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January 17, 2008
Carcieri's budget plan calls for furloughs, state aid cuts
Governor Carcieri released a sweeping budget proposal today that would make dramatic cuts and changes affecting all state employees, cities and towns, several thousand low-income health-care recipients -- and even cell-phone users.
Carcieri’s plan, known as a supplemental budget, would revise the 2007-2008 state spending plan the General Assembly passed in June. Both the legislature and the governor agree there is urgency in adopting the revised budget in the coming months to close a current-year deficit projected at $151 million.
The proposals released today may help in closing next year’s projected $450-million budget deficit, but Carcieri plans to release a separate 2008-09 budget in the coming weeks.
The legislature ultimately needs to approve the governor’s plans, which State Budget Officer Rosemary Booth Gallogly says should be passed by March to achieve all of the proposed savings. Assembly leaders weren’t immediately available to comment.
The governor’s 119-page supplemental budget includes a provision that would cut $10 million in state aid to cities and towns for the current year, in addition to reducing their reimbursements on the motor vehicle excise tax by $2.7 million.
Asked why the governor would take money away from municipalities in the middle of a budget year, Gallogly said that many communities have healthy budget reserves that could make up the cut.
Urban areas will be hit particularly hard by the plan, including Providence (which would lose around $2.9 million), Pawtucket (more than $1 million), Cranston (more than $1 million) and Woonsocket (more than $700,000).
Carcieri also outlined a plan to require all of the Rhode Island 15,000 or so state employees to take six unpaid days before the end of June. Gallogly said the days off would be flexible, adding that she hoped to work out an agreement with labor unions in the coming weeks.
-- Steve Peoples of the Journal State House Bureau
AFL-CIO Treasurer George Nee earlier reiterated organized labor’s opposition to a similar furlough plan proposed by the governor last year.
"If people have those kinds of proposals … they have to do that through the collective-bargaining process," he said, "otherwise you’re reducing people’s waging unilaterally."
Gallogly said the governor may asked the General Assembly to pass a law mandating the furloughs, and she suggested “another option” that would allow the governor to act unilaterally if necessary. The furloughs would save approximately $14.8 million, Gallogly said.
Meanwhile, a separate proposal would allow the state to cut state subsidized health insurance, known as RIte Care, for approximately 2,000 immigrant children living in Rhode Island.
Department of Human Services Director Gary Alexander said that facing a severe budget deficit, the state needs to prioritize its benefits for citizens.
The governor has backed off plans to cut health-care for another 8,000 low-income children, but included a measure to cut benefits to more than 7,000 adults on RIte Care.
Among the more unusual proposals outlined today, the governor suggested changing state law to ban “hand-held mobile telephones while driving.” A new $50 fine would be created for the offense, which has previously failed to pass the Assembly.
In all, the revised spending plan would cut state expenditures by $83.2 million by the end of June, while raising approximately $68.8 million in new revenues.
The revenue changes include capping the tax credits allowed by the state’s historic tax program at $20 million in the current year and $40 million in subsequent years. Historic preservationists have credited the program with helping to revitalize dilapidated mills and crumbling buildings around the state.
In a press release advancing the budget release, Carcieri said his staff has already reached out to Democratic and Republican legislative leaders to talk about the options and some of the plans his office is considering.
“Based on those meetings, I believe that the General Assembly recognizes the severity of the budget problem and is willing to work with my administration to craft a solution," Carcieri stated.
Carcieri said the shortfall mainly came about because of a fall-off in state revenues such as taxes and lottery proceeds and in projected caseloads in some state financed programs.
Posted by Mike McKinney at 3:06 PM | Permalink
Greg | January 17, 2008 3:40 PM link
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