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1. State House veterans know session’s end is where predictions go to die, but right now the hope in both General Assembly chambers is that a final budget bill will make its grand entrance sometime next week. (Specifically, House spokesman Larry Berman says, they’re hoping for “later next week.”) The state of play is well known: Governor Raimondo submitted a $9.3-billion budget plan in January, but overspending and weak tax revenue has put a $134 million hole in it, and Speaker Mattiello’s car tax phaseout ups that shortfall to about $160 million. So the first question is obvious – how do legislative leaders propose to close that gap? A car tax cut is a lock – the only question is whether the original Mattiello proposal gets tweaked. Social services will be hard to cut, despite making up roughly 40% of the budget – rank-and-file Democrats are pushing to restore money there, not reduce it further. Even House Finance Republican Ken Mendonca said on Newsmakers, “We have an expansion there with UHIP and trying to resolve some of those problems, so clearly that’s not the area that we should try to cut away from.” (He suggested reducing the number of employees in the executive branch, particularly higher-paid ones.) The governor’s Commerce RI programs are said to be in the crosshairs; as Senate Finance Democrat Lou DiPalma noted on the show, the tax breaks offered by the agency don’t necessarily need to be funded up front, making them an easy target. Then there’s free tuition – there’s still a chance a revised, slimmed-down version of the proposal makes it into the budget, but prospects for that may depend on how hard the Senate is willing to push for it in negotiations with the House. Suffice to say fiscal advisers Sharon Ferland and Steve Whitney won’t be getting a lot of rest the next few days.
2. Rhode Island apparently has plenty of company in its budget challenges. “For the first time since the end of the Great Recession, a significant number of states find themselves facing budget shortfalls,” the National Conference of State Legislatures reported Friday. The report notes Massachusetts and Connecticut are among those on the list. “Generally, the Massachusetts economy is performing well when looking at markers like the unemployment rate and business confidence. Despite these indicators, revenue collections have underperformed,” the report says. Connecticut’s diagnosis: “Rapid growth in fixed costs (primarily debt and retirement-related expenses) coupled with historically slow revenue growth.”
3. A rather, um, unusual story about a House Finance hearing.
4. Whatever happens to free tuition in the final budget bill, nobody can say the Democratic Governors Association didn’t try to help. The DGA-affiliated nonprofit America Works USA has booked another $62,000 of local TV ads to support the plan (and Governor Raimondo’s advocacy for it) through Monday, bringing the total buy to nearly $300,000 since mid-March. That’s on top of tens of thousands more spent with cable and online outlets.
5. One policy that’s come up repeatedly during the debate over the car tax has been Rhode Island’s education funding formula. The state was famously the last in the nation to create a K-12 formula when the law was enacted in 2010, and over the subsequent six years it boosted state aid to local schools by $165 million, according to the Senate Fiscal Office. If you remove that increase, Rhode Island wouldn’t have a budget shortfall at all this year – not something anyone has proposed, to my knowledge, but just an example of where increases in state spending have been going in recent years.
6. Whether due to loyalty or power, former Rep. Frank Montanaro Jr. has built up plenty of support in the General Assembly. That became clear after our report this week that Montanaro had accepted $50,000 in free tuition by being on leave from RIC during his three years working as Speaker Mattiello’s director of JCLS, which manages the Assembly budget. Not one lawmaker, Democrat or Republican, has backed GOP Chairman Brandon Bell in his call for Montanaro to repay the tuition money, and Democratic Rep. Jared Nunes was the only one who proactively criticized the arrangement. (Among non-legislators, the reaction seemed heavily negative.) Lawmakers who’ve commented have generally said Montanaro appears to have been allowed to take the tuition money under his union contract, making it a policy question for RIC rather than him. That’s not necessarily the view off Smith Hill, though. “There is a massive, bipartisan legislative failure to express outrage regarding the Frank Montanaro tuition scam,” argued former GOP gubernatorial candidate Ken Block. He added: “RI will never emerge from our economic and psychological funk while such blatantly abusive things are allowed to happen without comment.” And Democrat Nicholas Delmenico, a progressive who challenged House Oversight Chairwoman Pat Serpa in last year’s primary, urged her committee to call a hearing on the disclosure.
7. Speaking of JCLS, Speaker Mattiello’s office says there’s more than meets the eye to the legislature’s official request for a $44 million budget next year. Mattiello spokesman Larry Berman notes the legislature and the judiciary are allowed to “carry over” unspent funds from year to year (officially known as “reappropriations”) but that doesn’t mean they spend anywhere near the maximum. So in the 2015-16 budget year, for example, the Assembly was authorized to spend $44.1 million but only actually spent $37.7 million, leaving a bit more than $6 million to carry over into this year. (The carryover expires after one year – they can’t keep building up a big bank account from multiple fiscal years’ surpluses.) Also, the Assembly voted to put $1.3 million of its carryover into the General Fund to help balance the budget, so only about $5 million was actually carried over. Confused yet? Basically, the carryover law gives the Assembly a higher ceiling for its annual spending than it usually uses. So the legislature’s actual spending only rose by about $1.5 million in 2015-16, from $36.2 million to $37.7 million – and even though its revised budget for the current year is listed at $47.6 million, Berman says spending won’t come in nearly as high. That said, even $37.7 million is double what the New Hampshire legislature spends, as Jim Hummel noted in a report this week.
