RI lawmakers OK $11.8 billion revised budget, but harder task still ahead

Politics - Government

PROVIDENCE, R.I. (WPRI) — Rhode Island’s General Assembly on Thursday approved a significantly revised $11.8 billion state budget for the soon-to-close fiscal year, as legislators braced for the far bigger challenge of passing a new budget later in the summer.

House lawmakers voted 60-13 to approve the amended tax-and-spending plan for 2019-20, with five Democrats joining the chamber’s Republican caucus in opposition. The Senate followed suit on a 31-7 vote later Thursday night, sending the measure to Gov. Gina Raimondo’s desk for her signature.

“What we’re doing is the fiscally responsible, prudent thing to do,” said House Majority Leader Joe Shekarchi, D-Warwick.

The unprecedented circumstances — and deficits — caused by coronavirus have led to an unorthodox approach to the annual budget process. The governor and legislative leaders have all agreed to put off finalizing a 2020-21 budget until later in the summer in the hopes that Congress will provide significant additional money that can be used to fill a shortfall of over $600 million.

“When we have some more clarity on that, we will come back,” House Speaker Nicholas Mattiello said, suggesting lawmakers will return to Smith Hill sometime in July. Other bills are also expected to be considered in the summer session, he said.

“We’re working under very difficult circumstances,” Mattiello added.

In the meantime, Assembly leaders had to revamp the current budget before the fiscal year ends June 30. The final budget is roughly 20% larger than the original version thanks to a huge infusion of federal funding tied to the pandemic. Much of the increase is for unemployment benefits, including the federally funded $600-a-week temporary boost that Congress authorized in the CARES Act.

The revised 2019-20 budget also closes an estimated deficit of roughly $249 million. The shortfall was driven by a deep drop in revenue due to the economic downturn, as well as over $60 million in unanticipated costs at the Eleanor Slater Hospital psychiatric facility caused by a Medicaid billing issue there. The Raimondo administration is still struggling to resolve that problem.

Lawmakers withdrew $120 million from the state’s roughly $200 million “rainy day fund” to help close the budget gap, and also relied on “scoops” from the accounts of various state agencies.

On the spending side, one of the biggest changes in the budget is the addition of $50.6 million more in aid for public schools, funded out of the $1.25 billion in federal CARES Act Coronavirus Relief Fund that U.S. Sen. Jack Reed helped secure for Rhode Island.

That CARES Act money is being distributed under a federal formula that prioritizes districts with more low-income students, making Providence a big winner. The capital city will get 34% of the $50.6 million, whereas it only gets about 27% of the money distributed through the normal state K-12 funding formula. By contrast, Cranston will get only 5.5% of the CARES Act money, less than its 6.6% share under the state formula.

Much of the budget debate on the House floor focused less on specific spending items and more on the process, with a roughly $2 billion swing in spending clearing the General Assembly in little more than three days.

Critics on right and left assailed the compressed timing, but leadership-aligned House Democrats backed Speaker Mattiello, who contended that the usual seven-day waiting period for a budget between committee passage and floor passage doesn’t apply to a revised, or supplemental, budget bill.

“I thought there’d be more of a debate on this,” said state Rep. Brian Newberry, R-North Smithfield. “Maybe I shouldn’t be surprised.” Noting that most representatives had little input into the budget and little time to review it, he said, “If you vote green on this today, what are you doing here? What are you telling your constituents?”

“This process is a joke at this point,” agreed state Rep. Teresa Tanzi, D-Narragansett.

“What you’re saying is, you’re electing me to come here and play pretend,” said state Rep. Moira Walsh, D-Providence. She also said it “blows my mind” that the budget includes additional funding for a Rhode Island State Police barracks and the state prison at a time when the nation is seeing historic protests against abuses of power by law enforcement.

Supporters of the revised budget argued it was mostly a cleanup job to take account of the surge in federal funding and balance the books for the fiscal year that ends June 30.

“This money, ladies and gentlemen, has been spent,” Shekarchi said. “This money has been spent already. We are just fulfilling our constitutional obligation.”

“This budget was passed last year,” said Rep. Scott Slater, D-Providence. “We’re just trying to make it balance, and make sure that our citizens and everyone else gets the services that they need.” He called it arguably the “easiest” budget vote he’d taken since his election in 2009.

State Rep. Anastasia Williams, D-Providence, accused some colleagues of “political grandstanding.”

“Do I want to support the state police, who has completely, completely dismissed honorable men of color in the barracks, as well as applicants? No I don’t. They need to be purged, too,” she said. “Do I support giving money to prisons? Who do you think is going to fill those cells?”

Added state Rep. Charlene Lima, D-Cranston, “There’s no process that is perfect.”

The House did make two additional changes to the budget bill adopted Monday by the House Finance Committee, extending the sunset date for the historic tax credits program to June 2021 and authorizing Secretary of State Nellie Gorbea’s office to lease space in a building owned by Paolino Properties for the state archives. (House leaders said its current lease cannot be renewed.)

Ted Nesi (tnesi@wpri.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

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