November 10, 2007

Will a $450 Million Budget Deficit Wake 'Em Up?

Marc Comtois

No one should be surprised that the State is looking at a $450 million shortfall for FY08. Governor Carcieri has been warning us that we would have to cut State programs and payrolls in the near future. Turns out his idea reduce state spending by $200 million was based on a downright rosy forecast.

Knowing there would a deficit, [Governor Carcieri] had already proposed a sweeping plan he says will save $100 million by cutting the state’s work force by 1,000 jobs. He also plans to save $50 million by reducing employee benefits and another $50 million by cutting or consolidating social-services programs.

It is now clear that he will have to do much more to propose a balanced budget, which he must do by law.

“Governor Carcieri has been sounding the alarm about the state’s budget situation since before the end of the last legislative session,” said the governor’s spokesman, Jeff Neal. “Unfortunately, it is now clear that implementing the governor’s spending-reduction plan is just the start of what is required to resolve Rhode Island’s growing budget crisis. Every branch, department and office of state government must work together to solve this problem.”

But will they finally listen? Instead of working with him, the legislature has decided to nitpick and nibble around the edges of our bloated State government. For their part, the Courts and AGs office have simply said, "Sorry Guv, look elsewhere for cuts." Time to grow up, folks.

Of course, we all know that the first "idea" floated will be tax increases. No surprise at the source:

“The national economy is weak. It’s not the state’s fault it’s weak. But it’s become the state’s problem,” said the Poverty Institute’s chief economist, Ellen Frank, one of the few members of the public to attend yesterday’s meeting...Overall, the forecast is so bleak, Frank said, that the state must do more than cut spending.

“Facing these kinds of deficits, we need to look at every possible source of revenue we can,” she said, calling on lawmakers to reconsider tax cuts to high-income Rhode Islanders such as the recently instituted flat tax and the phase-out of the capital-gains tax.

But even if this oft-repeated "strategy" was implemented, it still wouldn't make up the difference. Sorry Ellen, time to make some cuts.
“Raising taxes on Rhode Island’s already overtaxed citizens is not the answer,” [governor's spokesman, Jeff] Neal said.
I'm not holding my breath yet. I suspect that, instead of dealing with the structural problems caused by too much government, the General Assembly will continue to take a short-term view and cut various capital projects in the hopes that some sort of fiscal miracle will occur next year. For his part, the Governor has already scaled down the plans for new State Police Barracks, with the blessing of superintendent of state police, Col. Brendan Doherty. That is the sort of leadership the state needs right now. So far, no one else is stepping up to the plate.
With a $150-million budget hole this year — and a potential deficit three times that size next year — each state agency was originally asked to shave 10 percent or more off their projected spending for the fiscal year that begins July 1. All were required by law to submit their spending and cost-cutting plans to the state Budget Office by Oct. 1, but few did.

As of yesterday none of the large state agencies — including the Department of Human Services, the Department of Mental Health, Retardation and Hospitals, and the Department of Children, Youth and Families — had submitted a plan. And the budget requests from the courts and a handful of smaller state agencies come at the projected multimillion deficit from 180-degree angles.

From the judiciary, for example, came a proposal to spend $1.5 million this year and next replacing ceiling tiles and light fixtures in the Garrahy Judicial Complex. The explanation: “The distraction of discolored ceiling tiles and inefficient lighting diminish the public trust and confidence in the judicial building in [that] its current physical state is less than reverent.” The judiciary is also pursuing plans to build a new Blackstone Valley courthouse.

Other agencies are looking at fee hikes and retrenchment.

And others are complaining:
Public Defender John J. Hardiman, for example, said the restraints placed on his agency would necessitate a 20-percent cut in staff, which, in turn, would render his agency “unavailable for legal representation in any parental-rights cases statewide, or any juvenile case statewide or any proceeding alleging a violation of felony probation in any Superior Court.”
By now, we should all realize that this is about more than just making cuts or raising taxes. Hopefully, this projected deficit will cause a paradigm shift in the ongoing budget debates. As Jeff Neal said:
“...we need to decide what amount of state government Rhode Island taxpayers can afford. Implementing an affordable Rhode Island will take leadership and tough, sometimes unpopular decisions. Governor Carcieri looks forward to working with the General Assembly and with other branches of state government to make those difficult choices.”
It's about time the rest of our State Government wake up from their dreams of unchecked government growth and join the Governor in working towards a long term solution.

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Believe it or not, I think you're being too optimistic in your headline!

According to the Projo article, the state is facing a total budget shortfall of between $400 million and $450 million for fiscal '08 PLUS a shortfall of $150 million to pay for this year's programs, for a total shortfall of at least $550 million, and possible as high as $625 million.

And I don't think tobacco money is an option for plugging the current year deficit this year.

Posted by: Andrew at November 10, 2007 10:32 AM

I think the maggots on Smith Hill have gotten the message from the declining sales tax and cigarette tax revenue that in a state this small people will evade consumption or service taxes. Income taxes are already the second highest in America -9.9% compared to California's 10.4%.
So that's played out. Look for the flat tax to be ended, capital gains back to 5%. Say goodbye to the Historic and Film credits. All of that won't raise more than $100 million of the $600 million deficits ($150 million for FY 08 plus the $450 million for FY 09).
Unless the GA intends to override the governor's veto of a broad based tax hike in an election year (and call it the "Elect more GOP legislators in 2008 Act") there will be half a billion dollars in budget cuts by July 1.
The corrupt, quasi-Marxist policies of the last decades have finally caught up with the maggots. The geometric increases in payroll, benefits and welfare have produced the inevitable collapse of the system
Harvest Day is here.

Posted by: Mike at November 10, 2007 10:33 AM

Guess the tax cut for the rich wasn't the magic bullet, eh?
I feel so safe knowing my tax dollars are in the hands of the noble leadership triumverate Carcieri, Murphy and Montalbano. I guess their union bigwig AND corporate pals are gonna have to tighten their belts just a bit.

Posted by: Rhody at November 10, 2007 12:55 PM

As in many respects Rhode Island (with its declining economy, failed educational system, deteriorating roads and collapsing bridges) increasingly resembles the early chapters of Atlas Shrugged, a few quotes (for the edification of the folks at the Poverty Pimp Institute and the other rent seekers) seems apropos:

Why is it immoral for you to desire, but moral for others to do so? Why is it immoral to produce a value and keep it, but moral to give it away? And if it is not moral for you to keep a value, why is it moral for others to accept it? If you are selfless and virtuous when you give it, are they not selfish and vicious when they take it?

I think it's funny. There was a time when men were afraid that somebody would reveal some secret of theirs that was unknown to their fellows. Nowadays, they're afraid that somebody will name what everybody knows. Have you practical people ever thought that that's all it would take to blast your whole, big, complex structure, with all your laws and guns --- just somebody naming the exact nature of what you're doing?

I could say to you that I have done more good for my fellow man than you can ever hope to accomplish - but I will not say it, because I do not seek the good of others as a sanction for my right to exist, nor do I recognize the good of others as a justification for their seizure of my property or their destruction of my life. I will not say that the good of others was the purpose of my work - my own good was my purpose, and I despise the man who surrenders his. I could say to you that you do not serve the public good - that nobody's good can be achieved at the price of human sacrifices - that when you violate the rights of one man, you have violated the rights of all, and a public of rightless creatures is doomed to destruction. I could say that you that you will and can achieve nothing but universal devastation - as any looter must, when he runs out of victims. I could say it, but I won't. It is not your particular policy that I challenge, but your moral premise.

As a basic step of self-esteem, learn to treat as the mark of a cannibal any man's demand for your help. To demand it is to claim that your life is his property --- and loathsome as such claim might be, there's something still more loathesome: your agreement. Do you ask if it's ever proper to help another man? No - if he claims it as his right or as a moral duty that you owe him. Yes - if such is your own desire based on you own selfish pleasure in the value of his person and his struggle. Suffering as such is not a value; only man's fight against suffering, is. If you choose to help a man who suffers, do it only on the grounds of his virtue, of his fight to recover, of his rational record, or of the fact that he suffers unjustly; then your action is still a trade, and his virtue is the payment for your help. But to help a man who has no virtues, to help him on the ground of his suffering as such, to accept his faults, his need, as a claim - is to accept the mortgage of a zero on your values. A man who has no virtues is a hater of existence who acts on the premise of death; to help him is to sanction his evil and to support his career of destruction. Be it only a penny you will not miss, or a small smile he has not earned,a tribute to a zero is treason to life and to all those who struggle to maintain it. It is of such pennies and smiles that the desolation of your world was made.

For centuries, the battle of morality was fought between those who claimed that your life belongs to God and those who claimed that it belongs to your neighbours - between those who preached that the good is self-sacrifice for the sake of ghosts in heaven and those who preached that the good is self-sacrifice for the sake of incompetents on earth. And no one came to say that your life belongs to you and that the good is to live it.

Posted by: Tom W at November 10, 2007 12:55 PM


This state, smaller than many counties in average sized states, cannot independently go its own way on tax policy, unless it is to lower tax rates and make it up on volume by attracting rather than repelling those with talent, resources and money to make their own way and also to create jobs for others. I believe that all the usual suspects only reluctantly voted for general tax breaks which unlike targeted ones provide no quid pro quo jingling in their pockets. Their hand was forced; no matter what they profess, I don't think they are so stupid as to have missed this approaching train wreck. It appears to me that it was a matter of too little too late.

Posted by: chuckR at November 10, 2007 2:10 PM

Don't be too smug. The welfare mooches you worship are going to get walloped too!
Harvest Day is here.
Also, look for the resounding sound of silence from the GA (remember Billy Murphy's promised October deficit Reduction Plan- and from the "progressives" Pat Crowley, Jerzyk, Seagal and the rest of the clowns.

Posted by: Mike at November 10, 2007 2:56 PM

And let's not forget that according to Ellen Frank, the Poverty Institute's Brain, the entire state of Rhode Island is now a victim...Our current state of affairs has nothing to do with our own decisions and behavior over the past decade...Beautiful.

Posted by: John at November 10, 2007 5:04 PM

THis is all too funny to me. I have sat back and watched these absolute morons like Ellen Frank from the Poverty Institute wax on in their idiocy, talking stupid about just what the problems are. That she is even given a forum is a a testament to all the other stupid morons in this state.
I am going to enjoy watching them suffer. They brought is on themselves. It is only right that they do so.

Gut the social programs to keep the slime from coming into this state for the overly generous benefits.. It is very simple. Theywill not come if we make it uncomfortable for them to be here. What a novel concept.

Posted by: Aztec at November 10, 2007 5:42 PM

When the poverty pimps caterwaul "These poor people won't be able to afford to live here anymore!" we need to be sure to speak loudly and clearly with one voice that, "Yeah, we know. That's kind of the idea. Stop giving the lazy a reason to COME to Rhode Island and leeching off the taxpayers and the drain on society will diminish as the leeches find more generous states to watch soap operas all day in."

Posted by: Greg at November 10, 2007 6:01 PM

Greg you're soooo mean spirited! ;-)

Posted by: Ragin' Rhode Islander at November 10, 2007 7:32 PM

You want 'mean-spirited'?

NO benefits for illegal aliens outside of those CLEARLY mandated by the federal government. State agencies will be required to verify social security numbers and violations will be reported to the State Police for investigation of identity theft.

