There was much self-congratuling at the General Assembly over the last week and a half as lawmakers praised each other for balancing Rhode Island’s 2012-13 state budget without imposing all the new meals and sales taxes Governor Chafee proposed.
Not so fast, says veteran policymaker Gary Sasse. Democratic legislative leaders not only opened up bigger deficits down the road than Chafee – they also used a one-time fix to make the numbers work, which means there’s already a $148.9 million deficit projected for 2013-14.
“A structurally balanced budget is achieved when current expenditures do not exceed current revenues, [meaning] revenues generated in the budget year,” Sasse told WPRI.com in an email. “The FY 2013 budget adopted by the General Assembly is balanced by the use of a nonrecurring $93.9 million free opening surplus.”
Lawmakers’ budget spends $8.1 billion, about $156 million more than Governor Chafee proposed back in February. He later suggested using the $93.9 million one-time surplus for “one-time expenses” such as moving state offices and promoting economic development, but lawmakers didn’t go for it.
Using the one-time surplus for annual costs “effectively represents a significant structural deficit in the budget that begins on July 1,” Sasse said. “It was this type of budgeting that contributed to the state’s fiscal challenges. If we do not learn from history we are bound to repeat our mistakes.”
The House voted 57-15 to pass the budget June 8 at 3:38 a.m., and the Senate voted 30-7 to pass it Monday at 9:21 p.m. The tax-and-spending plan is now on the desk of Governor Chafee, who’s suggested he’s unlikely to reject it since lawmakers would likely just override his veto.
Senate Finance Committee Chairman Daniel DaPonte defended the measure: “This budget represents very difficult choices and tries to strike a balance between making critical investments to move our economy forward … while limiting the impact the budget will have on taxpayers so they can take care of their families.”
Chafee’s predecessor, Republican Gov. Don Carcieri, allowed the final budget passed during his tenure to become law in 2010 without his signature, after having signed the previous two. Carcieri’s final veto of a budget put together by Assembly Democrats came in 2007; lawmakers overrode his veto within hours.
Sasse served in Carcieri’s cabinet after a long career at the Rhode Island Public Expenditure Council.
• Related: Budget on autopilot gives Rhode Island permanent deficits (June 13)