The General Assembly has begun hearings on Gov. Gina M. Raimondo’s proposed $8.63 billion budget for fiscal 2016. Her office describes it as a “forward-looking, balanced budget proposal rooted in the belief that every hardworking person deserves the chance to make it in Rhode Island.”
The budget plan, which is aimed at building skills, attracting entrepreneurs and investment and fostering innovation, offers significant investments in growth and no broad-based tax increases. It also closes an inherited $190 million deficit.
Job creation is a top priority, essential in a state with one of the nation’s highest unemployment rates. According to the governor, Rhode Island gradually replaced many middle-class jobs that vanished during the Great Recession with low-wage jobs. Raimondo’s proposal was lauded by pro-government groups and many business organizations, but garnered less support from hospitals and nursing homes, which face $88 million in proposed cuts to Medicaid costs. Tourism groups also reacted negatively, as Raimondo’s proposal includes plans to consolidate tourism spending, which means less money for local tourism agencies and more for a statewide effort.
Among the key proposals contained in the budget:
Tax credits for expanding companies in targeted industries.
Financial incentives for businesses that move to (or expand in) Rhode Island and create new jobs.
Innovation grants.
Financial assistance for energy-efficiency projects for public buildings.
Incentives (a $25 million fund) to entice an anchor tenant to set up shop on the now-vacant former Route 195 land in Providence.
For “building skills,” the budget proposes:
$35.5 million increase in K-12 education.
A loan-forgiveness program for graduates that stay in the state and work in priority fields.
Aligning job training with industry needs.
Restructuring existing higher education grant programs to create a “last-dollar scholarship program” for Rhode Island students.
Investment in Prepare RI, a dual enrollment program that makes earning degrees or industry certification more affordable and attainable.
The governor also earmarked $44.5 million for an “economic-development initiatives fund” to be overseen by the new Office of the Secretary of Commerce. The funds would be made available by restructuring the state’s general-obligation bond debt. This would enable the state to defer some principal bond payments and save money by tapping current low-interest rates.
Other commerce-related initiatives:
$22.9 million transfer of certain state programs now under the authority of the Department of Administration and transfers from the general fund and Rhode Island’s hotel tax revenue.
$20 million for school building projects.
$5.2 million for the Small Business Assistance Program to help expand access to capital for the state’s small and growing businesses.
$1.8 million for the Anchor Institution Tax Credits program to encourage Rhode Island’s large and most innovative businesses to attract suppliers, affiliates and customer companies to the state.
$500,000 for the Innovation Initiative, aimed at funding organizations that offer technical assistance, space, and access to capital to companies in important industry sectors.
$500,000 for a competitive grant program that allows small and medium-sized businesses to earn between $5,000 and $50,000 vouchers for research, technology and engineering assistance from colleges, universities and other institutions. •