Posted by: Greg at November 10, 2007 8:12 PM

To listen to Mike and Chuck, one would think welfare recipients got us into the quagmire in Iraq. Poverty pimps set fire to The Station. It's their fault when it rains.
Do those statements sound ridiculous? Yes, kind of like yours. If you hate being around poverty so much, why don't you go somewhere where you don't have to worry about it? That little fellow who runs North Korea could always use some houseboys, and you'd never have to worry about being within smelling range of a welfare recipient again.
Cheese with your whine, gentlemen?

Posted by: Rhody at November 10, 2007 11:58 PM

Rhody blurts

"If you hate being around poverty so much, why don't you go somewhere where you don't have to worry about it?"

I'd prefer to stay here but with more people having the opportunity to get out of poverty. That can't happen without jobs and those jobs won't happen without a better tax policy. Oh, and better education. Oh, and a tough love policy towards welfare like the one Bill Clinton signed into law a decade ago. All necessary components.

And Rhody, if you love poverty so much, just be sure to vote for the sort of idiot who only knows how to raise taxes and increase spending.

Posted by: chuckR at November 11, 2007 12:47 AM

Somebody please give Chuck another tax cut. The one Carcieri, Murphy and Montalbano just gave him obviously wasn't enough.
If Clinton had such a great welfare policy (which I had no problem with), why did conservatives wage jihad against him while he was in office?

Posted by: Rhody at November 11, 2007 1:28 AM

The "little fellow from North Korea" would be right at home with the atheist "progressives" at RI Future.
By the way, still not a word on the $600 million dollar hole on either RI Future or "journalist" Ian Donnis's blog.
Talk about whistling past the graveyard.
Guess it's time to fire up another vital Darfur Resolution. LOL.

Posted by: Mike at November 11, 2007 10:36 AM

I'm curious as to how much money and time Rhody gave to anti-poverty charities last year. If you're such a champion of the poor, what have you done to fix it?

Posted by: Greg at November 11, 2007 3:12 PM

I've donated, but more importantly, I don't blame the powerless in society for our ills. If you think the less wealthy have destroyed Rhode Island (even more so than the politicians and corporations who have raided our state's treasury), well, you're beyond help.
Blaming the victims of policy is easy. Standing up to the powerful is hard.

Posted by: rhody at November 11, 2007 3:57 PM

Mike, if all progressives are atheist, I hate to imagine what you think of the religious communities who support progressive goals (or are all non-Catholics, non-Mormons, or non-conservative evangelicals who also believe in God athiests, too? I won't even bring up non-Christian religions).

Posted by: rhody at November 11, 2007 4:00 PM

Like the vast majority of RI Future dwellers, Kim Jong- Il, like Stalin, Mao, Pol pot, etc. is progressive, atheist, pro-abortion, pro gun confiscation, pro government health care and pro "public" schools.

Posted by: Mike at November 11, 2007 6:45 PM

--I've donated, but more importantly, I don't blame the powerless in society for our ills.

Except for the few with significant physical / mental disabilities, the welfare bums and bumettes had the POWER to apply themselves to the their full potential in the schools provided at no charge to them by the taxpayer; they had the POWER to NOT drop out of school; they had the POWER to keep their legs crossed and not have babies out of wedlock.

To the lazy, the dropouts and the breeders: screw - you brought your situation upon yourself.

--If you think the less wealthy have destroyed Rhode Island (even more so than the politicians and corporations who have raided our state's treasury), well, you're beyond help.

First, there is not "state treasury" without OUR wallets. The DEMOCRAT politicians are the ones who keep raiding OUR wallets, on behalf of the real raider that you conveniently neglected to mention - the public sector unions.

--Blaming the victims of policy is easy. Standing up to the powerful is hard.

You're right, we honest, hard-working at real (not patronage) job private-sector taxpaying victims are having a hard time standing up to coop between the mob / union /welfare industry / Democrat Party power structure in this state!

