Raimondo aims to spark ‘comeback’ budget
When it comes to municipal or state budgets, the winners and the losers are often defined by the bottom line.
Mayor Scott Avedisian wants to “protect” what the city has in state funding, whether it is more than $36 million for schools or payments in lieu of taxes (PILOT) for the Community College of Rhode Island and Kent Hospital.
Governor Gina Raimondo, on the other hand, is faced with a structural deficit of more than $200 million if she were to simply carry forward the current spending plan. She basically has two options: cut spending, which could mean the elimination of entire departments, or increase taxes.
To cover the shortfall would require increasing the state sales tax from 7 percent to 8.3 percent, she told The Economic Progress Institute and The Latino Policy Institute Tuesday afternoon at a meeting at Save the Bay’s office in Providence.
From what the governor told the two groups, she won’t propose either alternative when she presents her budget to legislators on March 12. She offered some clues of what she will be proposing both at Tuesday’s meeting and in a brief interview Saturday before participating at the Reading Across America celebration held by the Rhode Island National Education Association at Warwick Mall.
Raimondo wouldn’t say whether Warwick and other municipalities can expect to be level funded in her budget.
“My priority is to invest in job growth and development,” she said.
She said she has met with municipal leaders and communicated her desire for a “robust” economy. And as part of that, she said she would look to provide “tools” to cities and towns to enhance development.
“It’s a very difficult budget with very difficult choices,” she said Saturday.
That same message was communicated Tuesday. She prefaced her “comeback” presentation saying she welcomed input and suggestions on how to stop the decline and spark the comeback.
“I inherited a tough situation,” she said, “and I’m not going to sugarcoat it for you.” She said her “obligation” is to communicate what she sees in her plan and that “you don’t have to agree with me.”
Raimondo said the state’s economy “just isn’t producing the jobs.” She pointed out that the average income in Rhode Island puts the state at the bottom, and that almost 20 percent of Rhode Islanders’ income is “transfer payments” consisting of food stamps and other forms of assistance. Of the Rhode Island jobs created since the Great Recession, she said, 43 percent paid $60,000 or more, whereas in other states 65 percent were higher-paying jobs.
The governor said the state is being left behind, and better paying jobs are “rooted” in research and development.
Indicative of her support for education and initiatives – those “tools” – to promote development, she said, “If we don’t invest, we aren’t going anywhere.”
Where does that leave the city?
Mayor Avedisian said he has a “good working relationship” with Raimondo and met with her several times last week. He said their discussion on economic development focused on City Centre Warwick and what can be done to incentivize development. Avedisian offered no insights on what the governor may propose in funding for municipalities.
Larry Berman, spokesman for House Speaker Nicholas Mattiello of Cranston, said Tuesday it would be difficult for the speaker to comment on the budget until after it is presented to the General Assembly.
“[Mattiello] said he is committed to fully funding the increase in the public school funding formula, as scheduled,” Berman wrote in an email.
“The way to raise revenue is to get people to work,” Raimondo said Tuesday.
She said if the state could generate 6,000 new jobs paying $50,000 or more, it would realize an additional $140 million in income taxes.
“In my mind, that’s the only way to move forward,” she said.
To create good middle-class jobs, she said the Community College of Rhode Island should be “industry focused” to meet the workforce needs of business. She also believes everyone needs a college degree to get a well-paying job. She mentioned small business loans and will outline other business incentives in her budget.
Raimondo said DCYF and BHDDH – the Department of Behavioral Healthcare Developmental Disabilities and Hospitals – “are not well run departments, and you know that.” She said greater accountability and measuring of outcomes is needed.
“Too many are falling through the cracks,” she said.
The governor also said she is searching for a commissioner of education and welcomed suggestions. She didn’t get any names for commissioner, but Dr. Pablo Rodriguez thought she ought to put a more positive spin on Medicare, which she has identified as too costly and in need of reform.
“Everything is not as bleak and negative,” he said, pointing out that women and children are receiving some of the best care under the program.
Raimondo saw his point, but said, “There will be Medicare cuts in the budget.”
Joanne McGunagle of Cranston’s Comprehensive Community Action Program spoke of childhood poverty and suggested extending assistance beyond existing income thresholds.
“We need to look at support until they get into decent-paying jobs,” she said. “Child support payments need to be in place as they climb that ladder.”