PROVIDENCE, R.I. (WPRI) – The state of Rhode Island’s budget year doesn’t end until next June 30, but if current trends continue, Smith Hill’s coffers will have plenty of extra cash when all is said and done.
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 $51 million when it closes the books next June. The projection is based on actual spending from July through September and last week’s updated forecasts for revenue and social-services costs.
The rosier numbers are a reflection of tax revenue pouring in at a faster clip. Yet the projected surplus would be roughly twice as high if various state agencies weren’t on track to overspend their budgets by a combined $47 million compared with what lawmakers authorized in June, according to Mullaney.
The two biggest culprits in that overspending are the Unified Health Infrastructure Project, a massive computer upgrade for public-assistance programs now slated to cost about $380 million, which needs $14 million more than budgeted; and Medicaid, the state-federal health insurance program for low-income people, which needs $15 million extra as enrollment rises and some savings initiatives fall short.
Still, the improving revenue picture for the state should make it easier for Gov. Gina Raimondo to balance her proposed 2016-17 budget, which is due to the General Assembly by Jan. 21.
During the summer, analysts in the House of Representatives forecast that Raimondo would need to close a deficit of $132 million when she put together her next tax-and-spending plan. But the newly projected surplus of $51 million this budget year, plus rising revenue expected next year, should whittle that amount down significantly.
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:
Most of the largest problem spots are in social services. In addition to UHIP and Medicaid, the R.I. Department of Children, Youth and Families is expected to overspend by nearly $8 million and the R.I. Department of Behavioral Health, Developmental Disabilities and Hospitals is expected to overspend by $6 million.
The R.I. Department of Corrections is facing an overall deficit of $7 million, which the budget office attributed to an expected cost-of-living adjustment for the R.I. Brotherhood of Correctional Officers union, whose long-running dispute over a new contract is going into arbitration.
The R.I. Department of Environmental Management blamed its expected deficit of $800,000 on the one-time costs of cleaning up “severe damage” at nine state facilities from the Aug. 4, 2015, macroburst storm.
Mike Raia, a spokesman for the Executive Office of Health and Human Services, said in a statement the various agencies under the purview of his boss, Secretary Elizabeth Roberts, are working on efforts to “provide better value for taxpayers.”
“Secretary Roberts and her staff are working directly with BHDDH, DCYF and the Medicaid team to develop corrective action plans that provide necessary services within the budget that was approved earlier this year,” Raia said. “We intend to substantially narrow the gaps in these agencies before the fiscal year closes next June.”
Mullaney said the R.I. Office of Management and Budget is now reviewing the agencies’ budget requests and working with them “to take actions to effectively and efficiently use taxpayer dollars and to develop plans to reduce expenditures.”Ted Nesi (firstname.lastname@example.org) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes The Saturday Morning Post. Follow him on Twitter: @tednesiAn earlier version of this story put the amount of overspending by state agencies at $54 million; the amount has been changed to $47 million to reflect the fact that $7 million of the $54 million figure is a reappropriation from last year.