Senate panel OKs $7.7B RI budget

PROVIDENCE, R.I. (WPRI/AP) - The Senate Finance Committee on Monday quickly passed a $7.7 billion state budget for 2011-12 that will raise the sales tax on a limited number of items, cut social safety-net spending and limit state workers' longevity payments.

The committee voted 10-1 to approve the tax-and-spending plan, which the House of Representatives already passed around 2 a.m. early Saturday. House members only changed about $100,000 worth of spending during their debate, a Senate aide said.

The finance committee made no changes to the House version. The full Senate will take up the budget on Wednesday, Senate spokesman Greg Pare said.

"This budget was certainly not easy," Senate Finance Chairman Dan DaPonte, D-East Providence, said at the start of the hearing. "The fight for resources in building this budget, and future budgets, will remain for quite some time." It "puts us on the right path to the serious structural reform that we need," he said.

The draft budget includes new taxes on non-prescription drugs, sightseeing tours, smartphone applications and videogame and software downloads. But its expansion of the sales tax is far less sweeping than what Gov. Lincoln Chafee proposed, which DaPonte called "bold" but too unpopular to pass.

It also would require some families on RIte Care, Rhode Island's Medicaid program for low-income residents, to pay higher monthly health insurance premiums.

The budget would also halt new school construction for three years and end automatic raises for state workers based on years of service.

The state faces an estimated $186 million deficit in the fiscal year which begins Friday.

If the budget passes both chambers, it will go to the desk of Governor Chafee, who can sign it, veto it, or let it become law without his signature.