Home Economy State could close current fiscal year with $77M surplus

State could close current fiscal year with $77M surplus

By

Christopher Allen

-

11/18/2024

3bjqG9Gl-PMp1bnIn-statehouseext-696x385-1 — A NEW REPORT ISSUED by the R.I. Office of Management and Budget anticipates the state will end the current fiscal year with a surplus of $77 million./PBN FILE PHOTO/CASSIUS SHUMAN

PROVIDENCE – While there remains a lingering projected budget deficit of nearly $400 million during the next fiscal year, a report issued by R.I. Office of Management and Budget director Joseph Codega Jr. on Nov. 14 anticipates a current fiscal year-end surplus of $77 million. Revenue at the close of fiscal 2025 is now projected

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PROVIDENCE – While there remains a lingering projected budget deficit of nearly $400 million during the next fiscal year, a report issued by R.I. Office of Management and Budget director Joseph Codega Jr. on Nov. 14 anticipates a current fiscal year-end surplus of $77 million. Revenue at the close of fiscal 2025 is now projected to come in $68 million higher than previously estimated, a cushion thanks in part to the state starting off the current fiscal year $292 million in the black. In addition to the higher than previously expected cash collections, the budget office also revised down expected expenditures on medical and cash assistance and services for those with intellectual and developmental disabilities by $23.3 million. State budget officials have warned of a structural deficit that could reach $680 million by fiscal 2030 if current trends continue. The budget office continued its call for a "cautious fiscal outlook” for fiscal 2026, noting the $400 million shortfall "assuming continuation of current services." And payroll costs are creeping up, according to the OMB report. From a pre-pandemic peak of 14,253 state employees logged in January 2020, state employee levels dipped to 13,422 during the week of Nov. 6, 2021. The most recent tally shows total state government employment has returned to historic norms, reaching 14,270 as of early November, including an additional 67.5 positions in higher education, 20 positions at the R.I. Department of Human Services, and 19 at the R.I. Department of Corrections. “While the additional surplus projected in [fiscal 2025] provides some relief, continued fiscal discipline will be crucial to balance the [next] budget,” wrote Codega. “With record surpluses now behind us, it is even more important for the state to maintain discipline in its budgeting decisions. Our wise investments of federal and surplus dollars have helped Rhode Island avoid a recession, and our revenue growth continues to be stable.” Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.