April 6, 2009

Fiscal Policy

No End to the State's Financial Problems in Sight

Carroll Andrew Morse

Steve Peoples serves reminder in today's Projo that the passing of a supplemental budget hardly even qualifies as round one in Rhode Island's continuing fiscal crisis...

The business-backed Rhode Island Public Expenditure Council analyzed both sets of out-year figures and concluded that the legislature’s projections -- showing an average annual deficit of $462 million through 2014 -- are more accurate than the governor’s, which estimate the annual hole at $360 million.

The difference is largely attributed to assumptions in the projected growth of Medicaid programs, which annually consume more than $1.9 billion in state and federal funds. The governor’s budget office assumes Medicaid will grow at approximately 6.5 percent annually, while the House fiscal office used the nationally recognized projection of 7.9 percent, according to RIPEC’s policy and research director, Susanne Greschner...

The out-year projections already assume sweeping changes in the public pension system for teachers and public employees, a redesign of costly Medicaid programs and the permanent elimination of general revenue-sharing for cities and towns.

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$462m even WITH all of those cost-cutting measures implemented??

We are in real trouble.

Posted by: Monique at April 6, 2009 10:34 PM

Thank God for this trouble.

The General Assembly has always avoided any reforms to the cronyism and patronage system in this state. The best tactic they have used over the decades has been to always cut the meat in the budget but always protect the (politically connected) fat--this way any budget cuts hurts the taxpayers and deters them from demanding any further cuts. Works like a charm. Example: when it comes time to make budget cuts you cut school lunch programs and/or close a public pool rather than lay off State Senator Buttkiss's criminal-record-expunged nephew from his six-figure no-show job as assistant deputy administrator to the deputy administrative assistant.

I'm sick of a state where govt'l workers in their mid-forties can retire in excellent health at almost full pay and with full medical benefits. I particularly love it when these guys register their cars in Florida and spend of their days collaring people to bitch about high taxes and the lack of work ethic today.

The recession is the necessary kick in the front door which will hopefully cause the entire rotten structure to collapse.

Posted by: GordonFoxy at April 8, 2009 8:54 AM
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