RI on track to finish budget year with $59M surplus

tedstatehouse

PROVIDENCE, R.I. (WPRI) – Three months into its budget year, Rhode Island state government is in the black.

In a report issued Tuesday, state budget officer Tom Mullaney said the state is on track to finish its 2016-17 fiscal year with a surplus of $59 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.

The main drivers of the improving budget picture are a larger-than-expected surplus from last year and a continued upswing in tax revenue, which is set to come in $45 million higher than lawmakers expected when they authorized the current budget in June.

However, the projected surplus would be even bigger if various state agencies weren’t on track to overspend their budgets by a combined $28 million, according to Mullaney.

The two biggest culprits in that overspending are Medicaid, the state-federal health insurance program for low-income people, which needs $9.6 million extra; and a recent labor arbitration agreement with the union that represents Rhode Island correctional officers, slated to cost $9.4 million.

Still, the improving fiscal picture for the state should make it easier for Gov. Gina Raimondo to balance her proposed 2017-18 budget, which is due to the General Assembly by Jan. 19. Lawmakers usually don’t approve a final budget until June.

During last spring’s budget debate, analysts in the House of Representatives forecast that Raimondo would need to close a deficit of $184 million when she put together her 2017-18 tax-and-spending plan. But the newly projected surplus of $59 million this budget year, plus rising revenue expected next year, should reduce that amount.

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:

fy16-1q-state-report

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes The Saturday Morning Post and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram