Will a $450 Million Budget Deficit Wake ‘Em Up?
No one should be surprised that the State is looking at a $450 million shortfall for FY08. Governor Carcieri has been warning us that we would have to cut State programs and payrolls in the near future. Turns out his idea reduce state spending by $200 million was based on a downright rosy forecast.
Knowing there would a deficit, [Governor Carcieri] had already proposed a sweeping plan he says will save $100 million by cutting the state’s work force by 1,000 jobs. He also plans to save $50 million by reducing employee benefits and another $50 million by cutting or consolidating social-services programs.
It is now clear that he will have to do much more to propose a balanced budget, which he must do by law.
“Governor Carcieri has been sounding the alarm about the state’s budget situation since before the end of the last legislative session,” said the governor’s spokesman, Jeff Neal. “Unfortunately, it is now clear that implementing the governor’s spending-reduction plan is just the start of what is required to resolve Rhode Island’s growing budget crisis. Every branch, department and office of state government must work together to solve this problem.”
But will they finally listen? Instead of working with him, the legislature has decided to nitpick and nibble around the edges of our bloated State government. For their part, the Courts and AGs office have simply said, “Sorry Guv, look elsewhere for cuts.” Time to grow up, folks.
Of course, we all know that the first “idea” floated will be tax increases. No surprise at the source:
“The national economy is weak. It’s not the state’s fault it’s weak. But it’s become the state’s problem,” said the Poverty Institute’s chief economist, Ellen Frank, one of the few members of the public to attend yesterday’s meeting…Overall, the forecast is so bleak, Frank said, that the state must do more than cut spending.
“Facing these kinds of deficits, we need to look at every possible source of revenue we can,” she said, calling on lawmakers to reconsider tax cuts to high-income Rhode Islanders such as the recently instituted flat tax and the phase-out of the capital-gains tax.
But even if this oft-repeated “strategy” was implemented, it still wouldn’t make up the difference. Sorry Ellen, time to make some cuts.
“Raising taxes on Rhode Island’s already overtaxed citizens is not the answer,” [governor’s spokesman, Jeff] Neal said.
I’m not holding my breath yet. I suspect that, instead of dealing with the structural problems caused by too much government, the General Assembly will continue to take a short-term view and cut various capital projects in the hopes that some sort of fiscal miracle will occur next year. For his part, the Governor has already scaled down the plans for new State Police Barracks, with the blessing of superintendent of state police, Col. Brendan Doherty. That is the sort of leadership the state needs right now. So far, no one else is stepping up to the plate.
With a $150-million budget hole this year — and a potential deficit three times that size next year — each state agency was originally asked to shave 10 percent or more off their projected spending for the fiscal year that begins July 1. All were required by law to submit their spending and cost-cutting plans to the state Budget Office by Oct. 1, but few did.
As of yesterday none of the large state agencies — including the Department of Human Services, the Department of Mental Health, Retardation and Hospitals, and the Department of Children, Youth and Families — had submitted a plan. And the budget requests from the courts and a handful of smaller state agencies come at the projected multimillion deficit from 180-degree angles.
From the judiciary, for example, came a proposal to spend $1.5 million this year and next replacing ceiling tiles and light fixtures in the Garrahy Judicial Complex. The explanation: “The distraction of discolored ceiling tiles and inefficient lighting diminish the public trust and confidence in the judicial building in [that] its current physical state is less than reverent.” The judiciary is also pursuing plans to build a new Blackstone Valley courthouse.
Other agencies are looking at fee hikes and retrenchment.
And others are complaining:
Public Defender John J. Hardiman, for example, said the restraints placed on his agency would necessitate a 20-percent cut in staff, which, in turn, would render his agency “unavailable for legal representation in any parental-rights cases statewide, or any juvenile case statewide or any proceeding alleging a violation of felony probation in any Superior Court.”
By now, we should all realize that this is about more than just making cuts or raising taxes. Hopefully, this projected deficit will cause a paradigm shift in the ongoing budget debates. As Jeff Neal said:
“…we need to decide what amount of state government Rhode Island taxpayers can afford. Implementing an affordable Rhode Island will take leadership and tough, sometimes unpopular decisions. Governor Carcieri looks forward to working with the General Assembly and with other branches of state government to make those difficult choices.”
It’s about time the rest of our State Government wake up from their dreams of unchecked government growth and join the Governor in working towards a long term solution.