PROVIDENCE – Gov. Donald L. Carcieri is imploring the R.I. General Assembly to resist the urge to use the roughly $125 million in “cash assistance” that he expects the state to receive from the federal economic-stimulus package to help close the state’s estimated $360 million budget deficit.
Carcieri told this morning’s meeting of the R.I. Economic Policy Council (EPC) that he expects the state to receive a stimulus package that will include an “outright grant” of $50 million this fiscal year and another $75 million in Medicaid assistance, as well as a separate infusion of money earmarked for transportation and other infrastructure improvements.
He said he wants to set aside part of that money – but not the infrastructure funds – rather than burning through the whole package for a one-time fix.
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“This thing could get worse,” the governor told the Economic Policy Council, whose members are mostly business leaders and executives. “Things could decline between now and the end of the fiscal year. We may need that extra to get us through.”
Carcieri said that some legislators will be tempted to use the stimulus money to close the state’s anticipated $360 million shortfall for fiscal year 2009, which runs through June 30.
His own mid-year supplemental budget proposal includes massive cuts to local aid, controversial changes to the Medicaid system and changes to the state pension system that have drawn protest from state labor groups. (READ MORE) But, the governor acknowledged, it also calls for the use of $27.5 million in stimulus money to help finance Medicaid programs this fiscal year.
“It’s a very difficult time,” Carcieri said. “I don’t think people understand what we’re facing right now, if things don’t snap back. And everybody I’ve talked to says it’s not going to snap back quickly.”
One legislative leader at today’s meeting – House Majority Leader Gordon D. Fox of Providence – indicated that he agrees with setting aside the “cash assistance” portion of the anticipated federal stimulus money, rather than using it to plug the state’s budget hole.
“There are a lot of people that will say, ‘The federal government will swoop in and save us, so don’t do anything,’” Fox said. “But we understand that one-time hits are even worse in terms of solving the problems.”
The R.I. Economic Policy Council – formerly a standalone nonprofit corporation deriving its support from the private sector and the State of Rhode Island, and now an advisory council to the R.I. Economic Development Corporation (READ MORE) – is composed of leaders from the local business, university and government communities. For additional information, including the minutes of past Policy Council meetings, visit www.riedc.com/about/epc.
News and information from the R.I. Governor’s Office are available at www.governor.ri.gov. Information about the R.I. General Assembly – including the House and Senate daily calendars and listings of measures introduced each day – is available at rilin.state.ri.us.
Save? The “stimulus payment”?? Won’t be much of a stimulus then will it? Are you sure this was Governor Carcieri and not Herbert Hoover?