June 25, 2009

Budget Passes

Marc Comtois

ProJo has the rundown. But for Federal Dollars, our legislators would have been forced to make tougher decisions. As it is....

The $7.76 tax-and-spending plan headed for passage increased overall spending by 12 percent -- including $226.5 million in federal stimulus dollars -- compared to the state budget adopted last June. The state-only portion dropped 10 percent to $2.98 billion.
But it really didn't drop 10% since that $226.5 million in stimulus money essentially covers the decrease in state-only funding. Governor Carcieri's proposals to remove many state mandates and to go deeper into pension reform would have allowed for more savings--or more aid to cities and towns--if the House Leadership would have allowed. But they didn't. Instead, they increased some taxes and fees:

* 2 Cents/Gallon gas tax increase
* Tax capital gains like regular income
* Maintained current corporate tax rate
* Passed the "Amazon tax" requiring RI residents to pay taxes on Internet purchases (with some qualifications--this is a gray area and a similar law passed in NY may end up in the US Supreme Court).
* Increased fees---a) on the criminal background checks; b) $100 processing charge for criminals seeking to expunge their records; c) increased RV beach permits to $100/$200 for residents and nonresidents; d) increased dock permits for oceanfront property owners to $1,500.

There was more that could have been done to mitigate raising taxes and fees. All of the Governors proposed cuts in Human Services were reinstated (one would think some compromise could have been hashed out) while some of the House bills new cuts are pretty vague (like $58 million in undefined state cuts). That being said, there were some bright spots: keeping the flat tax in place, reinstatement of $1.5 million for charter schools and, frankly, the fact that any pension reform was passed. Still, overall, the feeling is "meh." Missed opportunities abound.

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Though concerned after the tobacco money was all consumed, the feds have provided some more dollars to burn in the boilers to so to run the bilge pumps a bit longer.

So the crew of the RI-tanic has declared the emergency to be over and recommenced business as usual.

Posted by: Tom W at June 25, 2009 11:19 AM

Will there be an AR pool to estimate the deficit to be reported by the revenue estimating gang in December? I'll start working on my guess now. It will be in the hundreds of millions, I'm sure.

Posted by: John at June 25, 2009 11:39 AM

Ridiculous. What is so sacred about "human services" that they should be untouched while productive taxpayers sacrifice yet again? The Founders warned us that when government takes on the role of transferring money from one group to another the Republic is doomed.

Without radical cutting and restructuring of these "human services" Rhode Island is doomed. Eliminating "human services" for illegal aliens would be a single step that solves a large majority of the state's money problems.

What is also a shame is that I was there for much of the evening, but the total number of taxpayers in the galleries didn't exceed 20.

Posted by: Bob Newton at June 25, 2009 11:44 AM

>>What is so sacred about "human services" that they should be untouched while productive taxpayers sacrifice yet again?

SCORE - 12 percent total:

Poverty Pimps: 8

Public Sector Unions: 4

Taxpayers: -12

As the stadium burns, the taxpayers and their fans are leaving in growing numbers.

Meanwhile the two winning teams and their fans are oblivious to what is happening around them, consumed as they are in their revelry after putting more points on the board during this budget round.

Posted by: Tom W at June 25, 2009 2:13 PM
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