House committee passes budget that funds car tax phaseout, free tuition at CCRI

Photo: Steph Machado/WPRI-TV

PROVIDENCE, R.I. (WPRI) – Rhode Island House leaders on Thursday night unveiled a proposed state budget for the 2017-18 fiscal year that fully funds the first year of House Speaker Nicholas Mattiello’s plan to eliminate the state’s unpopular car tax.

The $9.2 billion tax-and-spending plan also contains a compromise version of Gov. Gina Raimondo’s plan to provide two years of free college tuition to Rhode Island residents. Under the compromise, Rhode Islanders would be able to obtain an associate’s degree at CCRI at no cost. The governor had originally proposed two free years at URI and RIC, which are not included in the compromise.

The scholarship would also require a pledge to remain in Rhode Island for two years after graduation and a 2.5 GPA.

“Rhode Island’s going to be the fourth state in the nation that offers tuition-free community college and gives every single Rhode Islander the opportunity to be able to get that,” Raimondo’s communications director Mike Raia said after the budget compromise was struck.

The House Finance Committee voted 15-4 to pass the budget shortly before 1 a.m. Friday. Despite missing a midnight deadline, House leaders have agreed to waive the usual 7-day rule in order to start the debate next Thursday.

In the proposal, Mattiello’s $221 million five-year plan to eliminate the car tax receives the $26 million he called for to fund the plan in its first year. The phaseout plan requires the state to reimburse cities and towns for lost revenue as they gradually cut the car tax over six years.

“We’re going to take 150,000 cars off the car tax rolls in the first year alone,” Mattiello said.

The budget proposal also includes a reinstatement of free RIPTA bus passes for the elderly and disabled, a program that changed this year when those riders started to be charged a reduced fare. The free fares will be restored for at least two years.

The House budget also proposed raising the minimum wage by 50 cents to $10.10 per hour in 2018 and another 40 cents to $10.50 in 2019.

The budget unveiled Thursday is a revised version of the one put forward by Raimondo in January. Unexpectedly weak tax revenue and overspending by state agencies in the months since had put a roughly $134-million hole in the governor’s plan.

“I am pleased to say that we’ve been able to successfully reach compromise where there’s something of importance that each chamber and the governor have been able to work out and work into a very difficult budget,” Mattiello said. “It required some creativity.”

Mattiello said in order to close the budget gap, the new plan does not include some new employees requested by the administration, other than “direct-service” employees such as new workers at the DMV. He also said $25 million worth of “efficiencies” in general government will be required.

Just like the governor’s initial proposal, the lawmakers’ budget plan does not include any broad-based tax increases to the sales or income tax. It does raise the cigarette tax by 50 cents.

Raimondo’s amendment to add more medical marijuana compassion centers in the state did not make the cut, Mattiello said. Her plan would have raised the number of centers to “no less than six” and was expected to raise $1.5 million in revenue. The House has passed a bill to create a marijuana study commission.

The full House is expected to debate and vote on the budget bill next Thursday, with the Senate to follow. If both chambers pass it, the spending plan will go to Raimondo’s desk for her signature.

Mattiello pledged not to allow the floor debate to go past 10 p.m., and said the vote could take two days or more if necessary. General Assembly leaders faced sharp criticism last year for passing dozens of bills in the middle of the night at the end of the session.