Budget-gap bill clears R.I. House

PROVIDENCE – The R.I. House of Representatives last night approved a $7.3 billion revised budget plan for the current fiscal year that aims to bridge the looming state budget gap, in part by taxing unemployment benefits, slashing municipal aid and raising the cigarette tax.
The measure – “Making Revised Appropriations for the Support of the State for the Fiscal Year Ending June 30, 2009” (2009-H 5019A) – is the latest attempt to eliminate a fiscal 2009 budget deficit now estimated at about $370 million.
The bill, approved in a 58-to-16 vote has seen substantial revisions since it was filed Jan. 7 by Rep. Robert A. Watson, R-East Greenwich.
Changes last night included restoring $25 million in aid to cities and towns that had been cut in the version approved Friday by the House Finance Committee, in a 14-to-3 party-line vote. But the version that cleared the full House still pares $30 million from the municipal aid Rhode Island communities have been told they can expect this year.
The House also stripped out a 2-cent increase in the state gasoline tax – to 33 cents per gallon, from the current 31, including the state’s 1 cent environmental protection fee – that had been inserted in the measure by the House Finance panel. Proceeds would have gone to avert further cuts in municipal aid, from April to September this year and next, and at the R.I. Public Transit Authority (RIPTA), the rest of the time.
But it left intact a proposal to raise the cigarette tax by $1 per pack – to $3.46, the highest of any state and 95 cents higher than the current $2.51 per pack tax in Massachusetts – much as Gov. Donald L. Carcieri had proposed in his budget plan this January, when the FY2009 deficit was pegged at $357.4 million. (READ MORE) Local retailers have decried the plan (READ MORE), although state tax officials estimate that even with the hike, cigarettes still would be cheaper here than in the Bay State.
The House also kept a tax on the first $2,400 per person in jobless benefits – money exempted from federal taxation under the American Recovery and Reinvestment Act of 2009 (ARRA) – and rejected proposals to roll back existing tax decreases for the some of state’s wealthiest residents.
The Democrat-dominated chamber also has rejected Carcieri’s proposed changes to the state pension system, which included the elimination of the annual cost-of-living adjustment (COLA) provision and the addition of a minimum retirement age, although General Assembly leaders have said they plan to revisit the pension system later this year. (READ MORE)
The supplemental budget plan next must be heard by the Senate Finance Committee, then by the full Senate.
News and information from the R.I. General Assembly, including the House and Senate daily calendars and listings of measures introduced each day, are available at www.rilin.state.ri.us. For information about the status of legislation, or to view the text of a bill, go to rilin.state.ri.us/BillStatus.