Posted by: Ragin' Rhode Islander at November 11, 2007 6:50 PM

"Guess it's time to fire up another vital Darfur Resolution."

Wrong, wrong, wrong.

Heated dog houses, Mike. That is the critical matter of this day and this state.

Posted by: Monique at November 11, 2007 9:36 PM

Ragin, if you want to join me in waking up the voters to get rid of thugs like Montalbano and Murphy, I'm all ears. But even those who complain loudest about unions tolerate those two leeches sucking on the corporate (and taxpayers') teat. Shame on the voters of West Warwick, north Providence and Pawtucket who send in those two clowns.

Posted by: rhody at November 12, 2007 1:03 AM

--Shame on the voters of West Warwick, north Providence and Pawtucket who send in those two clowns.

Hey, you Democrats have conditioned your robots to pull the straight Democrat lever at the polling place, so don't complain about the result.

Posted by: Ragin' Rhode Islander at November 12, 2007 8:01 AM

Ragin, that's precisely why I'm no longer a Democrat. I'm not supporting a party that gives Rhode Island those clowns, or Ralph Mollis, or Susan Menard.
There are individual Democrats I support, but these days, I'm just as likely to vote Republican (supporting progress and reform does require it sometimes).

Posted by: rhody at November 12, 2007 12:27 PM

A few thoughts and questions-

1. By this time next year, there will be increased taxes AND spending cuts.

2. Given that the state's budget affects multiple stakeholders, why does the Projo always quote the Poverty Institute and RIPEC, but other views aren't represented anywhere near as frequently?

Don't get me wrong, I think it's important for the poor to have a voice, but the Poverty Institute provides only one perspective on poverty. Maybe its time for someone to introduce an Empower America-style organization focused on RI.

Given the scope of this story, one would hope the Projo would at least try to cover the story beyond the obligatory quotes from RIPEC and the Poverty Institute.

9. Does anyone else find it ironic that of all the Poverty Institute's contributors, the only active politician listed is June Gibbs, a Republican?

There are other familiar names on the Gewirtz fund: Caruolo, Enos, etc. but as far as I could tell, it usually belonged to a former politicians or spouse.

3. Rhody, given the recent successes in Iraq, you may have to re-consider the word "quagmire." Even NBC News admitted last night that the surge has made significant progress.

4. I do agree with Rhody on one point. It's not the fault of the poor that RI is in this current condition. It is the fault of those politicians who thought they were helping the poor, when it turned out they were encouraging the poor to rely upon unsustainable services for the long term.

5. Voters in N.P. and West Warwick may have elected Murphy and Montalbano to the House and Senate, but it is our reps. and senators who elected them as the LEADERS of the House and Senate.

6. Does anyone else fear that the financial geniuses in the RI General Assembly will respond to the budget crisis by attempting to buy millions of dollars worth of Powerball tickets?

Posted by: Anthony at November 12, 2007 3:45 PM

Based on the accounts of the recent arrests at the DMV, we should consider the benefits of sales of drivers licenses to illegal aliens. I wouldn't put it past the GA to take it national - sell 150000 units and voila, this year is back in the black.
For the humor impaired and the overly righteous, I kid, I kid.
But over the next few months, I predict that we will see proposals just as outrageous that are made seriously.

Posted by: chuckR at November 12, 2007 10:00 PM

"Voters in N.P. and West Warwick may have elected Murphy and Montalbano to the House and Senate, but it is our reps. and senators who elected them as the LEADERS of the House and Senate."

Very true, Anthony. The problem is that historically (most recent in Mass., when reformers tried to unseat Billy Bulger from the Senate throne), voters in local races aren't attuned, or don't care, about who the candidates back for legislative leadership (i.e., running on a pledge to vote against Murphy in a House race probably won't win you any more votes).
It's a shame, really. Voters should really start asking candidates where they stand on legislative leadership, whether they back it or reject it.

Posted by: rhody at November 13, 2007 11:34 AM
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