PROVIDENCE – Still struggling to balance this year’s $7.81 billion state budget, the Carcieri administration now has to deal with fiscal problem with last year’s budget, too.
A year-end report from the R.I. Department of Administration shows that the state finished fiscal 2009 with a $61.8 million deficit in part because of a decline in revenue that was more severe than expected.
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In a statement released today, Gov. Donald L. Carcieri blamed the budget shortfall on revenue figures that were $65.1 million lower than government officials had estimated last year.
“The gravity of this situation should not be understated,” Carcieri said. “Tax receipts are dependent upon economic activity. If the economy continues to falter, so will the state’s revenues.”
State officials faced a similar situation last year, ending fiscal 2008 with a $33.7 million shortfall. In that case, the state balanced the budget by tapping the state’s rainy-day fund.
But Carcieri did not immediately offer a plan to close the fiscal 2009 gap.
The governor has been grappling with how to cut about $68 million in spending in the fiscal 2010 budget in order to balance the financial package. Last week, he said he planned a series of government “shutdown days” between September and June, which amounted to a 4.6 percent pay cut for the average state worker. Some unions representing state employees have file court complaints to block implementation of the plan.
Carcieri also proposed cutting millions in state aid to local communities, which drew a chorus of protests from municipal leaders.
In his statement today, Carcieri accentuated the positive, noting that state expenditures for fiscal 2009 ended up $277 million less than was originally budgeted in the spending package approved by the General Assembly in June 2008, and $2.17 million less than the budget plan after midyear revisions.
“This year-end report is encouraging in that we can see the efforts everyone in state government is making to live within our means,” Carcieri said.
The report said the greatest declines in tax revenue came in three areas. Personal income tax revenue came in $30.08 million lower than the $970.6 million budgeted in fiscal 2009. The sales and use tax declined $15.07 million from the expected $808.13 million. And corporate tax income, budgeted for $104.44 million, came in $7.6 million lower.
The Department of Revenue recently published a year-end report on FY2009 revenue which is available on the Department’s Web site: www.dor.ri.gov.
To view the fiscal 2009 preliminary closing report, visit this site.
