Governor Carcieri Defends Budget

Governor Carcieri was on WPRO's John DePetro show to defend his budget (primarily against the ProJo coverage of it). The ProJo reported that there was a 10% increase in this budget over last, but the Governor explained that the increase is all federal money and most of it is attributable to an increase in unemployment benefits. Further, the Governor explained that this budget is less than that in 2008. In short, STATE revenue expenditures are down. (The ProJo stated later in their story piece that state expenditures did go down $197 million).

As to the assertion that he took the easy road by relying on stimulus money, the Governor claimed there are structural changes in budget that need to be made (reforming government, tax cuts) so the state will be well-positioned once the stimulus runs out. The point of the stimulus is to create a bridge to the future for the state and help balance the budget in severe times. It is not permanent, but it buys the state time to make structural changes.

In response to criticism from Rep. Steven Constantino that he didn't make hard decisions, Governor Carcieri pointed out that the legislature needs to move on his 2009 budget, which includes such reform as removing State-level mandates and includes statewide health care reform. Instead, they're doing nothing. (DePetro pointed out that the Governor's proposal to bring an end to 3% COLA for retirees and implementing retirement-at-59 are hard decisions).

Additionally, Constantino alluded to "significant changes" and the Governor expects the House to revise his budget. But if a major revision includes a tax increase, he's not going to stand for that and urges Rhode Islanders to be ready.

According to the Governor, the bottom line is that we need to run our state and local government more efficiently. We need competitive taxes and are generating more than enough revenue to offset tax cuts. Finally, the state needs to be competitive and attractive to the private sector so we can "grow the pie" and keep workers, businesses and retirees in the state.

ADDENDUM: The Governor also took issue with comments made by Rep. Robert Watson (R -East Greenwich) in the ProJo story:

I am disappointed that this budget apparently is reliant upon raising taxes in order to balance a budget. I will not support balancing the budget on the backs of those men and women that get out of bed and go to work everyday for a living.

Governor Carcieri claims he doesn't know what Watson was talking about. Rep. Watson called into DePetro's show and stated that the Governor should know what he's talking about. That while he has supported the Governor--and continues to do so in many ways--he can't support the Governor's taxation plan because it hurts the middle class with such things as raising the cigarette tax and raising fees on citizens. Most important (as Justin noted), is the new income tax structure that helps the very bottom and top but hurts the middle class by taking itemized deductions away and actually raises the income tax rate for the middle tiers.