PROVIDENCE – The House Finance Committee approved an $11.8 billion revised budget for the current fiscal year Tuesday evening, tapping the state’s “rainy day” fund and making program cuts to help make up for COVID-19-related revenue losses.
The original budget was $10 billion, including federal funds, as enacted in June of last year. The revised budget taps $125 million from the rainy day fund and makes use of federal funds but also includes program cuts and reallocations of funds committed last year. The committee vote was 13-3 in favor of the budget.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
The revised budget was necessary to cover a $250 million gap in the current fiscal year caused largely by revenue losses linked to the pandemic. The House said that state revenue also declined by $300 million amid the pandemic. The increase in the size of the budget was primarily due to increased federal funding to help cover virus-related expenses.
The House noted that the new budget also has to cover $1.4 billion in new unemployment claims, most of which is not be covered by federal funds.
The bill will go to the full House on Thursday.
The increased federal funds in the budget are, in part, a portion of the $1.25 billion allocated to Rhode Island from the Coronavirus Aid, Relief and Economic Security Act, which must be spent for federally approved purposes. CARES Act funding was allocated to school districts ($50 million from the state allocation in addition to $41.7 million originally provided in the bill) and used to cover government employees that have pivoted to COVID-19 response efforts ($35 million). Higher education institutions were also allocated a portion of the state’s federal funds, with $29.5 million from the allocation, allowing the state to reduce its originally planned funding by $15 million.
Reallocations of funds in the original budget include reassigning $17.8 million from the Rhode Island Infrastructure Bank, $300,000 in unspent funds from Department of Environmental Management bond issues, $500,000 from forfeited assets collected by the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, and $15 million from the Rebuild RI tax credit program.
“The COVID crisis devastated our economy and the lost revenue placed tremendous stress on the current year budget, forcing us to make many tough choices in order to balance our books by June 30,” said House Speaker Nicholas A Mattiello, D-Cranston. “Despite these difficult times, however, we reconfirmed our commitment to education, ensuring local schools have nearly $10 million more in resources than they were expecting. Once we receive further guidance on additional federal assistance to all states, we will work to enact a responsible budget for the next fiscal year with the appropriate investments in education aid, municipal assistance and programs to strengthen our economy.”
In a news release, the finance panel also noted that the state had to address $50.1 million in revenue losses at Eleanor Slater Hospital related to noncompliance with federal Medicaid rules, as well as other patients who could not be billed through Medicaid or Medicare as expected. The committee also said that unresolved prior billing issues account for another $14.6 million in costs and added that the state could face an additional $12.2 million in costs if the R.I. Executive Office of Health and Human Services does not meet a June 30 deadline to address the billing issue.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.
