PROVIDENCE, R.I. (WPRI) – An ongoing jump in tax revenue as the economy improves has put Rhode Island on course to finish the current budget year with plenty of extra cash, according to a new report.
In a report issued Monday, state budget officer Tom Mullaney said the state is on track to finish its 2015-16 fiscal year with a surplus of $121 million when it closes the books June 30. The projection is based on actual spending from July through March and incorporates newly updated forecasts for revenue and social services.
The projected surplus is more than twice as big as was expected six months ago, when it was estimated Rhode Island would finish the 2015-16 budget year in the black by only $51 million. It’s also a vivid contrast with its two neighbors, as Massachusetts and Connecticut both see their tax receipts fall below forecasts.
The key driver of the positive budget news is rising tax receipts, with total general revenue now expected to come in at $3.6 billion. That amount is $91 million higher than lawmakers had expected when they finalized the current $8.67-billion state budget last June.
But the surplus would be even larger if various state agencies weren’t on track to overspend their budgets by a combined $16 million compared with what lawmakers authorized nearly a year ago, according to Mullaney.
The two biggest culprits in that overspending are the Unified Health Infrastructure Project, a nine-figure computer upgrade for public-assistance programs, which needs $10.6 million more than budgeted; and Medicaid, the state-federal health insurance program for low-income people, which needs $9 million extra.
The new numbers come as Gov. Gina Raimondo and legislative leaders continue backroom negotiations over the final details of this year’s state budget – and should make their job easier, since extra revenue means fewer tough choices are required.
Raimondo has proposed an $8.9-billion tax-and-spending plan for 2016-17 that emphasizes education and business incentives. House Speaker Nicholas Mattiello said on WPRI 12’s Newsmakers last week that he hopes to have a final budget plan on the House floor for debate and a vote by the first week of June.
“We’re going to have a good budget again this year,” Mattiello said. “We’re going to look at taking care of folks at the lower end of the socioeconomic scale, the middle class, remove and reduce some taxes, try to help the businesses, try to create an economy that creates jobs and increases the income of folks.”
In her initial budget request, Raimondo suggested lawmakers use any surplus cash to do the following: add education money for vocational training and transportation support; drop her proposed transfers from quasi-public agencies; expand the Earned Income Tax Credit; bolster the Rhode Island Infrastructure Bank’s Efficient Building Fund; increase pay for child-care and home-care workers; and buy additional voting equipment, including e-poll books.
Spokespersons for Mattiello and Senate President M. Teresa Paiva Weed did not immediately respond to requests for comment on how they want to use the surplus money.
Mullaney’s office published this list of all agencies projected to spend significantly more or less than they were supposed to under the budget adopted in June: