PROVIDENCE, R.I. (WPRI) – After seeing how quickly Rhode Island drained its so-called rainy day fund during the pandemic, House Speaker Nicholas Mattiello is pushing for a constitutional amendment to double the state’s reserve account and reduce annual spending.

The Cranston Democrat filed a resolution Monday, which if approved by the General Assembly would ask Rhode Island voters to amend the state’s constitution and gradually increase its “budget reserve account” – known better as the rainy day fund – from 5% to 10% of general revenue each year.

The fund is designed to help the state balance its budget during times of need – such as emergencies and economic downturns – but Mattiello said the state hasn’t tucked away enough money each year, which has become glaringly apparent during the pandemic.

“The speaker believes it’s time to talk about adequate funding for the rainy day fund in the event of a severe economic downturn like the one we are experiencing,” Mattiello spokesperson Larry Berman said. “The current rainy day fund was not nearly enough to cover the revenue losses in the current crisis.”

Rhode Island – like many other states – is facing financial disaster because of COVID-19. State leaders last month decided to postpone passing an operating budget for the current fiscal year, which technically started July 1, until Congress determines whether to pass budgetary relief for local and state governments.

But lawmakers still had to use $120 million from the state’s rainy day fund to close a massive deficit in last fiscal year’s budget, which ended June 30. Revenue has slumped during the pandemic, especially when the state closed its two casinos operated by Twin River Worldwide Holdings Inc., as gambling is the state’s third largest revenue source.

As a result, the rainy day fund was left with only about $77.6 million, according to the Rhode Island Public Expenditure Council, representing about a third of the amount left over after the previous fiscal year. The public policy research nonprofit, also known as RIPEC, supports increasing the rainy day fund.

“A rainy day fund of 10% would be an important fiscal improvement for the state, and seems to be a responsible but not excessive goal,” RIPEC executive director Michael DiBiase said about the speaker’s proposal.

DiBiase, who joined the nonprofit in the beginning of the year, previously worked for multiple administrations, including most recently as director of the R.I. Department of Administration under Gov. Gina Raimondo.

Rhode Island currently ranks No. 38 in the country and last in New England when it comes to the size of its rainy day fund, according to RIPEC. The nationwide median is 8% of general revenue, and Massachusetts sets aside 9.5% compared to 5% in Rhode Island.

While overall supportive of bolstering the reserve account, DiBiase also warned that it should be done in a way that doesn’t hurt the state financially in the short-term. Rhode Island each year is required to earmark 3% of general revenue to go toward the rainy day fund, which Mattiello proposes should gradually increase to 5% between next fiscal year and fiscal year 2030-31.

(To pay for the increase, Mattiello has proposed reducing how much the state spends in general revenue each year from 97% next fiscal year to 95% in fiscal year 2030-31.)

DiBiase said the overall timing is plausible, but he’s concerned Mattiello’s proposal to increase the rainy day fund by 0.2% each year could be too quick, specifically over the next few years when the economic fallout from the pandemic lingers. DiBiase said the state instead could implement larger increases in the years after the public health crisis is under control.

“It’s reasonable to get this done by the end of the decade, but I would leave us a few years to start the process,” DiBiase said. “I wouldn’t make our lives any more difficult over the next two or three fiscal years.”

Ultimately, it will be the voters who decide whether to support Mattiello’s proposal. But the speaker must first garner the backing of his fellow lawmakers. His proposal is already scheduled for a Wednesday hearing in the House Finance Committee. Chairman Marvin Abney, D-Newport, is a cosponsor of the resolution.

Senate President Dominick Ruggerio spokesperson Greg Pare the president “has not had a conversation with the speaker on his proposal or the opportunity to review it.” Gov. Raimondo, meanwhile, agreed with Mattiello that the rainy day fund isn’t well-funded, but stopped short of offering her support for his proposal.

“In the face of the worst financial crisis our country has seen since the Great Depression, it became clear that our rainy day fund was insufficient to help us weather a recession of this significance,” Raimondo spokesperson Audrey Lucas said. “As we work together on a new budget, it’s smart to consider proposals that prepare for future downturns, but it’s critical that we do so while balancing the need to make investments that will create jobs and stimulate our economy.”

The governor this week announced her own plan designed to pull Rhode Islanders out of the current economic crisis, including a slew of bond initiatives to pay for housing, job training and a new state health lab. Like Mattiello’s proposal, the governor’s would require both General Assembly support and voter approval in November.

Ruggerio has offered his support, while Mattiello spokesperson Berman said the House would not take a position until the bond initiatives are “fully vetted.”