Governor warned of likely shortfalls in brand-new RI state budget

Eyewitness News Investigates

PROVIDENCE, R.I. (WPRI) – Barely two weeks after Gov. Gina Raimondo signed the new state budget into law, one of her top aides is already warning about “items of concern” that are likely to put the $9.2-billion tax-and-spending plan in the red.

In a memo sent to Raimondo last Thursday, Office of Management and Budget Director Jonathan Womer said lower-than-projected revenue and higher-than-budgeted spending would likely force the administration to find even larger cuts than the $25 million in unidentified savings already called for in the document.

“No administration has been required to address a goal of this magnitude since 2010, when the state was coping with the aftermath of the Great Recession,” Womer wrote in the memo. (Significantly larger deficits have been projected before the start of the fiscal year, however.) The governor may need to propose midyear changes to the budget in January, he said.

Asked why the governor signed the budget into law if her aides were so concerned about its contents, Raimondo spokesman Mike Raia said in an email, “No budget is perfect.” He cited measures it includes that the administration supports, such as spending on education and job training, funding to deal with opioid abuse, and an increase in the minimum wage.

“The delayed enactment of the budget and savings targets that may not be fully realized will require tough choices in other parts of state government,” Raia said. “The administration will continue to work to reduce spending and make government more efficient while protecting investments that have strengthened Rhode Island’s economy.”

House Finance Committee Chairman Marvin Abney, whose panel leads the drafting of the budget, described the $25 million in unspecified savings as “a reasonable management tool that requires skillful decision-making.” He suggested the administration should look at “staffing, consultants and other operational spending priorities.”

On the spending side, Womer said the General Assembly’s budget ordered “several reductions that will be either nearly impossible or legally impermissible for agencies to achieve,” citing cost shifts proposed in four departments that provide social services.

Specifically, Womer said it was “not possible” for the Department of Behavioral Healthcare, Development Disabilities and Hospitals to make up $3.2 million in funding cuts by sending more bills to third parties; “doubtful” that the Department of Children, Youth and Families can save $4 million through additional Medicaid claims; “not sustainable” for the Department of Health to collect $500,000 more from the federal government for indirect costs; and not possible to cover more child care costs through the federal welfare block grant.

“We will make every effort to stay within the appropriations limits set by the General Assembly,” Womer wrote. “However, the nature of the above-referenced BHDDH, DCYF, DOH and DHS programs – many of which serve Rhode Island’s most vulnerable populations – make it difficult to change spending quickly without violating federal mandates or state law.”

Abney, D-Newport, downplayed Womer’s concerns.

“Some of the savings issues highlighted in the memo are examples of where I believe the administration can, and will, put renewed emphasis on monetary policies which ensure that taxpayer money is the last dollar used when services are provided,” he said in a statement.

On the revenue side, Womer said the month-long standoff between House and Senate leaders that delayed the budget’s passage is likely to reduce tax revenue by about $2.5 million, which is about 0.07% of the nearly $3.8 billion in state general revenue expected to be collected in the 12 months ending June 30.Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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