money in next year's budget. Even though, they seem to keep pulling rabbits out of the hat with "free" money appearing out of the sky to plug budgets, I don't know that there will be another $226.5M in stimulus money next year. And next year they hit the campaign trail again.

Is anyone working on opposing these people yet or are we going to have the usual 60 races where maybe 15 of them are actually credible and maybe 2 lose their seat? Could we see another Alves/Montalbano situation? Can someone take out Fox, Constantino, Paiva-Weed, Murphy? Or are we all talk?

I think it's at least Will's turn to start buying yard signs with his name on them, among others...

Posted by: Patrick at June 18, 2009 7:33 AM


Posted by: kathy at June 18, 2009 3:42 PM
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