Carcieri proposes deep spending cuts for ’09

Gov. Donald L. Carcieri last week unveiled a $6.89 billion state budget proposal that calls for drastic changes to the Medicaid and welfare systems and assumes the termination of hundreds of state workers next fiscal year.
The budget plan would also consolidate several state departments and assumes the privatization of some state duties. The proposal represents an $89 million, or 1.3 percent, decrease from the $6.97 billion budget approved by lawmakers for this fiscal year.
The Carcieri administration said the tax-and-spending package for fiscal year 2009, which begins July 1, would hold the line on major taxes – including sales tax, capital gains tax and the alternative flat tax. In fact, general revenues are projected to decrease 2.7 percent to $3.35 billion in fiscal 2009, the administration said.
Meanwhile, the governor’s proposal calls for $3.27 billion in spending funded by the general revenue – a $130.9 million reduction over this year’s enacted budget, or a 3.8-percent decrease.
Carcieri’s spending recommendation is just the first step in a budget process that is expected to be extremely contentious this year as the Republican governor and the Democrat-controlled General Assembly grapple with a projected deficit in fiscal 2009 of more than $384 million.
Some of the budget proposal’s highlights include encouraging the elderly and disabled who are on Medicaid, when appropriate, to seek care at home through visiting nurses or at assisted-living facilities as opposed to more expensive nursing homes.
Carcieri also recommends reforming the welfare plan, the Family Independence Program – changes that include putting a two-year limit on cash assistance for families, instead of the existing five-year limit.
The entitlement reforms would lead to $66.7 million in savings next fiscal year, the administration said.
The budget plan also assumes that there will be 627 fewer state employees in comparison to this fiscal year, as the administration continues with its plan to cut 1,000 jobs. That reduction would translate to the savings of $71.7 million in salaries and benefits in the next fiscal year, according to the budget plan.
The spending proposal also included a savings of $60.6 million in personal costs that state budget officer Rosemary Booth Gallogly said are being negotiated with the unions representing state employees. Gallogly refused to elaborate on those savings for reporters last week.
“The number is based on something, but I’m not going to say what that something is,” Gallogly said. “I’m not going through the details – we’re in negotiations.”
Local education aid is recommended at $910.4 million – an increase of $25.7 million over this year’s enacted budget. &#8226