RI tax revenue forecast ticks up by $27M

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PROVIDENCE, R.I. (WPRI) — Rhode Island leaders received some positive news Friday, as experts informed them they expect about $27 million in additional tax revenue to come in this year and next.

The number-crunchers who took part in the state’s twice-a-year Revenue Estimating Conference said state revenue will be $25 million higher in the current 2018-19 budget year and $2 million more in the 2019-20 budget year, compared with what they forecast when they met last in November.

But Steve Whitney, the Senate fiscal adviser, emphasized that about half the additional tax revenue was already accounted for in Gov. Gina Raimondo’s January budget proposal, leaving only about $13 million in additional resources beyond what she used to balance her plan.

A separate review of social-services caseloads indicated spending would be about $22 million lower over the two years than originally expected, though again Whitney said some of those savings were already built into Raimondo’s plan.

The close of Rhode Island’s May revenue meeting fires the starting gun on the always-frantic final weeks of the General Assembly session, as legislative leaders finalize a budget, their biggest undertaking of the year. It follows months of hearings on the initial proposal Raimondo put forward in January.

“Given the numbers we have seen over the past few months, I am encouraged that we ended in positive territory,” Senate President Dominick Ruggerio said in a statement. “But the net gain from the two conferences is a drop in the bucket when compared to the entirety of the state budget. We will now roll up our sleeves with the House and work to find the most balanced and fair solutions for the many competing interests for state resources.”

“I am glad to see that there hasn’t been a further erosion of revenues, especially given some of the recent softening in Rhode Island’s economic indicators,” House Finance Committee Chairman Marvin Abney said. “I am focused on addressing the budget before us and challenges that come with it. I will continue to advocate for stronger spending discipline to ensure the budget choices are not harder than they have to be.”

The new estimates project state revenue will rise 2.8% this year, from $3.91 billion in 2017-18 to $4.02 billion in 2018-19. From there it’s projected to climb to $4.13 billion in 2019-20.

Sports betting proved to be a dud for the current fiscal year: it’s now slated to bring in just $2.2 million through June 30, way below the original forecast of $23.5 million. State leaders changed forecasting firms to guide the new estimates, and say they expect sports betting to yield $22.7 million during 2019-20.

The governor and lawmakers are required by law to use the Revenue Estimating Conference’s forecasts when they put the budget together. Rhode Island’s approach has won praise: the Volcker Alliance, a national policy group, recently gave the state an “A” for its budget forecasting practices.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. 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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