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January 22, 2008

Carcieri's State of the State: The prepared version

Editor's note: The governor's office has just e-mailed the prepared remarks of Governor Carcieri's State of the State address. They are posted below. You may also watch the 7 p.m. speech live now on projo.com, courtesy of wpri.com.

2008 State of the State Address

Prepared for Delivery

Governor Donald L. Carcieri

Tuesday, January 22, 2008

Mr. Speaker, Mr. President, members of the General Assembly, my fellow General Officers, members of the Judiciary, First Lady, Sue Carcieri, distinguished guests, and my fellow Rhode Islanders.

In past years, I have come before you and described the progress made and challenges before our State in virtually every area: the economy and jobs, education, health care, energy, housing and homelessness, our infrastructure, and our environment. And I have done so in generally favorable and optimistic terms, because I am so positive about our State’s potential. And we continue today to make progress in all these areas:

We are on the cutting edge of renewable energy and are pursuing options vigorously;
We have made fundamental reforms in our educational standards and assessments, and are implementing a new Graduation Proficiency standard to ensure a Rhode Island high school diploma has real value;

We continue to grow jobs, (3,300 last year) as companies like Fidelity, Bank of America, Citizens, FM Global, Raytheon, and Electric Boat remain committed to Rhode Island;
We are advancing an innovative health care agenda, emphasizing wellness, personal responsibility, and the use of information technology to reduce costs.

I could continue, and spend the entire time tonight discussing all the good things that are underway. But, I am not going to do that. Because the State of our State is at a tipping point. It is teetering, ready to move dramatically in one direction or another. All of Rhode Island’s virtues, all of its assets, all of Rhode Island’s bright promises are overshadowed and, in fact, threatened by the budget crisis we face. It’s the 800 pound gorilla in the room.

Tonight, I am going to have a very frank discussion with all Rhode Islanders. We are facing the largest budget deficit since the credit union crisis in 1991. This huge deficit is imperiling all the progress we have made. We are staring at a combined $550 million deficit this year and next. It is time for action!!

I’m sure you’re saying, “How did it get this bad?” “How’s that possible?”

We didn’t get here overnight – it has been more than a decade in the making.

Our government has been spending beyond its means, and has been depleting its savings to pay the bills. It’s just like anyone of you out there tonight who has been spending beyond your income, using a credit card to support yourself, and then paying off the credit card by taking money from your savings account. When the savings account is empty, you have to stop the spending!

State government is no different, it has to reduce expenditures and live within its means! Well, there is one big difference! You can’t go to your employer and say, “By the way, I’m spending more than I can afford. I need a raise!”

The state, however, can go to its taxpayers and say, “I need more money from you,” and raise taxes! As your Governor, I am not going to do that!

Our citizens are already too highly taxed. When you combine the income tax, the sales tax, and property taxes, Rhode Islanders bear the 7th highest tax burden in the country! We cannot increase that burden! We should be lowering it!

The vast majority of hard-working, taxpaying citizens have had enough! They want us to stand up for them! They can barely pay their own rising expenses, let alone afford more demands from their state and local governments!

I see neighbors and friends – young and old, and in between – facing $3 a gallon gasoline prices, $3.40 a gallon for home heating oil ($800 to fill a tank!), rising food and utility prices, rising health care costs and increased mortgage payments – the last thing they need is rising taxes! The General Assembly and I have a job to do for them – cut the cost of government, all government.

Time has come for action. To solve this budget crisis we must deal with both the short-term problem, as well as create the basis for long-term fiscal health. The first task is to control spending to a level that is sustainable in the years ahead.

Therefore, I am proposing a budget for the remainder of this year, and all of next year that will reduce spending by $300 million. This will result in a fiscal ’09 budget that is less than the previous year; the first time since the credit union crisis.

All state employees, all state vendors, contractors and providers, and all municipalities will be affected. A reduction of this magnitude must reach across all of these. They are the three major areas of all state spending.

1) Personnel expenses that include: (wages, health care costs, and pensions);

2) Welfare, social service, and entitlement programs; and

3) Payments from the state to municipal governments for schools and other services.

The Supplemental Budget I submitted last week, and the Fiscal ’09 Budget I will be submitting next week propose reductions in all of these areas.

Regarding Personnel Costs, we are in the process of reducing the state workforce by 1,000 people, which means we will be organized differently and operate more efficiently. Today, every business – large and small, for-profit or not-for-profit – has to constantly re-engineer, and re-organize itself to become more competitive, and deliver its services at lower cost. The public sector – government – must do the same.