8. A key issue to watch in the waning days of the Assembly session – mandatory paid sick days. Speaker Mattiello has signaled he’s open to bringing a bill to the House floor if a compromise is reached between supporters, led by Rep. Aaron Regunberg and Sen. Maryellen Goodwin, and opponents, led by the Greater Providence Chamber of Commerce. Both camps are suggesting a deal is possible. Regunberg and Goodwin signaled their thinking in a Journal op-ed, outlining “a number of changes to our initial legislation” they see as reasonable. Chamber lobbyist Elizabeth Suever reports that productive conversations are continuing. “We remain concerned that adopting a paid sick leave law in Rhode Island will make our state the only state besides California with both TDI, TCI and paid sick leave,” she said in an email, “but we believe that the bill can be amended to protect those businesses already providing the benefit as well as those businesses with less than 50 employees that are too small to be able to afford the administrative expense.”
9. Another bill to watch – this late-breaking revamp of the 1997 Hospital Conversions Act, in the midst of a wave of local hospital mergers. The Senate Health & Human Services Committee has scheduled a vote on the bill for Tuesday, and the House Corporations Committee will hold a hearing about it the same day.
10. Pawtucket Mayor Don Grebien is optimistic a revised PawSox bill will appear in the Senate before the Assembly finishes its current session. He also has an interesting take on what’s really going on with the stadium proposal, telling Kim Kalunian this week, “I think this is at a different level between the governor and the speaker, and I don’t want Pawtucket to be hurt by that.” So is a bill on the way? Bill Conley, who represents Pawtucket and chairs the Senate Finance Committee, didn’t return a phone call about that on Friday.
11. Tim White on what to expect when Ray Gallison is sentenced Friday.
12. Our weekly dispatch from WPRI.com’s Dan McGowan: “For all the chaotic infighting we’ve seen from the City Council in the month following the indictment of Luis Aponte, there is one issue that has remained largely on track: the city budget. The City Council Finance Committee has scheduled its mandatory public hearing on the $734-million tax-and-spending plan for Monday evening, and it’s likely the committee will approve it later that night. If the full council wants to move quickly, the whole budget could be wrapped up and on Mayor Elorza’s desk by Friday night. So why have things moved so smoothly? A big part of it is Elorza’s initial proposal was about as straightforward as a city budget in Providence gets these days. No tax increases. No new ticky-tack revenue generators like more parking meters. And a built-in surplus that will thrill both the auditor general’s office and ratings agencies if it’s achieved. But given the downfall of Aponte, the budget could still have easily devolved into a political standoff. To their credit, members of the Finance Committee – led by Chairman John Igliozzi – didn’t let that happen. The panel met for two-and-half hours on the night of Aponte’s indictment and continued to vet the budget in the weeks that followed. As the council approaches the goal line, you can bet there will be some minor changes. There has been some talk about potentially reducing the city’s non-owner-occupied tax rate, which landlords are always pushing. It seems likely the council will also attempt to reform the way the city charges interest on late taxes, which is a major pet peeve for any resident who misses a quarterly payment deadline. But unless something dramatic happens over the weekend, it’s a good bet the council will complete the budget process next week.”
13. Dan McGowan also has a great primer on how Rhode Island plans to implement the new federal law on K-12 education.
14. Governor Raimondo will be spending part of next Friday in Connecticut for a policy retreat organized by the Democratic Governors Association, a spokesman confirms.
15. Will Joe Trillo go for it? The former Republican rep is seriously flirting with a GOP gubernatorial bid in 2018, and will hold an event later this month to discuss his vision for the state. Cranston Mayor Allan Fung has been generally treated as the once and future Republican nominee, but Trillo would be a credible candidate, too. As he noted in a statement this week, he was the first local Republican to jump on board the Trump train in 2015, and became synonymous with the president’s campaign before last year’s election. (That could be a double-edged sword in a general election for governor, considering Trump’s current troubles, but it may be helpful in a primary if the president’s approval rating stays strong among Republicans.) Trillo is blunt and unafraid of controversy, which as Trump proved is a surefire way to get lots of media attention. And he’s got the personal resources and connections to finance a campaign.
16. A Gina Raimondo–Lincoln Chafee primary would be quite something, too. (Also, a notable assertion from Chafee in his RIPR interview: “I think Russia did not interfere with our elections.”)
17. Seven candidates have filed papers to run for Teresa Paiva Weed’s vacant Newport Senate seat (District 13) in the Aug. 22 special election, according to the secretary of state’s office – four Democrats (David Allard, David Hanos Jr., John Florez and Dawn Euer), one Republican (Michael Smith), one independent (Kimberly Ripoli) and one Green (Gregory Larson). They now have to collect enough signatures to get on the ballot. Some endorsements have already come in on the Democratic side – Hanos received endorsements this week from Paiva Weed and the Democratic Senatorial District Committee, while Euer has the backing of Clean Water Action, the Sierra Club, and RI NOW. If you want to get to know the candidates, yours truly will join Ian Donnis and Frank Prosnitz in questioning them at a July 10 What’sUpNewp forum.
18. Congressman Cicilline did battle with Tucker Carlson on Fox News again.
19. Susan Campbell explains how the DMV is handling its big computer changeover.
20. College grads have until June 23 to apply for Commerce RI’s student loan money.
21. On the 73rd anniversary of D-Day, some amazing photos of the battle – in color.
22. Set your DVRs: This week on Newsmakers – state Sen. Lou DiPalma, D-Middletown, and state Rep. Ken Mendonca, R-Portsmouth. This week on Executive Suite – Torey Malatia, general manager, Rhode Island Public Radio; Greg Cunningham, program director for clean energy and climate change, Conservation Law Foundation. Watch Saturday at 10:30 p.m. or Sunday at 8 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Catch both shows back-to-back on your radio Sundays at 6 p.m. on WPRO-AM 630 and WEAN-FM 99.7. And you can subscribe to both shows as iTunes podcasts – click here for Executive Suite and click here for Newsmakers. See you back here next Saturday morning.Ted Nesi (email@example.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram
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