RI House And Senate Reach Agreement To End Month-Long Budget Stalemate

Jul 31, 2017

Majority Leader McCaffrey speaks with reporters after emerging from a Senate caucus.
Credit Ian Donnis / RIPR

The Rhode Island House of Representatives and the Senate announced Monday they have reached an agreement to end a month-long impasse over the budget for the fiscal year that began July 1.

Under the agreement, the Senate will vote Thursday afternoon on the House version of the budget. Meanwhile, both chambers will take up stand-alone legislation requiring that the director of the state Department of Revenue file annual reports, staring in January 2021, on the phaseout of the car tax, and its sustainability.

The Senate is expected to pass the stand-alone measure this week, and the House during a fall session starting September 19. That session will also include at least some of the top bills left in limbo by the budget impasse.

Yet the stalemate may have at least some negative effect for local communities. According to Governor Gina Raimondo's office, the state plans to make local aid payments Tuesday based on the budget for the fiscal year that ended June 30. That could mean lower than expected payments in some cases.

UPDATE: Raimondo said Tuesday that the state will look at making up the difference for cities and towns if the Senate, as expected, gets approved Thursday. Some communities, including Providence, expect the state to plug that gap in revenue.

The stalemate flared when the Senate added a last-minute amendment to the state budget, calling for a freeze in the car tax phaseout if state revenue plunges. House Speaker Nicholas Mattiello called the move a power grab and sent his members home on June 30, rather than presenting the amended budget for their consideration.

Mattiello and Ruggerio didn't speak with one another for about two weeks after the dispute began. They then held a series of talks leading to the compromise that addresses both the resolution of the budget and the sustainability of the car tax phaseout.

Ruggerio gathered Democratic senators for a closed caucus at the Ladder 133 sports bar in Providence to get their support for the agreement.

Senate Majority Leader Michael McCaffrey spoke with reporters after emerging from a meeting that lasted a little more than an hour.

He said he was confident leadership has the 26 votes necessary to pass the budget, although he put the number of senators who attended the caucus at roughly 22 or 23.

"What's going to happen, the Senate is going to come in and removed the trigger that we proposed in the budget and then we're going to have the separate stand-alone piece of legislation," McCaffrey said, "and it shows that the speaker and the members of the House leadership team have addressed the concerns of the Senate about the affordability and sustainability of the car tax."

McCaffrey said specifics on what bills will be taken up in the September session have not yet been determined. He said he expects talks on that subject with House Majority Leader Joe Shekarchi after the Senate passes the House budget.

But the legislature is expect to pass bills requiring paid sick leave for some Rhode Island workers who don't currently receive it; a bill meant to remove guns from people convicted of domestic violence; and a criminal justice package that has been a Senate priority for two years, according to Statehouse sources.

In a statement, Mattiello said, “I’m pleased the Senate recognized the importance of moving forward and reconvening on Thursday to finalize the budget process. The car tax phase-out remains in the budget and the relief Rhode Islanders desire from this punitive tax will be implemented as I promised. We also recognize the Senate’s concerns related to the car tax phase-out from a long-term perspective, and I think it makes sense for the Director of Revenue to commission an annual study on how this program and other programs are working in conjunction with projected revenue .... I thank President Ruggerio for his diligence in resolving our budget disagreement.”

McCaffrey said the closed caucus featured "a lively discussion and a lot of the Senate Democrats got to say what their piece was relative to it, and most of them were glad that the president did what he did, so we are thinking of the sustainability of the car tax and making sure that by coming in that we're not going to stop cities and towns and school departments from getting revenues that they're saying they need to keep their schools and things going."

The General Assembly has endured a series of bumpy endings in recent years.

McCaffrey rejected suggestions that the budget impasse held the state hostage.

"What it showed, that the Senate had issues and concerns about the sustainability and the viability of the car tax in future years," he said, "and that's what the purpose of a democracy is -- to get the issues out there and discuss them. Obviously, you can see in the state of Rhode Island that we work through our differences, unlike in Washington, and we're going to come in and pass a budget."

This post has been updated.