PROVIDENCE – The revised budget approved last week by the R.I. General Assembly to try to close a looming $370 million gap for the current fiscal year was allowed to pass into law today by Gov. Donald L. Carcieri, who neither signed nor vetoed the measure.
“While the supplemental budget contains nearly 90 percent of my proposed budget” (READ MORE), “I will not sign it, because it does not include the statutory pension reforms which are absolutely necessary,” Carcieri wrote in a letter this afternoon that was addressed to the House Speaker and Senate President.
“Rhode Island is facing a current unfunded pension liability of nearly $8 billion, and the problem is getting worse by the day. Absent significant changes to the pension system, the cost to taxpayers will double in less than 10 years. That is unacceptable,” the governor continued.
“I am well aware of the General Assembly’s commitment to make significant changes to the public employee system before the end of June. Because of that, I will allow this Supplemental Budget to become law without my signature,” Carcieri said.
Critics might argue that he had little choice, given the veto-proof margins by which the measure cleared both chambers of the Assembly. The $7.3 billion revised budget was approved by the House of Representatives the evening of April 1, in a vote of 58 to 16 (READ MORE), and cleared the Senate the next afternoon, by a vote of 32 to 6. (READ MORE)
Besides tabling for later consideration the governor’s proposed changes to the state pension system – such as eliminating the annual cost-of-living adjustment (COLA) provision and establishing a minimum retirement age – lawmakers also restored $25 million in municipal aid for the year ending June 30.
By comparison, the entire $55.1 million in general revenue sharing approved in the original state budget for fiscal 2009 – much of it already spent – would have been eliminated under Carcieri’s January budget-gap plan. (READ MORE) The governor last month said he would restore some of that aid by giving local communities $31 million from the American Recovery and Reinvestment Act of 2009 (ARRA), but would require cities and towns to direct 25 to 75 percent of that sum toward education. (READ MORE)
Other Carcieri provisions that remained in the lawmakers’ budget included his proposal to raise the state tax on cigarettes. The new law calls for a $1 per pack tax hike to $3.46 – the highest of any state and 95 cents higher than the current $2.51 per pack tax in Massachusetts – but despite that increase, state revenue officials have said, the retail price of cigarettes will remain lower in Rhode Island than in Massachusetts.
Going forward, Carcieri said, the state’s “overall fiscal stability … is dependent upon major spending reforms by our cities and towns.
“The General Assembly must provide our cities and towns with relief from costly mandates, restoration of managerial prerogatives and specific reforms to collective bargaining,” he continued. The state’s local governments “cannot solve present-day fiscal difficulties with costly mandates and outdated work rules,” Carcieri said.
“Further, in the [fiscal] 2010 budget, we must reform our tax policy to make us competitive with Massachusetts and accelerate job growth. … For the sake of all Rhode Islanders, I expect all these concerns will be addressed by the end of this legislative session.”
News and information from the R.I. Governor’s Office are available at www.governor.ri.gov. 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 rilin.state.ri.us.
