Scott MacKay Commentary: An Election Year, And A Status Quo Budget From Raimondo

Jan 19, 2018

Rhode Island Gov. Gina Raimondo has delivered her annual state budget proposal to the General Assembly. RIPR political analyst Scott MacKay says her objective this year for the $9.4 billion tax and spending proposal is focused on voters.


As she ramps up her reelection campaign, Raimondo is hoping that voters see her budget priorities as their own. The plan contains little that will raise hackles among a skeptical public. And the governor’s monetary salt shaker sprinkles some minor new spending in a plan that pushes major initiatives, particularly school repairs, to more bonded debt.

As is usual in an election year, there are no increases in the broad-based sales or income taxes, which haven’t been raised since the credit union crisis years of the 1990s. Raimondo has chosen not to take a comprehensive review of state taxes, which should be done. She doesn’t want to rock this special interest boat in an election year. Or perhaps she just remembers all the grief former Gov. Linc Chafee took in 2011 for trying to lower and broaden the sales tax.

“It’s pretty much a status quo budget,” says John Simmons, executive director of the business-financed research group, The Rhode Island Public Expenditure Council.

The big money is where it always is –about 70 percent of the budget is in just two items –social  services, including health care, and education aid. While her proposal is designed to avoid controversy, a dive inside the specifics shows that health care providers are likely to mount a lobbying Lollapalooza against the governor’s attempt to squeeze Medicaid.

Medicaid covers almost a third of Rhode Island’s residents and at more than $2 billion annually, is a huge slice of the budget. The governor’s proposal proposes to add co-pays for some Medicaid patients and scoop $6 million from Lifespan, the state’s largest hospital network. Raimondo proposes $70 million in cost reductions to Medicaid.

Nursing homes are given only a tiny increase that won’t cover inflation. This on top of the Raimondo Administration UHIP mess, which has stalled Medicaid benefits to elderly nursing home patients.

The billion-dollar cost of education aid to the cities and towns is projected to rise by a token amount –just $14 million. The School Committee lobby is already saying that’s too little. This is part of an old Statehouse game –lawmakers approve budgets with no tax increases and slough off the tough decisions on town and city councils and school committees. School expenditures are generally the largest item in local budgets. The only way for communities to finance what they don’t get from the state is to hike property taxes.

There are some accounting gimmicks that are the bane of honest budgeting. This budget grabs money from quasi-public agencies, such as Rhode Island Housing and the corporation that runs the Johnston landfill. And most problematic:  the governor is banking on $23.5 million in a new online sports betting operation regulated by the Lottery. That’s contingent on a pending U.S. Supreme Court decision.

Then there is the plan to open a dozen new medical marijuana stores and make it easier for patients to qualify by making “acute pain” an eligible condition. It begs the question of why not just legalize recreational pot, as Massachusetts is doing. Rhode Island isn’t going to be able to stop residents from driving over the border to legal pot dealers, so why not just legalize recreational pot and harvest a new tax? And just where will these new weed shops be located? Do you know of any neighborhoods out there angling to host more pot dispensaries?

The budget does continue the car-tax phase-out, which may or may not be prudent. But it’s reelection insurance for Democratic House Speaker Nick Mattiello of Cranston, so the governor isn’t going to mess with it.

The $250 million public school repair program will be subject to a bond and a November vote. Organized labor loves this plan because it means lots of work for the heavily-unionized building trades.

The state’s financial horizon looks bleak, with deficits projected through 2023. This budget does little to address that. In the meantime, lawmakers and the governor face the divisive issue of a taxpayer subsidy for a new stadium for the Pawtucket Red Sox to keep the team in the Ocean State. Lawmakers would be wise to tackle that before the budget.

Scott MacKay’s can be heard every Monday on Morning Edition at 6:45 and 8:45 and on All Things Considered at 5:44. You can also follow his political reporting and analysis at our “On Politics” blog at RIPR.org