Budget Passes

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The House of Representatives voted unanimously today to approve a $6.89 billion budget for the 2009 fiscal year.
The proposal, which will now head to the Senate, will reduce state spending by $85 million from the current year to address the state’s deficit. The savings will be achieved without raising citizens’ taxes, but through state employee attrition, cuts to health and welfare programs, a $15 million total cap on the state’s movie production tax credit and increases in traffic violation fines.
The plan softens the blows to some programs hit hard under the governor’s original budget proposal, cutting fewer children from the Head Start early childhood education program and far fewer low-income adults from the RIte Care subsidized health care program. The proposal reduces the governor’s proposed cuts to Head Start from 400 children to approximately 154 and cuts 1,000 adults from RIte Care instead of the 7,400 the governor had proposed. Under the amended bill (2008-H 7390A), the annual income eligibility level for RIte Care will go from 185 percent of the federal poverty level — $32,500 for a family of three — to 175 percent — $30,800 for the same family. To help fund the program, the state will institute new rules requiring participants to use generic prescriptions whenever they are available.
The bill changes the limit for welfare benefits from five years to 24 consecutive months in any 60-month period, with a lifetime total benefit of 48 months. Those who have reached the 48-month limit would be allowed a twelve-month extension if they are employed.
The version approved by the Finance Committee yesterday also adds a total of $13.6 million in education aid to cities in towns through new revenue from 24-hour gaming, and restores $300,000, about half the funding that the governor planned to cut, from the free breakfast programs in schools.
It keeps state aid to cities and towns at the level set through a reduction earlier this year, but adds a new provision that prohibits municipal health-care contracts from requiring the use of a specific health care provider. Municipal leaders sought the change to allow them to use whichever insurance provider will cost them less.
The budget increases payments to hospitals for uncompensated care by $9.6 million and payment to community health centers by $1.2 million.
It also includes issuance of $87 million transportation bonds, but cuts issuance of $35 million bonds for open space and $15 million for water pollution reduction efforts.
The plan includes a $91 million savings on state personnel, some of which is expected to come from a large uptick in retirements due to upcoming changes in state retiree health benefits. Specifics on other measures to produce the savings will be negotiated with state employee unions.
It reduces pensions for judges hired after Jan. 1, 2009 to 90 percent of their salary after 20 years on the bench, instead of the current 100 percent, and 70 percent for those with 10 years, instead of 75 percent. The amount would be reduced further if the judge opts for a spouse to continue getting a portion of the pension after his or her death.
The legislation increases a tax paid by insurers on medical and dental premiums from 1.1 percent to 1.4 percent to raise about $5.6 million in revenue, and includes $67 million savings through changes to Medicaid that will depend on the receipt of a waiver from the federal government.
It cuts $17 million in funding from the state’s public college system, and reduces need-based scholarships by $2.6 million.
The Senate is expected to vote on the budget bill Friday, after a hearing before the Senate Finance Committee tomorrow. The governor has indicated his support for the bill.

Amazing that, after so much groaning over the governor’s tough cuts simply to reach the deficit amount, the House was able to “soften” his efforts and still come in under the line, no?

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