RI leaders set to unveil new state budget tonight

Raimondo, lawmakers have reached agreement on more than $8 billion in spending

PROVIDENCE, R.I. (WPRI) – Happy Budget Day.

Rhode Island lawmakers will unveil their biggest policy document of the year – a new state budget – on Tuesday.

Sometime this evening, the House Finance Committee is expected to release and immediately approve legislative Democrats’ revised version of Gov. Gina Raimondo’s $8.6-billion tax-and-spending plan, setting up final votes next week. The one-year plan will cover the new 12-month fiscal year, which starts July 1.

The unveiling of General Assembly leaders’ negotiated budget deal always signals the final stretch of Rhode Island’s annual legislative session. The document is the product of months of behind-the-scenes negotiations between the House speaker, the Senate president and the governor. This year, though, all three leaders were elected as Democrats for the first time since 1994.

If past practice holds, the finance committee will approve the revised budget almost immediately after its public release tonight. Following a required seven-day waiting period, the budget then will go before the full House, which usually holds a marathon debate before approving it. From there it will move on to the Senate for a quick approval, before finally reaching the governor’s desk for her signature.

Democratic legislative leaders rarely have much trouble passing the budget once they finish putting it together. The party controls 100 of the 113 seats in the House and Senate.

For lawmakers, this year’s budget-writing process has been easier than most thanks to an improving economy. Last month the state’s official number-crunchers determined there would be $173 million more to work with than expected due to higher-than-forecast tax revenue. That announcement led Raimondo to drop her proposed “Taylor Swift tax” on million-dollar second homes, among other changes.

State House observers will be watching a number of pieces of the budget closely to see whether lawmakers went along with the governor’s suggestions or went in a different direction – here are a few examples:

• Medicaid: Raimondo has proposed $148.5 million in cuts to the state-federal health insurance program for low-income Rhode Islanders, which has become one of the fastest-growing parts of the budget. A major plank of the proposal is to reduce rates paid to nursing homes and hospitals, while simultaneously moving to pay them based on quality of care. Lawmakers have been lobbied to undo the cuts.

• Economic Development: Raimondo has proposed a self-described “jobs package” of programs she hopes will spur economic development, ranging from new tax credits for real-estate development to a shift in how the state allocates tourism money that would boost statewide promotional efforts. Lawmakers have signaled general support for the ideas, which have strong backing from the establishment business community.

• Transportation: This is one area where the governor may not get her way – at least not yet. Raimondo’s proposal for $4.8 billion worth of road and bridge repairs over the next 10 years has run into heavy opposition from truckers, who would face a new toll to pay for it. Speaker Mattiello’s spokesman said Monday the plan is “not ready for prime time” and remains unlikely to make it into the budget, though it could be approved later.

• Social Security: Speaker Mattiello has made tax breaks for retirees a cornerstone of his legislative agenda this year, and as the man in charge of the legislative chamber that controls the pursestrings, he’s likely to get what he wants. While Raimondo’s budget already proposed eliminating income taxes on Social Security benefits for couples making up to $60,000, Mattiello wants to expand the exemption to higher-earners.

• Pensions: A tentative settlement to end a union lawsuit against the 2011 pension overhaul – which saved taxpayers roughly $4 billion by reducing state workers’ retirement benefits – is expected to win judicial approval shortly. The final step would then be for lawmakers to pass it, which they will likely do as part of the budget. The settlement would add about $290 million to Rhode Island’s roughly $4.8-billion pension-fund shortfall.

• HealthSource RI: Rhode Island’s state-run insurance marketplace, set up to implement President Obama’s health law locally, wants to add an assessment on health plans to fund its budget going forward. Some lawmakers have expressed wariness about the idea and say Rhode Island should switch to the federal HealthCare.gov system, but Raimondo supports keeping HealthSource.

• PawSox: Speaker Mattiello had expressed hopes of including state support for a new minor-league ballpark in Providence in the budget, but public opposition and the sudden death of PawSox President Jim Skeffington have slowed down the project. PawSox Chairman Larry Lucchino said last week the team needs more time to try and build support before lawmakers take any action.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

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