RI on track to run $4.1M deficit this year

Politics - Government

PROVIDENCE, R.I. (WPRI) — Rhode Island’s state budget is starting out in the red for the third year in a row.

In a report issued Friday, state budget officer Tom Mullaney said the state is on track to finish its 2019-20 fiscal year with a deficit of $4.1 million when the books close next June. The projection is based on actual spending from July through September plus newly updated forecasts for revenue and social services.

The budget gap is being driven by excess spending at state agencies, which are on pace to spend about $21 million more than lawmakers authorized in the budget passed earlier this year. The main culprit is a $22 million projected deficit at the Department of Children, Youth and Families, as well as a nearly $3 million deficit in the Office of Veterans’ Services.

Offsetting much of the overspending at DCYF and the veterans’ office, however, was the fact that last fiscal year’s surplus came in $3.7 million higher than expected as well as a $12.5 million reduction in this fiscal year’s projected caseloads for social services such as Medicaid.

On the other side of the ledger, tax revenue is expected to come in on target this fiscal year, according to new estimates released last week.

This is the third straight year that Rhode Island has been facing a current-year deficit in November, though the current $4 million figure is considerably lower than the $42 million shortfall projected a year ago at this time.

Still, the red ink won’t help Democratic Gov. Gina Raimondo balance her proposed 2020-21 budget, which is due to the General Assembly by mid-January. (Lawmakers usually take until June to approve a final budget.)

During a taping of WPRI 12’s Newsmakers on Friday, Raimondo confirmed she expects she will need to find a way to plug a gap of close to $200 million in her final budget proposal. She described that as “one of the bigger deficits that I’ve had to close” since becoming governor in 2015.

“There’ll be a lot of tough choices,” she said. “There’s no easy way to close a $200 million hole. I don’t want to cut eligibility for health care or Medicaid. I don’t want to turn the clock back in terms of job training or education or pre-K. And so there may have to be a component of some kind of increased fees.” She added that she has “really held the line” on broad-based taxes.

Budget deficits have become a perennial problem in Rhode Island, where state spending is now about $10 billion annually, including federal funding.

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

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

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