PROVIDENCE, R.I. (WPRI) – Rhode Island lawmakers late Friday unveiled a $9.6-billion proposed state budget for the 2018-19 fiscal year that asks voters to borrow $250 million for school repairs but rejects a proposed expansion of medical marijuana.
The budget bill – released around 11 p.m. – revises the tax-and-spending plan put forward in January by Democratic Gov. Gina Raimondo. It was hammered out after months of public hearings and private negotiations, with the final compromises made easier by an uptick in tax revenue.
House Speaker Nicholas Mattiello, D-Cranston, told reporters he is “very proud” of the final document.
“We worked very hard to live within our means and avoid increasing the burdens on taxpayers, while investing in jobs and education, and helping people on Medicaid, seniors and the developmentally disabled,” he said. “It’s a realistic, responsible budget.”
While House leaders had hoped to bring forward their budget as early as 5:30 p.m., talks between the House, Senate and governor’s office stretched on hours past that point. Among the final sticking points: the terms of legalized sports gambling and funding for the Real Jobs RI training program.
The House Finance Committee approved the budget bill on a 15-3 vote about 40 minutes after its release and shortly before midnight, setting up a debate and vote by the full House next Friday. Three Republicans – Patricia Morgan, Anthony Giarrusso and Robert Quattrocchi – voted against the plan. The other Republican on the committee, Ken Mendonça, joined all the panel’s Democrats in supporting it.
Giarrusso, R-East Greenwich, held up a pile of freshly-printed budget documents and asked, “How many pounds is this? And in 40 minutes.”
He continued, “I was disheartened by the fact that we added about a quarter-billion dollars more than what the governor asked. If we had that kind of extra money, it should have been allocated in a different way.”
Raimondo had no luck convincing lawmakers on two ideas that involve smoking: their budget plan leaves out her proposed expansion of medical-marijuana dispensaries – she wanted 15, up from three – as well as her proposed 25-cent increase in the cigarette tax. But they did include some changes on medical marijuana, including boosting the annual licensing fee from $5,000 to $250,000 and allowing Massachusetts and Connecticut cardholders to buy in Rhode Island.
Asked why the House declined to support adding more dispensaries, also known as compassion centers, Mattiello said he remains concerned Rhode Island lacks a “comprehensive” plan for regulating pot.
Legislative leaders did give their support to the governor’s highest-profile initiative this year: a $250-million bond to repair school buildings, which she and General Treasurer Seth Magaziner have spent months lobbying for. Voters will be asked to authorize the bond in November. The revised proposal includes some “more stringent” requirements for municipalities to obtain funding, Mattiello said.
An additional $22 million in regular state aid will also be sent to local school districts.
On sports betting – which the U.S. Supreme Court cleared the way for in a recent ruling – lawmakers agreed with Raimondo’s plan to have it up and running at Twin River’s two casinos by Oct. 1, with a goal of $23.5 million in revenue. Mattiello made clear the details are not settled, though he expressed hope that negotiations with the vendor – Providence-based IGT – could be resolved by next week’s floor debate. He said the General Assembly will get a final say on terms of the contract.
“I expect over the next week that there will be a lot of negotiation, and hopefully we can vet the details of a final product, so that a week from now we can amend the budget and put the specifics in there,” Mattiello said of the IGT contract. He also said Rhode Island will not pay a so-called “integrity fee” to the MLB, NFL and other pro sports leagues, which have been lobbying for a cut.
Mattiello said lawmakers significantly increased funding for social services compared with the governor’s proposal, including a roughly $18 million boost for individuals with developmental disabilities. Money was also added for home-care workers, hospitals, and nursing homes, and the House killed the governor’s proposal to add co-pays for Medicaid enrollees.
However, the speaker said language is included in the bill to ensure the nursing homes will not get “a windfall” even if they win the much-discussed lawsuit over their rates. (The state is still trying to win that case, despite a lawyer’s failure to appeal it on time.) The head of LeadingAge RI, which represents some of the state’s nursing homes, argued in a statement Saturday that the plan “will have immediate and devastating consequences for nursing homes and their residents.”
As expected, the next installment of Mattiello’s six-year phaseout of the car tax is included, which should mean a further reduction in many drivers’ bills in the coming fiscal year. The sales tax will be extended to cover armored cars and software-as-a-service products, as Raimondo proposed.
Mattiello said lawmakers removed nearly all of the so-called “scoops” – transfers from the reserves of quasi-public agencies like Rhode Island Housing and the R.I. Resource Recovery Corp. – proposed by Raimondo to balance the budget, with the exception of $4 million from the Rhode Island Infrastructure Bank.
On economic development, lawmakers kept funding for most of Raimondo’s R.I. Commerce Corporation incentive programs, though they declined to authorize new ones she suggested in her budget. They also kept the popular Real Jobs RI training program, but plan to restructure its funding stream.
There is nothing in the budget on the PawSox stadium plan, according to Mattiello. The team has yet to weigh in on the revised ballpark proposal the speaker released last week.
The E-911 fee is being renamed, which a Mattiello aide said is to better reflect how the money it generates is used, following controversy in recent months over how much of the revenue goes to uses other than 911. An additional $1 million will be added to the E-911 fund to hire staff and assist municipalities.
The budget includes Raimondo’s proposal to let foster children keep receiving state services until they turn 21, increases foster rates, and authorizes young people to stay in DCYF care until age 21.
The new fiscal year begins July 1.
There was no immediate word on how the final budget agreement would impact Rhode Island’s structural deficit – the state’s perennial gap between revenue and expenses – down the line. Raimondo’s aides estimated her original proposal would have lowered the 2020-21 deficit from $333 million to $193 million.
Ted Nesi (email@example.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook