House Minority Leader Brian Newberry's View of the Budget

Rhode Island House of Representatives Minority Leader Brian Newberry (who prior to the last election, by the way, scored 10 out of a possible 10 in the Anchor Rising legislative ratings, which were based on fiscal and governance issues) has posted a review of the state budget to his State-Rep Facebook site.

Rep. Newberry offers this official position on the budget in its current form...

As I write this I have not yet had the opportunity to consult with all the members of the Republican caucus. I think it would be improper as the Minority Leader to take a public position on the budget at this time. As noted, there are many things about this budget that are a net positive for the state. There are also things that are a net negative. The biggest negative lies not in what the budget does but in what it fails to do. The ultimate question is whether should this budget fail to achieve the necessary votes in the House for passage, the resulting alternative would be an improvement.

I begin with the conclusion because this update will be lengthy. As detailed below, I believe this to be a flawed budget. That said, there are numerous provisions in this budget which represent sound public policy. There are indeed several items in this budget that Republicans have been pushing for, in some cases for years. There are also some not insignificant social services spending cuts in the budget. They are not as deep as I would advocate. Nonetheless, they are a step in the right direction. There are also certain structural reforms that will allow municipalities more flexibility in their budgeting. There is also an end to the "longevity increases" paid state employees that have been the subject of so much controversy this spring.

Most importantly, this budget completely rejects the philosophy of Governor Chafee. His $165 million proposed sales tax increase has been eliminated. Unfortunately, there are $17.3 million in proposed tax increases related to several relatively minor items. Considering that the projected deficit two months ago was $331 million, it is hardly a bad thing (if imperfect) for a budget proposal to close that gap while including only $17 million in tax increases.

Finally, unlike far too many budgets passed by the Assembly in recent years, this budget (for the most part) does not rely on one time revenue sources and gimmicks. All budgets seem to have some, shall we say, rose colored projections on the margins, but there is no tobacco money, no so-called “stimulus” funding, no sale of state properties, no sin taxes that will raise less money than projected because they kill the affected industry etc. etc. Instead, it is an attempt to begin to grapple with some long term issues.

Unfortunately, there are several items missing from the budget that I would have liked to see. To use a cliché, the proposed budget closes the deficit primarily by taking a scalpel to any number of different state programs and agencies where in my view a meat cleaver would have been more appropriate. For example, based upon information we obtained through the Department of Health and Human Services, changing RIte Care eligibility for adults from 175% of poverty level to 133% of poverty level would have saved $15 million in the coming fiscal year (originally incorrectly reported as $26 million) with larger savings in projected years. Likewise, cutting a variety of optional Medicaid services and providing Medicaid in accordance only with federal mandates, would have saved $75 million in the coming fiscal year with again increased savings in years to come. Other potential savings included nearly $11 million with widespread cuts to the legislative and departmental grant programs. These include not only the notorious "legislative grants" but cuts to a number of community service grants that are routinely provided through different state agencies on an annual basis. The actual budget trims these grant programs by 10% across-the-board from department to department but elimination of most of them would have led to far more significant savings. In addition, the budget also includes increased spending in a few areas suggested by Governor Chafee. In my view some of these actually make sense from a policy point of view but I am not certain that this is the economic and fiscal climate in which to enact them. In short, the tax increases in the budget are not necessary from a policy point of view – though they may be necessary from a political point of view to get the necessary votes for passage from enough Democrats.