The Budget Hole Rhode Island’s In

Sympathy is in order for the state’s lawmakers, although not of the exculpatory kind. It must seem to them that, no matter what they do, the economic dirt keeps falling in on them in the economic hole that they’ve dug:

Rhode Island government’s budget deficits have grown by $200 million over the last six months, a massive jump that exacerbates an already-staggering budget hole and intensifies pressure on the General Assembly to raise taxes or slash state spending across a host of popular programs.
Elected officials have less than two months to close combined budget holes totaling roughly $661 million, according to projections finalized Monday by the state’s top budget officials on the final day of the semiannual Revenue and Caseload Estimating Conference. The shortfall includes an unanticipated current-year gap of $70 million and a $590-million deficit for the fiscal year that begins July 1. …
Next year’s hole amounts to approximately 19 percent of Rhode Island’s current state budget, excluding federal dollars.

If you add in what’s become a typical mid-year deficit in the hundreds of millions, the shortfall for fiscal 2010 hovers near a billion dollars. Upwards of a fifth of the working budget is money we don’t have. But hey, it’s not as if nobody’s seen this coming. In fact, in considering an interviewer’s question about the impetus behind Anchor Rising’s founding back in 2004, I recalled that our prognostications for the state made action a civic imperative.
The state is reaping what it’s sown, and those who’ve liked the policies that got us here just fine have but one scapegoat before they must begin battling each other for the trickle of satiating largess for their unhealthy dependency:

“We are paying the price not only for national and international economic factors, but also for years of misguided decisions by our policymakers that have cut taxes for those who need cuts the least, while increasing the pressure on the rest of us,” Peter Asen, spokesman for the labor-backed advocacy group Ocean State Action, said in a statement.

As satisfying as some may find the class warfare angle, the reality is that income tax revenue from “those who need cuts the least” has gone up dramatically, with $228 million more paid by those with incomes over $100,000 in 2006 than in 2002, with $156 million more coming from those with incomes over $200,000.

Rhode Island must push the likes of Ocean State Action aside and do what so clearly must be done.
Cut taxes. Trim mandates. Lighten regulations. And quick.

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