Scott MacKay Commentary: The Proposed 2016 RI State Budget's Pluses And Minuses

Jun 12, 2015

Rhode Island’s General Assembly and Gov. Gina Raimondo have reached agreement on her first state budget. RIPR political analyst Scott MacKay on what the new budget will do and what it lacks.

Gov. Gina Raimondo got much of what she originally proposed in the state budget. It has yet to be voted on in the General Assembly.
Credit RIPR FILE

The $8.7 billion state budget for the financial year that begins three days before the Bristol 4th of July parade  seems greased for approval at the Statehouse. As is usually the case, this spending and taxing plan contains elements Rhode Islanders should cheer yet   fails to address some of our little state’s crying needs.

On the plus side:  A surplus of more than $100 million meant no increases in the broad-based sales and income taxes. There are cuts in state income taxes on social security taxes and a drop in energy taxes paid by businesses. Education at the elementary and secondary level gets a boost and higher education receives a modest increase. There are a number of economic development initiatives that Raimondo and her team have pushed. And spending on medical programs for our poor citizens has been trimmed in a manner that hopefully won’t hurt them.

On the minus side: This spending plan does not provide for extra money to deal with one of Raimondo’s major campaign themes, fixing the state’s crumbling bridges and potholed roads. There are new taxes on health insurance policies. Most importantly, there is nothing in the budget that addresses high property taxes, which hurt businesses and hard-pressed homeowners.

The budget appears to follow the Statehouse  tradition of handing  out goodies to business and selected groups of taxpayers, such as the politically untouchable elderly, and make mayors and town councils live with the no-win task of raising property taxes to support schools, roads and police.

This isn’t the first time such thinking has held sway at the capitol – several years ago under then-Gov. Don Carcieri’s administration, lawmakers went along with his plan to slash aid to cities and towns. At the same time, tax rates for the wealthiest Rhode Islanders dropped. This was supposed to jump-start the economy. Instead, it led to soaring property taxes and rivers of red ink in municipal budgets. Central Falls, the state’s poorest  community, plunged into bankruptcy.

Raimondo did get the Assembly to approve a bunch of programs, most of them modest, to bring economic activity to a state still struggling to recover jobs lost in the recession. Among the most promising are tax-credits for real estate development, redevelopment of the former Interstate 195 land in downtown Providence and   helping small business owners gain access to capital for expansions.

Other ideas are hazy. There is something called an ``industry cluster grants fund’’ which is designed to help `geographic concentrations of interconnected firms and related industries in a field,’ whatever that means. The good news here is that lawmakers have some control over what works and what doesn’t. Almost all of the new economic development initiatives expire on the last day of Raimondo’s first term in December, 2018.

After an opening joust with lawmakers over derogatory remarks she made at a national governors’ meeting in Washington, D.C., Raimondo and the Democrats who control the Assembly forged a good working relationship on this budget. She got much of what she wanted through negotiations with House Speaker Nick Mattiello,of Cranston  and Senate President Teresa Paiva Weed of Newport. Mattiello saved her from votes that could have been embarrassing to her administration by nixing the so-called Taylor Swift tax on fancy second homes and delaying consideration of Raimondo’s ill thought trucker toll plan.

The tolls and another too-hot-to-handle issue this session, the Pawtucket Red Sox move to a new stadium to be built in Providence, were put aside for another day. In the long run, Raimondo’s biggest win of the session was the pension overhaul settlement that she championed as state treasurer. What began with a blast of florid battles with state workers and their union leaders ended with the whimper of a compromise that takes away the possibility of a legal judgement that could have  severely hampered the future of state government’s ability to police the roads, educate the kids and help the poor.

It’s nice  to see an era of good feelings on Smith Hill, even if we don’t know how long it will  last? Democracy is inherently messy, in Churchill’s famous dictum, the worst form of government ever devised. Except for all the others.

Scott MacKay’s commentary can be heard every Monday on Morning Edition at 6:40 and 8:40 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