RI lawmakers to debate $8.67B state budget today

Final vote could wait for Wednesday; expansion of hotel tax a focus for some

PROVIDENCE, R.I. (WPRI) – The 75 lawmakers in Rhode Island’s House of Representatives will kick off their marathon annual budget debate this afternoon – but unlike in prior years, they may not pull an all-nighter.

House Speaker Nicholas Mattiello, finishing his second year at the helm, has already announced the budget debate will pause if it hasn’t wrapped up by late this evening, then resume Wednesday afternoon – a sharp contrast with prior years, when the debate has lasted into the wee small hours of the morning before a final vote.

It’s unclear, though, if the House will need that much time.

The $8.67-billion budget proposal unveiled by lawmakers last week received unanimous approval from the House Finance Committee, with even the panel’s Republicans giving their assent. The measure, a revised version of Gov. Gina Raimondo’s original tax-and-spending plan, followed months of private negotiations between the House, Senate and governor’s office as well as public hearings.

Among other initiatives, the budget creates a suite of new economic-development programs Raimondo has proposed to boost job growth; adds a tax exemption for Social Security benefits; removes sales taxes on energy for business; authorizes a new insurance fee to fund HealthSource RI; reduces Medicaid spending; boosts education funding; and green-lights the settlement to end a union lawsuit against the 2011 pension overhaul.

“This is a budget that is pro-business and pro-jobs that will move our state forward,” Mattiello, D-Cranston, declared when the measure was unveiled last week.

House Minority Leader Brian Newberry said GOP lawmakers supported the budget in committee in part because it includes at least four of his caucus’s priorities: the Social Security tax break, the Medicaid cuts, the elimination of the energy sales tax, and a reduction of the corporate minimum tax from $500 to $450.

“While we would have gone further on all of those, they are a good start and a recognition of things we have been pushing for years,” Newberry told WPRI.com.

House spokesman Larry Berman said lawmakers filed 20 proposed budget amendments ahead of Tuesday’s debate, though nine of them came from House leaders “to fix technical issues.” Multiple amendments target a proposed expansion of the state’s room tax to cover vacation rentals and other non-hotel lodgings, he said.

House Republicans on Monday offered an alternative to Raimondo’s proposed truck toll for bridge repairs, which didn’t actually make it into in the budget but could get approved later. The GOP plan is unlikely to pass: their caucus is vastly outnumbered in the House, holding only 12 of 75 seats, and Mattiello opposes their idea.

The budget contains no specific provisions to support the proposal for a new PawSox stadium in downtown Providence.

The budget passed by House Finance would reduce Rhode Island government’s spending by 1% in the 2015-16 fiscal year that starts July 1 compared with what lawmakers authorized a year ago; about a third of the funding will be provided by the federal government. The final negotiated budget deal includes about $38 million more in spending than Raimondo proposed in March.

Here’s how the House Finance budget would allocate the proposed $8.67 billion in spending:

  • Health/Human Services: 43%
  • Education: 28%
  • General Government: 17%
  • Public Safety: 6%
  • Transportation: 5%
  • Natural Resources: 1%

There’s been no word so far on how the final budget agreement would impact Rhode Island’s structural deficit – the state’s perennial gap between revenue and expenses – down the line. Raimondo’s aides estimated her original proposal would have lowered the 2016-17 deficit from $256 million to $75 million, and the 2018-19 deficit from $496 million to $286 million.

Once House lawmakers approve a budget, it will be sent to the Senate, where the Senate Finance Committee has already announced it could vote on the measure as soon as Wednesday or Thursday if it clears the House. From there it would go to the full Senate and then, if passed there, to Raimondo’s desk for her signature.

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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