Rhode Island lawmakers unveil $9B state budget for fiscal 2018

R.I. HOUSE FINANCE Chairman Marvin L. Abney, left, with House Speaker Nicholas A. Mattiello, right, on June 15 unveiled the Democrat's $9.2 billion spending plan for fiscal 2018. / PBN FILE PHOTO/ELI SHERMAN
R.I. HOUSE FINANCE Chairman Marvin L. Abney, left, with House Speaker Nicholas A. Mattiello, right, last week unveiled the $9.2 billion spending plan for fiscal 2018 approved by the House on Thursday. / PBN FILE PHOTO/ELI SHERMAN
(Updated: 12:52 p.m.)

PROVIDENCE – Rhode Island lawmakers on Thursday unveiled a revised $9.2 billion budget for fiscal 2018, which includes broad-based spending cuts and new expenditures on such initiatives as free bus passes and college tuition at the Community College of Rhode Island.

The budget – totaling about $50.7 million less than what Gov. Gina M. Raimondo proposed in January – includes a $26 million cut to the so-called car tax, an initiative backed by House Speaker Nicholas A. Mattiello. It also includes about $3.3 million for a scaled down version of Raimondo’s college tuition proposal.

“We’ve been able to successfully reach a compromise that includes something of importance to each chamber and the governor and her administration,” Mattiello said during a briefing with reporters.

The multibillion spending plan, championed by House Democrats, passed out of the R.I. House Finance Committee early Friday morning. It’s the result of several days of closed-door negotiations between state leaders. The budget is said to close an estimated $134 million deficit over two fiscal years by cutting certain budget items, curbing new spending and slashing about $25 million in departmental spending, Mattiello said.

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An initial analysis also shows the Executive Office of Commerce will receive about $21.8 million less in funding during fiscal 2018 for a host of economic development initiatives created under the Raimondo administration, including the I-195 Redevelopment Fund and the Rebuild Rhode Island program. Real Jobs RI will remain intact, according to a spokesman. The governor originally proposed to add about $33.9 million to her economic development programs.

The speaker, making good on a campaign promise, successfully included a $26 million cut to the motor vehicle excise tax – better known as the car tax.

“It’s a regressive tax, it’s an oppressive tax, and we’re taking a well thought-out bite out of it,” Mattiello said.

The cut is part of a six-year phase out plan to eliminate the tax altogether, which would eventually leave a $221 million dent in state revenue by fiscal 2024, according to state estimates.

Mattiello’s phase out plan replaces an alternative plan originally proposed by Raimondo that would have cut the tax by 30 percent and resulted in a $55 million revenue reduction by fiscal 2019.

Raimondo, however, is slated to get some funding for a part of her tuition-free college plan, a hallmark of her political agenda this year.

The $3.3 million – $2.8 million plus $500,000 for administrative purposes in the first year – will eventually cover tuition for Rhode Islanders to attend two years of college at the Community College of Rhode Island. The plan – dubbed Rhode Island Promise – falls short of the governor’s original proposal to pay tuition for two years of school at all in-state public institutions, which would have cost $10 million initially.

The new plan is expected to cost about $6 million when fully operational, which is a far cry from the $30 million estimated for the original plan.

Despite the narrowed scope, however, Mike Raia, spokesman for Raimondo, was enthusiastic to see part of the plan moving forward.

“This is phenomenal,” he said. “Rhode Island is going to be the fourth state in the nation that offers tuition-free community college.”

Raimondo’s budget – originally proposed in January – became complicated last month when state officials calculated the $134 million deficit.

The deficit was announced after an estimated $100 million shortfall in tax collection – fueled largely by depressed corporate tax receipts – for fiscal 2017 and fiscal 2018.

The House budget includes a Raimondo proposal to cut $39 million from Medicaid spending, and approved a 50 cent increase to the cigarette tax, bringing the total tax to $4.25 from $3.75. The cigarette tax hike was the only tax increase in the budget, according to Mattiello.

The minimum wage will increase 50 cents beginning Jan. 1, and another 40 cents the following year.

The budget also included $3.4 million in new spending for the R.I. Public Transportation Authority to fund free bus passes for the elderly and low-income individuals for two years. The initiative was backed by Senate President Dominick J. Ruggerio.

The House budget passed out of committee on a 15-4 vote along party lines. It must now sit seven days before the full House can consider it for a final vote. In the meantime, House lawmakers can submit budget amendments.

Fiscal 2017 ends June 30.

Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman

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