PROVIDENCE – The state faces a nearly $800 million shortfall in revenue between this fiscal year and next, according to estimates released Friday that show the economic devastation of the pandemic.
The figures include a $280.9 million reduction in the current fiscal year, which ends June 30, compared with what the state thought it would receive when budget analysts last met in November.
The picture is even bleaker in the next fiscal year, where revenues are expected to plunge by another $515.8 million.
The losses are compiling because the three largest sources of revenue for the state’s general fund are income, sales taxes and lottery sales — including from slot machines at the two Rhode Island casinos. All have taken a hit through state-ordered or voluntary business closures, unprecedented job losses and reduced spending by consumers.
“Those are all three items directly impacted,” said Thomas Mullaney, the state budget officer. “The closure of the casinos, well that just wiped out that money. We were getting $30 million a month from there, coming in. Our estimates assume they will reopen, but slowly over time.”
In January, Gov. Gina M. Raimondo released a $10.2 billion budget proposal. Up until March, when the COVID-19 pandemic started affecting Rhode Island businesses and employment, the state was trending above its initial estimates for revenue, Mullaney said.
The cumulative deficit outlined in the revenue-estimating work is unprecedented, said Mullaney, who’s worked in the office since 1987.
The House Finance Committee is scheduled to resume its deliberations on the state’s fiscal 2021 budget next Thursday. In a short statement Friday, its chairman, Rep. Marvin L. Abney, D-Newport, said the work would continue.
“The results of today’s revenue conference reinforce the magnitude of the current crisis,” he said. “However difficult it may be, we are prepared to rise to the challenge of ensuring that the state meets its obligations for essential government services, while mindful of the hardships already facing so many Rhode Islanders.”
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