We must also bring the public employees compensation, fringe benefits, and work week back into line with the vast majority of private-sector employees who are also the majority of the taxpayers.

Currently, the average state employee earns $61,000 per year in salary with fringe benefits valued at another $34,000, (a total of $95,000) and a 35-hour work week. Bringing the health care, pension benefits and work week into line with the private sector could save the state tens of millions per year. This will be the focal point of our contract negotiation with labor leadership.

I have already proposed changes to the state’s overly generous retiree health plan. Mr. Speaker, I support your proposal to move toward a 401K pension plan and I look forward to working with you.

Additionally, to achieve the type of cost savings and efficiencies in the way the state does business, Rhode Island companies should be able to compete to deliver state services. The barriers to competition, such as the anti-privatization statute passed last session, must be taken down. I will work with the General Assembly to implement this reform.

The second major area of spending is welfare, social service, and entitlement programs. Unfortunately, our current social service system is badly broken – riddled with inefficiencies and difficult for the individuals and families it serves to navigate and understand.

Instead of providing our citizens in the greatest need with the support required to optimize their health and safety and gain or retain their independence, we instead have a system that perpetuates dependency and strips individuals of their ability to make reasoned and responsible choices about the quality of their lives.

To preserve a strong safety net for those in need, we intend to transform our welfare, human service, and entitlement programs.

By doing this, we will ensure that the safety net for needy children, our elderly, the poor, and people with disabilities is secure and sustainable.

Next week, I will propose a fundamental reform of the state’s system for providing health care to our most vulnerable citizens. This initiative, which I call my Consumer Choice Reform Plan will transform the state’s Medicaid program – the state/federal partnership that provides health care to the needy – from one centered on institutions and agencies to a system that focuses on the people who use it: our children, elderly, and those with disabilities.

One example of the kind of reform I am talking about is in the area of long-term care.

I know from experience that most seniors would prefer to stay in their homes, or be cared for by a loved one, rather than enter a nursing home. All the data shows that not only does it result in greater longevity and improved quality of life – in fact it is less costly.

Our long-term care system has been principally focused on nursing homes. In fact, we have one of the highest percentages of seniors in nursing homes when compared with other states. 5.2% of Rhode Island seniors are in nursing homes, more than twice the rate of leading states.

We will change that emphasis.

No longer will seniors be forced into nursing homes because they need help taking medicine or services that can be provided in their own homes. Our seniors deserve to live independently and with dignity.

Much like our Medicaid program, our Family Independence Program needs reform.

It has been ineffective at promoting self-sufficiency. Rhode Island has one of the poorest records in the country for getting people off welfare and into the workforce. As things stand now, 70% of families in the program have been on cash assistance for more than two years; 50% of those families have been on assistance for over 5 years, and 25% of those families have been receiving cash assistance for 10 years.

The system has encouraged long-term dependence, and provided generous supports. With the new budget, we will introduce Rhode Island’s Work First Program. This program is designed to accelerate movement out of poverty.

It will require an immediate Employment Plan for all participants, and will provide support for a maximum of 2 years. Families in need deserve better than continued dependence on the state. Work First will achieve the real purpose of our programs: strong families who have the spirit and means to pursue their dreams.

The other major category of state expenditure that requires comprehensive reform is direct aid to our cities and towns. Last year, the state provided $1.1 billion in municipal assistance, and almost $900 million of that was for schools.

We need our cities and towns to undertake the same kinds of personnel, health care, and pension reforms that state government is advancing. To assist in that effort, I am proposing legislation that will remove the designation of any specific health care provider from all local contracts. It will allow one, umbrella health care contract that would include all state, municipal, and school employees.

This will save tens of millions of dollars for property taxpayers by creating competitive bidding by the health insurers. Using this approach, the state will achieve over $41 million in savings over the life of the contract.

In addition, we need for our cities and towns to look aggressively at consolidating services and reducing overhead cost. Rhode Island municipal cost for fire protection is 1st in the nation, and its cost for police protection is 10th. Property taxpayers cannot afford the status quo any longer. Municipalities need to look at ways to share these services, and save money.

The major area of spending for cities and towns is our public school system. Rhode Island spending per pupil is the 9th highest in the nation. As a result of these high rates of spending -- 1st, 10th and 9th -- Rhode Island’s property tax burden is the 5th highest in the nation.

I have asked RIPEC to undertake a comprehensive review of the cost of our existing school system.

In Rhode Island, we have 36 school departments overseeing 150,000 students – the County of Fairfax, Virginia, with the same student population has 1! I have asked RIPEC to evaluate various options, and to project the statewide savings to the taxpayers. This will provide the data we need for real action.

