Rhode Island Governor Proposes Pumping Money into Public Works, Colleges

January 16, 2014

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Governor Chafee proposed a new $8.5-billion budget Wednesday that would set the stage for cutting the state’s 9-percent corporate tax rate to 6 percent, freeze state college tuitions and pump hundreds of millions of dollars into new, legacy-building public works projects, including the repair or replacement of 834 bridges.

He told lawmakers that his fourth — and final — budget is aimed at making sure Rhode Island becomes a “better place to raise a family, find good jobs and grow the business community.”

“By nearly every measure, Rhode Island is steadily moving forward,” he said in an upbeat letter he delivered to the General Assembly, which will consider his plan. “Our economy is picking up steam and households are on better footing than they were three years ago. This is good news, but we must keep up the momentum.”

There is no new money in his budget proposal for state employee raises, funding for the Affordable Care Act’s health insurance marketplace after the federal money runs out, or any potential settlement of the state’s high-stakes court fight with public employee unions over the legality of the sweeping 2011 pension overhaul.

And there is no mention of Sakonnet River Bridge tolls, which, barring legislative intervention, will rise automatically on April 1.

But Chafee, one of the first backers of the secret, court-ordered mediation efforts currently under way, left no doubt of the risk the pension fight poses, if the state loses.

“There is no question that the savings derived from the reforms ensure that the [state] … can maintain desired levels of services, programs and staffing necessary to deliver quality services to Rhode Islanders,” he said in the 118-page executive summary of his proposed budget.

And he included $12.3 million for the next payment due the investors in the state-backed bonds that financed retired Red Sox pitcher Curt Schilling’s now-bankrupt video-game venture, 38 Studios.

The balance of the $12.5-million required payment would come from a reserve.

Anticipating that this payment would again make the 38 Studios debacle a lightning rod for controversy within the legislature, Chafee made this case:

“While the cost to taxpayers is distasteful … Ratings agencies, the capital market, businesses and others will turn away from Rhode Island and never look back” if the state reneges on this “moral obligation.”

Chafee, who is not seeking reelection, is seeking to raise overall spending by Rhode Island state government by more than $330 million from an approved $8.2 billion this year to $8.54 billion during the budget year that begins on July 1.

View Full Story From The Providence Journal