Proposed Supplemental Budget: Raise Gas Tax, Postpone Pension Reform

A group of lawmakers (House and Senate Finance Committees? can’t tell from this ProJo article – not that I’m complaining! I’m glad for any coverage) has agreed on a supplemental budget for the current fiscal year, which they will vote on tomorrow, presumably setting up a vote soon by the full House and Senate.

House budget-writers are poised to vote tomorrow on their own version of Governor Carcieri’s $357-million deficit-avoidance plan for this year, and if an agreement reached by House and Senate leaders earlier this week holds, it will add a 2-cent hike in the gasoline tax to the mix, while leaving pension cutting decisions to another day
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It appears the agreement also scraps Carcieri’s plan to restore millions of dollars in aid to cities and towns. On education, it calls for a complicated formula that uses federal stimulus funds to supplant about $38 million in state money. Ultimately, the only noticeable change to local school districts would be the proposed elimination of about $9 million in education aid …

While we may not all agree with his suggestion for dealing with Rhode Island’s public pension liability, most of us would probably like to associate ourselves with the comments of the honorable gentleman from Tiverton on the proposed gas tax hike.

Taking aim at the gas tax-hike, House Minority Whip John Loughlin, R-Tiverton, said: “The last thing we need to be doing in a situation where we have double-digit unemployment is increasing taxes of any kind, especially taxes that people who get up every day and go to work have to pay at the pump every day to commute to the few remaining jobs we have in the state.”

And what about badly needed reform to public pensions?

[Senate Finance Committee Chairman Daniel] DaPonte said there will be action on the “pension-reform” front before lawmakers go home this year, but there were so many questions about Carcieri’s savings assumptions that House and Senate leaders decided to hold off.
“It is going to happen, but it’s only going to happen with real numbers after real in-depth study which we are in the process of doing now,” he said.

Yes, technically, actuarial consultants are still in the process of toting up the specific savings that would be realized if the recommendations (aggressive by Smith Hill standards; moderate by any other) of the Pension Commission appointed by Speaker Murphy are implemented. But we know how this book ends. Rhode Island faces one of the biggest unfunded pension liabilities in the country, a liability so great, as it stands now, it cannot be paid. Adjustments must be made. Doesn’t every year that goes by without them make it that much harder to fix the problem? Wouldn’t it be better to implement some adjustment, admittedly modest and inadequate, now and implement the final reform when the numbers come back?

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Mike Cappelli
Mike Cappelli
14 years ago

Why change now? The morons in the legislature are doing what they have always done. Kick the can down the road.
I have always maintained that this stimulus money is nothing more that a trojan horse for RI. All it does is allow them to, once again, avoid making the tough decisions. Unfortunately for Rhode Island, this is akin to simply giving morphine to a cancer patient. It makes the patient feel good for now. Unfortunately, the tumor continues to grow, at an accelerated rate, and the reality of an undeniable date with destiny becomes all the more severe.

14 years ago

Mike’s right, but I think it is a good thing that they’re given another band aid for this year. It’s not an election year. Next year is an election year. The structural problems won’t be fixed, the pension issues will be another year further down the toilet. If the GOP doesn’t grab this opportunity by the throat, then it truly is a dead organization. If this sort of budget passes where there is no real reform, then every single person who votes for it needs to take ownership of it and make the 2010 elections a referendum on the budget.
We’ve said before that there is no more tobacco settlement money coming. But there was. This stimulus money. So I’ll say without great conviction, there is no more stimulus/tobacco money coming for next year’s budget. Let’s see them close the holes and fix the structure without that “free money”.
It also seems that there are a lot of Assembly members interested in the Lt. Gov seat. They’re fleeing the budget discussion and their votes on it. They know it stinks and can’t run away from it fast enough

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