My message tonight to all municipal officials is that this deficit is not just a state-government problem – it’s a state-wide problem!!

If we are successful in reducing spending at all levels of government, we will be able to make plans for the future that will put Rhode Island in a position to prosper.

This crisis presents us with an unprecedented opportunity to make fundamental and lasting change that will quicken the transformation of Rhode Island from a ship today taking on water, to a world-class vessel.

I am very well aware that there are many inside and outside state government who are invested in keeping things the way they are. That is not an option, it is not sustainable.

We need discipline in spending and reforms in all of those areas I have mentioned: Personnel, Social Services, and Local Aid. If any one of them would be exempt from this plan, the others would bear a greater burden.

Everyone must be part of this plan. All the vested interests need to put aside their self interest and act in the best interest of all Rhode Islanders.

I understand all the advocates who represent their constituencies; I understand the pressure that builds within these four walls, and the relentless effort to solicit legislative members to specific agendas; I understand the false characterizations when you have to say, “No.”

But I also understand that the vast majority of hard-working, tax-paying citizens have had enough, and many of them have voted with their feet, and left. They want someone to stand up for them!

Tonight, I ask the General Assembly, the public employee union leadership, and all municipal officials to work together with my administration to find ways to implement these changes.

They will transform our state and secure an exciting future for our children. In the world of politics, we may be Republicans, Democrats, or Independents – but we are all Rhode Islanders, and we’re here because we love our state. To fix this problem, it will take all of us in this room working together.

If we are not willing to make the hard choices, then the tipping point will lean to the side of disaster, and we will have failed the people who sent us to serve them.

Let me take a few moments to talk directly to every Rhode Islander who is watching this address on television, listening on the radio or reading about this in the morning newspaper. Most of you only want to know one thing: “What does this plan mean for me and my family?”

The answer is --- No tax increases! If this plan is implemented, your taxes won’t go up.

But you should also know this. This plan faces many obstacles. Everyone with something to lose will lobby this Assembly furiously against these spending reductions. If they succeed, this plan will falter and your taxes will go up.

We are a small state at a vulnerable point, and our nation is entering a very unsettled time!

So, tonight, I call on you – the hardworking Rhode Islander; the average citizen anxious about your own rising costs and the nation’s economic outlook – to make your voice heard.

Your voice must be just as loud as the powerbrokers and special interests that regularly patrol these halls. If you want change, you must be a part of it!

In closing, last month, you may recall that I took a trip to the other side of the world. I visited our troops in Iraq, Kuwait and Afghanistan. It was an eventful trip and not just because of what happened back here in Rhode Island!

It was a remarkable trip because of what I witnessed in those countries. Our National Guard, and active military, our friends and neighbors, our family members, our fellow Rhode Islanders were standing at the front line for us.

I went to bring them our best wishes and support. I came back with a renewed awe for what ordinary people are willing to do.

These men and women are interrupting their lives, forgoing irreplaceable time with their children and loved ones, setting aside careers and personal goals, in effect suspending their lives and the lives of their families. In 20 cases, they made the ultimate sacrifice and gave their lives, all for us, so that we can live in security and freedom. What courage and commitment!

That is an immeasurable sacrifice for the greater good. We owe them more than we can ever repay.

Let us take a moment to thank them in the person of Major Michael Manning, First Sgt. Lynda Aul, and Senior Airman Chris Coleman. Major Manning has served for two deployments in Iraq and received the Bronze Star.

First Sgt. Aul, also a recipient of the Bronze Star returned home to Cranston in September from Iraq. Senior Airman Chris Coleman chose to serve extended duty in Iraq. We thank you and all the men and women you represent.

We also want to recognize their families and all the Rhode Island families like them who are making sacrifices.

First Sgt. Aul’s mom, Pat Nordquist is here; Senior Airman Coleman’s mother is here, Nancy Wasilewski; and Major Manning’s wife, Meg, who soldiered on at home with their three children, is here as well. Please stand.

Making the hard choices for the greater good. Being willing to commit to something bigger than ourselves. That is what we are being called to do tonight and in the coming months.

With just a fraction of our soldiers’ spirit we can summon the courage and wisdom to do the right thing, we can stand up for the future of our state, we can ride the winds of change to a bright future for us all.

May God strengthen us in this task.

Posted by Andrea Panciera at 7:11 PM | Permalink

Comments

God bless you, Governor Carcieri. May you and your administration move those immovable blocks of opposition in the legislature and special interest groups to get our state solvent in the near future. It truly is SOS (Save Our State) time. May you have the tireless energy and fortitude to get things right for all taxpaying citizens.

