PROVIDENCE, R.I. (WPRI) — Rhode Island’s state government closed out the 2020-21 budget year with a surplus of $332 million, an amount that’s $51 million higher than lawmakers had expected when they crafted the current year’s tax-and-spending plan.
The final budget surplus for the recently concluded fiscal year — which ended June 30 — was more than double the $156 million surplus of the year before, according to a preliminary report released Wednesday by State Controller Dorothy Pascale. Both years’ budgets were significantly affected by the pandemic.
(Pascale took over as controller after the July 30 retirement of Peter Keenan, who had held the job since 2016. She has also been serving as director of the state’s Pandemic Recovery Office since April.)
Pascale said general revenue came in $214 million above estimates during 2020-21, with income tax receipts nearly 5% over forecast and sales tax receipts almost 4% higher.
However, the eventual final surplus amount could be affected significantly by ongoing Medicaid billing problems at the state-run Eleanor Slater Hospital, a long-running challenge. Pascale said the financial impact of the Medicaid issue at Slater is “not estimable at this time.”
In July, House fiscal staff estimated the billing issues at Eleanor Slater had cost the state upward of $200 million in general revenue since 2019.
Most of the extra money is already spoken for: state lawmakers voted to use $281 million of the $332 million surplus to plug a hole in the new 2021-22 budget that’s now in effect.
Experts project the state is facing a budget deficit of roughly $200 million for the next fiscal year, with Gov. Dan McKee scheduled to release his proposal to close the gap in January.
However, that estimate takes no account of the fact that the state is currently sitting on $1.1 billion in unspent federal money from the American Rescue Plan Act. The state is also expected to receive major influxes of cash from Washington if Congress passes the $1 trillion bipartisan infrastructure bill and Democrats’ $3.5 trillion budget reconciliation plan.
Rhode Island’s annual state budget currently totals over $13 billion, a figure that has ballooned by a huge inflow of federal funds during the pandemic. Pascale said the state’s so-called rainy-day fund is effectively fully funded, with a balance of $228.3 million.
Ted Nesi (email@example.com) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter, Facebook, LinkedIn and Instagram
This story has been revised to correct the fiscal years.