PROVIDENCE – The House Finance Committee on Friday quickly approved a record $14 billion state budget for next fiscal year that includes millions of dollars in new funding for education and the state’s life sciences industry but leaves out a sales tax cut proposed by Gov. Daniel J. McKee.
“It will go to the [House] floor for further debate,” said committee chairman Rep. Marvin J. Abney, D-Newport, after the 13-3 vote that followed only a handful of questions by committee members during a quick briefing by House Fiscal Advisor Sharon Reynolds.
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Larry Berman, spokesman for House Speaker K. Joseph Shekarchi, said the full House will take up the budget plan on June 9.
McKee’s spending plan was a 43.7% jump from fiscal 2019, driven by the infusion of federal funding connected with the pandemic, according to a recent analysis by the nonpartisan Rhode Island Public Expenditure Council.
Though the House version surpasses the costs of McKee’s proposed budget, notably, a cornerstone of his proposal didn’t make the cut: a 0.15% reduction to the state sales tax; suspension of the scheduled increase in the gas tax going into effect July 1; $25 cut to the corporate minimum tax or the exemption from the sales and use tax for the trade-in value of trucks with a gross weight of 14,000 pounds.
The budget plan does not include funding for iGaming expansion, the Tidewater Landing soccer stadium project, additional nursing home staffing, the “Superman” building redevelopment in Providence, or free school lunch in K-12 public schools.
Also not making the cut was $25 million McKee proposed for the South Quay marine terminal. Shekarchi noted the $35 million in unspent allocation to the project in the current-year budget and said he would like more information from the developers before committing more resources.
The House version does include funding for Attorney General Peter Neronha’s request to create a Cold Case Unit. There is money for 15 additional staffers sourced from legal settlement dollars secured by Neronha’s office, said Shekarchi.
And the House budget fully funds the newly created Department of Housing, adding 21 additional employees.
“Nobody got everything they wanted,” said Shekarchi on Friday.
State leaders came to agreements on a $45 million life sciences initiative championed by the speaker, a $50,000 exemption to the tangible tax, increased funding for higher education, and both McKee’s RI Ready municipal road funding program and a proposed cybersecurity institute at Rhode Island College.
“There are an awful lot of asks every year and you have to balance [them],” said Shekarchi, noting a predicted economic downturn later this year and the revised estimates released in May that downgraded expected revenue this fiscal year by $61.2 million. “As long as I’m the speaker, we are going to have a balanced budget.”
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
I’m sure they could have easily cut out $1 Billion if they really tried.