Posted by: Robert E. Moran at January 22, 2008 8:08 PM

Sacrifice? Everyone? NO !!! Wealthy had their taxes reducded by the worst President we have ever had in the country.

The Governor who supports President Bush also lowered the tax for the 2,000 most wealthy folks in the state.

The Governor lowered the taxes on those folks who drive around in $80,000 Humvees that get 7 miles per gallon. These cars polute and make us Geo-Politically dependent upon foreign oil.....which endangers the lives of those fine men and women that the Governors Oil Baron Buddy has sent to war.

And as these patriots return from battle to work in state, municipal and teaching jobs...the Governor want then to be responsible for the burden.

One year from today Bush will be out of office....PLEASE take Don with you

Posted by: Paul at January 22, 2008 9:54 PM

I agree with the governor regarding changing those contracts. My brother works for a town and says he could cut his staff in half and do the same work. He would never do it though because of the stupid bump. He would do it if he could pick the right workers to get the job done, but he can't because of the seniority bump rules. The governor should also pass a law to remove and seniority clause when there are lay offs. Watch how fast cities and towns could reduce staff but not services to its taxpayers.

Posted by: Mitch at January 22, 2008 10:01 PM

Just like organized crime members are loyal to the "family", the democrats in this state are loyal to the party, period. The Governor asks for all republicans, democrats and independents to come together and work this stuff out. You think John Gotti would have worked with the FBI?

Posted by: Dave from Ashaway at January 23, 2008 1:33 AM

but he stil hasnt done things right why not cut more from state workers they are over paid and i have seen so many of them use cars that have plates that say offical use only and been a family inside up in N.H. shopping take these cars away.If you touch my medicaid because im legally disabled i will sue then move out of this state.medicaid now doesnt always pay my bills i can prove that by a recent operation i have the $5,089 medicaid owes right here now i get a lawyer and sue.

Posted by: bill at January 23, 2008 5:23 AM

The Governor wants to bring public employees’ workweeks and compensation packages “back in line with the vast majority of private-sector employees". That's fine but then the state workers' (public employees) salary should also match the private sector which it does not, about 25 percent average difference - quite high. The Governor neglects to discuss this point. Another point the Governor does not mention - state worker's contribute almost 10 percent of their salary to their pension and other state workers are not in the regular state pension. They are in a 401k type pension already in-line with the private sector. One more point - what about non-classified, non-union state workers who have very high salaries and are usually appointed or hired by each new Governor and staff that comes into office. We need less of these and more regulated state workers classified and/or in a union where the salaries are low and kept in balance. And what about high paid consultants? More spin by the Governor.

Posted by: KJ at January 23, 2008 8:46 AM

Are there any State jobs that pay minimum wage?
If not, why not? The majority of created jobs in Rhode Island in the past five years in the "private sector" are those that pay minimum wage. If the Governor wants comparisons of State and private jobs, then get rid of the deadwood, and then hire people desperate enough to work for $7.50 an hour like so many citizens here already do. Oh, they don't get any benefits either.

Posted by: BW at January 23, 2008 10:30 AM

People give me a break. First I am an R.N. for the state of R.I. Hospital.I see and hear what the staff makes per year and if you think that these people make 95,000 per year you are a fool and you are the ones corrupt. the average worker ,certified nursing assistance,kitchen,laundry,housekeeping etc. make on average of 45,000 per year..Yes I make more but I hold a professional license . I am not some hobo off the street I deserve to get paid for my knowledge and work like any R.N. in the public and private sector.You are being smoked screened from your governor people. The conditions of the facility is also way out dated. I wonder how we can even manage to give the great care that we do. If you do not believe me go and visit one of the state Hospitals and compare it to the the other area hospitals. I am all for crushing the corruption that has plagued this state. I believe though, you can not say my way or no way because it will be no way. You need to ask yourself if this was going on and getting worse than where was Cacierri on his first term why wait for your second term . Consolidate departments (health care, educational , state offices, D.M.V., welfare) stream line upper management and work force . Update infrastucture and get it out of the stone ages. That is where you start and that is what will move this state forward and decrease the amount of corruption and increase stability for the future. Please all of Rhode Island get your head out of the smoke and you will find cleaner air to breath.

