Moody’s offers mixed comment on RI’s 2013 budget

Jun 27, 2012

Moody’s Investors Service says the $8.1 billion budget signed into law by Governor Lincoln Chafee on June 15 “is credit positive for Central Falls and schools, but leaves Woonsocket and pensions unaddressed.”

Moody’s points to “a material increase in funding for schools” — $34 million, or almost 4 percent, “marking the third consecutive annual increase in school funding. State funding for education now stands at over $900 million, well above pre-recession peak.”

The ratings service says changes in the distribution formula for school aid result in more funding for communities with great population growth and declines in personal income.

The biggest single-year percentage increases in education aid are in Barrington, East Greenwich, Lincoln, Cranston, and New Shoreham. The biggest losers are Chariho, Portsmouth, Bristol-Warren, South Kingstown and Central Falls.

Moody’s notes how the budget includes $2.6 million, payable to Central Falls retirees over five years, allowing that city to continue its departure from bankruptcy.

The ratings service also notes ongoing fiscal challenges in Woonsocket and with locally administered pensions:

“Members of the legislature have publicly stated that they intend to take up local pension reform, but the delay into the next legislative year highlights the significant political hurdles they’ll have to surmount.”