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June 8, 2007

Update: House committee unveils state budget

PROVIDENCE -- The House Finance Committee today approved a 2007-08 spending plan that restores funding to many social services, allows some of Governor Carcieri’s cuts to remain and goes even deeper in some places.

Education aid to cities and towns has been completely frozen at this year’s levels, as assembly leaders suggested that municipalities return to local teacher’s unions to shoulder a larger burden of the state’s financial hardship. The governor’s budget plan, released in February, suggested a blanket 3 percent increase.

“This has been a very, very difficult year,” Finance Committee chairman Steven M. Costantino, D-Providence, said at the end of a frantic two-hour meeting in which the panel raced through 43 budget articles with little or no debate. “I don’t believe any of us are really 100 percent happy about what we had to do.”

The budget proposal -- which is subject to approval by the full House next Friday -- amends the tax code to close a number of perceived “corporate loopholes” and freezes the phase-out of the capital gains tax, a move that poverty groups had been advocating for years.

The legislative spending plan will cost state and federal taxpayers $6.99 billion and amounts to a 4.8 percent increase in spending compared to this year.

The budget essentially ignores the governor’s call a day earlier to lay off 1,000 state employees, freeze union-negotiated pay increases, and privatize virtually every state service possible.

Governor Carcieri' s office issued a statement saying he was "gravely disappointed" in the House Finance Committee's proposal.

“This budget is bad for local schools, bad for taxpayers, bad for business and bad for the future of our children and grandchildren," Carcieri said in the statement.

Included in the budget proposal are:

* "Level funding" the total amount of education aid to cities and towns, which means eliminating the 3 percent education-aid increase across the board that Carcieri's budget had called for.

* Allowing Sunday auto sales starting July 1 from noon to 6 p.m., which is expected to increase revenue to the state, but it was not yet clear how much.

* Imposing the so-called “SUV tax” -- higher registration fees for heavier vehicles -- and doubling the fee for a vanity plate.

* Proposed personnel savings across all state departments. No details are available.The governor yesterday proposed laying off 1,000 workers and freezing wages.

* Ending Family Court jurisidiction over young offenders at age 19 instead of 21. The governor has proposed doing so at age 18. That means they could not be sentenced to the Rhode Island Training School, and would instead be slated for state prison.

* Keeping higher-education tuition increases at 6 percent, as the governor proposed.

* Changing eligibility for the Child-Care Assistance Program, now set by law at 225 percent of the federal poverty level, to 180 percent of those guidelines. The governor has proposed 150 percent.

* Adding $745,000 for drug court and $1 million for substance-abuse treatment for parolees to help decrease prison population.

To pass a balanced 2008 budget, as required by law, elected officials must either cut an estimated $90 million from the governor's $7-billion spending proposal released this spring, find ways to raise new revenues, or devise some combination of the two.

Yesterday, the governor announced revisions to his proposal, which included what is believed to be the largest number of layoffs of state workers in state history.

-- Steve Peoples of the Journal State House Bureau, with reports from projo.com staff writer Michael P. McKinney and Elizabeth Gudrais of the Journal State House Bureau

Posted by Mike McKinney  at 6:47 PM | Permalink

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Greg | June 8, 2007 3:26 PM link

r | June 11, 2007 6:14 PM link

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