Posted by: eric jacquart at January 23, 2008 10:40 AM

Good for Governor Carcieri! I am not as positive the Gov, I think RI is way past the tipping point and well down the road into deep trouble. How did we get here? Bloated budgets, generous union contracts, and a bloated entitlement system.
The pedulum has swung and state and local employees are now better compensated than the average private sector employees. It is time that state employees start losing some of their holidays, start working 40 hr weeks, end the defined benefit retirement and life time medical benefits. It is a sad point in our culture, but the post WW2 economic bubble is over. There is no mfg in RI to speak of, private sector employees have seen their real compensation packages significantly reduced, if they still have their jobs at all. It is well past time for the state to tighten it's belt and react to the reality of the situation.

Posted by: scott at January 23, 2008 11:12 AM

The Governor seems to be standing alone in his efforts to cut the budget. The Legislature has done nothing of consequence as far as making the tough choices. I'm betting that they will veto every one of Gov. Carcieri's proposals, raise the sales tax, then, and here's the icing on the cake, they'll blame him for our failed State. Show of hands here - how many would get out of RI if there were any way possible?

Posted by: Lauren at January 23, 2008 12:37 PM

Thank You to the Governor and his staff for making our military part of his speech and thanking those that served. My sister is Lynda Aul and for the 16months she was gone and my step father Paul Nordquist , at the same time,our families lives stood still and our country has forgotten their soldiers,except if you have a family member serving. All the gripping comments I just read made me happy to be an American, because of my sister-my hero- and the others, you can give your opinion and say how you feel....what a country ! Please don't let all the party affiliations get in the way, just back our Gov and let's get Rhode Island back in shape. I may not agree with everything he says nor the President but out of respect for our military and the job they do...shut up and help !

Posted by: Lisa Aul Bedard at January 23, 2008 2:31 PM

Excuse me, but I am a state worker (non-classified) who works with a contract. I only make 42,000 per year and am considered middle management. The AVERAGE salary of classified and non-classified workers at CCRI is around $40,000. People love to crush the state workers, but most of us work very hard and do the work of 4 people.
At CCRI, before our new president was hired, we were almost one million dollars in the red. He started by not hiring replacements for the three vice-presidents that were retired or were retiring. That in and of itself saved over $300,000. Other Administrators were not hired until absolutely necessary which put an enormous burden on Mr. DiPasquale.
We are now working in the black. It is our president you got us there by freezing hiring on ADMINISTRATORS, not union staff.
I know that the colleges under the Board of Governors are pretty much self maintained. Their monies come from grants and tuition. We are already working on a shoestring budget and to take any more would be a great burden on the students of this state.

Posted by: DL at January 23, 2008 4:14 PM

can't understand why all these reductions have to come off the backs of state employees. there are many state employees who earn those pay checks and there are others who do nothing but still get paid. Every job should be reviewed, union and non union, if its not needed or you can reduce the workforce, because that office can run efficiently without those extra people, let them go. We should not be afriad to cut jobs because the union will be upset. We are trying to work toward a better Rhode Island. We should look at some of these people earning these high salaries. Are they really earning them? Could there salaries be reduced. or even just get rid of some them. How many agencies have multiple personnel earning high salaries, that aren't needed?.
People need to be held acountable for their actions. I am a single mom, unfortunate for my child, but my child is still loved and well taken care off. I don't get benefits from the state. No help with child care, medical, cash or food assistance. I am surviving, paying rent, child care that costs almost $200.00 per week, school loans, car insurance, groceries. I am barely making $30,000 /year. I know people that get all these benefits from the state and stay home and do nothing. That's is very unfortunate. I hate to say it, but we need to make these custodial parents accountable for theire actions, not just the non-custodial parents. Give these people a time limit, they can get up and go to work, just like I can. And when they get that job they should pay some of that money back to the state of RI. It's called a helping hand, not a handout. There are too many people that need the help and are not getting it, because they make too much. too much can be a dollar. Give help to those who deserve it.

Posted by: single mom at January 23, 2008 4:28 PM

I think Carcieri needs to learn how to manage a state and its residents, seems to me since he came in office he ruined this state's budget, his decisions are really poor and of course he is selfish and is very arrogant to the public. This seems to be the only state that has more issues compared to the surroundings. Since Carcieri couldn't manage his state efficiently and drove the state budget into the dumps, I firmly believe he should be responsible to fix it out of his own dirty rich personal money. All the propoganda about high paid state workers was displayed all over the news papers and nothing was ever done to fix that. There are many of the Rhode Islanders that suffer and work their lives off to meets ends and then there are money sucking greedy administrators working at the state offices pulling in the 6 digits and driving nice cars laughing at the hard workers!!!! when will this change. Time for a new governer or a lesson to be taught to Carcieri and his staff.

Posted by: concerned resident of RI at April 2, 2008 12:24 PM

January 22, 2008

Carcieri's State of the State: The prepared version

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