Governor Orders Spending Cuts

Department heads in Rhode Island are taking initial steps toward trying to make up an anticipated shortfall of between $80-million and $100-million dollars for this year. Governor Lincoln Almond issued an executive order Monday that limits all state agencies to only essential spending.

It says every job opening, all travel, and plans for conferences and purchases must be carefully reviewed. State Director of Administration Robert Carl said government cannot freeze expenses completely, ?If you?ve got an essential function, its not like government is closing up, but make sure you avoid unnecessary expenditures.?

Department directors have been told to reduce overtime. The governor is also cutting spending for new capital projects.

General Assembly leaders and the Governor agreed last week to try to cut spending in anticipation of a downturn in tax revenues and in light of increased state expenses in reaction to the September 11 attacks. The governor then suggested holding up a phase out of the state auto excise tax. The chief proponent of that tax break defended it Monday.

State Representative Antonio Pires, the former chairman of the House Finance Committee, said the car tax is part of a package that balanced property tax relief with business incentives. ?Capital gains, which the governor favored, probably would not have been able to pass on the floor if members didn?t feel like their communities were getting a certain amount of property tax relief,? he said.

The Almond administration says the car tax phase out just shifts the burden of collecting taxpayer dollars from local to state government.