House Finance easily passes budget proposal
The House Finance Committee voted 12-0 (with two abstentions) Tuesday to approve an $8.2 billion state budget that includes no tax or fee increases.
The proposal also provides additional money for cities and towns and will secure additional funding for higher education.
The budget bill, which is scheduled to go before the full House of Representatives Tuesday, June 25, takes into account the reduction of more than $30 million in resources caused by lack of revenue. However, it still includes funding for the historic tax credit, workforce development, and a 16-month trial period for tax-free liquor. The trial is to help Rhode Island package stores compete with tax-free liquor sales in Massachusetts.
The committee included the first $2.5 million payment on the bond issued for 38 Studios, an amount that was also included in Gov. Lincoln Chafee’s proposal. Major bond rating agency Moody’s Investment Service downgraded the bonds two notches earlier this week in response to debate by Rhode Island leaders over whether the state is obligated to pay. The service also threatened to downgrade the remainder of the state’s total of $2.1 billion in debt as well. Borrowing at a lower grade could cost the state more than paying back the loan.
As for economic development, the committee restored the tax credit on historic structures by using $34.5 million previously approved for projects that were never completed. While that part of the plan was included in the governor’s budget proposal, the House version also includes a $5 million per-project cap, proposed by House Speaker Gordon Fox in legislation he introduced earlier this session as part of the House leadership team’s package of economic development legislation.
The committee also included $4.5 million, some from federal sources, for workforce development. Among the programs included is a back-to-work program that would pair a person collecting unemployment with a business for training at no expense to the business. The company could then hire the trained employee if it chooses. Another plan included in the budget is a job match program to use a computerized system to match employers and job seekers, and identify skills gaps in the workforce.
The committee included an amendment submitted by the governor to create a pilot program to allow families receiving state-subsidized child care to remain in the program if their income increases to exceed the current limit of 180 percent of the federal poverty level, allowing them to earn up to 225 percent.
Another part of the House leadership’s economic-development package that was added to the budget bill is $10 million to start the revolving fund for roads and bridges. The package was sponsored by Fox and backed by Treasurer Gina Raimondo. It will establish a revolving loan fund to help municipalities perform major road repairs at a lower borrowing cost. The committee did not include the governor’s “streetscape” proposal to provide $10 million from the capital fund for roadwork.
In the tax-credit for liquor, beer was not included because Massachusetts requires a 5-cent deposit on each beer can and bottle, and Rhode Island does not.
Also included is a proposal to temporarily allow Newport Grand to keep a bigger share of video lottery terminal revenue generated there. The venue sought an additional $1.5 million for each of the next two years as a means to stay afloat as Twin River in Lincoln begins table games and casino plans in Massachusetts develop. The committee trimmed the proposal to $1 million a year. Newport voters last year rejected table games at that venue.
The committee’s plan for education continues to fully fund the decade-long phase-in of the education aid formula approved by legislators in 2010, at a cost of about $30 million in 2014.
To help Rhode Islanders afford a higher education, the committee concurred with the governor’s proposal to add $6 million to funding for the state’s colleges and university, in conjunction with a requirement that that tuition be frozen at the current level.
The Finance Committee also maintained the governor’s proposal to freeze the reimbursement rate for hospitals and nursing homes for one year.
To help the homeless, the committee included an appropriation from the capital fund of $1 million for renovation of Harrington Hall, a major shelter in Cranston, freeing up $600,000 that the House of Hope agency was going to use for those renovations for its regular expenses.