Raimondo Budget Proposal Draws Praise - and Criticism
Friday, March 13, 2015
Rhode Island Governor Gina Raimondo's first budget proposal has drawn praise from supporters for its focus on the economy and education -- but drew sharp criticism from Republicans and taxpayer groups as to the government's role in job creation as well as creating new tax policy.
"[The Governor's] budget offers significant investments in growth and has no broad-based tax increases despite closing an inherited $190 million deficit," touted the office in a release on Thursday.
Read Raimondo's FY2016 Budget Address HERE
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"The budget Raimondo introduced makes progress on the structural deficit in two principal ways. First, the efforts to reinvent Medicaid are designed to control the amount we spend on our largest cost-driver, while improving the quality of care and protecting the most vulnerable citizens," continued the Raimondo office. "In addition, the focused investment in economic development-including renewed emphasis on education and skills training-are designed to reinvigorate our economy and create jobs, which will lead to greater revenue growth."
Critics however questioned the scope -- and reach -- of the proposal.
"Sadly, we see more of the same kind of policy culture that has put Rhode Island into such a rut: a government centric approach favoring certain industries and punishing the most productive contributors to our state," said Mike Stenhouse, CEO of The Rhode Island Center for Freedom and Prosperity. "The Governor has fallen into same trap as the General Assembly and her predecessors in recent decades - a voracious and insatiable thirst for more revenues and spending. What our state needs are dramatic cuts and a less intrusive government!"
Budget Details and Support -- Search the Budget HERE
The $8.6 billion tax and spend proposal by Raimondo calls for making strategic investments in what the Governor calls the "Ocean State WAVE" -- "Workforce development, Advanced industries and innovation, Visitor attraction, and Enterprise expansion and recruitment."
Addressing the General Assembly in the House chamber Thursday evening, Raimondo highlighted some of the key provisions in her budget, which included funding for universal full-day kindergarten across the state, eliminating the state income tax on social security benefits for lower-income senior citizens, and setting the frame work for substantial cuts to the state's Medicaid system
SLIDES: See Budget Winners and Losers BELOW
Reaction from a number of the Governor's Democratic colleagues was overwhelmingly positive.
"The budget has a number of bold investments in roads, infrastructure, and education which I believe are necessary to move Rhode Island forward," said Senate President M. Teresa Paiva Weed. "The greatest challenge we face is proposed cuts and cost savings to Medicaid. However the Governor has convened a team that brings the hospitals and providers to the table to work together to improve outcomes and long term savings, so year after we don't have to focus on short term cuts."
First-term Providence Mayor Jorge Elorza said he was encouraged by what he saw in the budget.
"This is a strong commitment to the economy, our schools, and our quality of life. As Providence succeeds, the state succeeds," said Elorza. "The initial assessment is it's a good budget for Providence. I look forward to working with the Governor and the General Assembly."
Pawtucket Mayor Don Grebien spoke to one aspect of the budget in particular that appealed to him -- which addressed his concerns about the likelihood of the Pawtucket Red Sox leaving the city under new ownership
"One of the things [the Governor's office] called me in on was that they wanted to make sure I knew about 195, and incentivizing the information district, and wanted to make sure it was clear to me - in case I didn't see - that the incentives weren't for stadiums," said Grebien, who has been vocal in his concern for the ball club's departure from Pawtucket. "It's a business decision. I just got a letter back from [new owner] Mr. Skeffington, we'll be meeting in the coming weeks. We wanted it to say in Pawtucket, the Governor wants it in RI, hopefully there's some compromise in between."
Republican, Taxpayer Groups Weigh In
Republican Mayor of Cranston Allan Fung -- who got over 36% of the vote in Rhode Island gubernatorial race last November to Raimondo's 40% -- said that while there were elements of the proposal he liked, the "devil was in the details."
"The fact that the Governor recognized the pain that had been previously inflicted on cities and towns, and what we've been told not inflict any additional pains and burdens is relief to us," said Fung. "The fact that she's continuing to fund the funding formula is a relief to a communities like Cranston that had been funding so much more of the education compared than in the past."
"From the 10,000 foot view, there are a lot of things that sound good, but the devil's going to be in the details to see where and how we're going to be able to pay for the programs she's looking for," continued Fung. "But from economic development -- I'm glad she adopted the infrastructure bank, which is something I had pushed forward throughout the campaign, that's needed to help revitalize the infrastructure needs around the state."
One of Raimondo's more controversial proposals unveiled on Thursday was her intent to impose a state property tax of $2.50 per $1,000 of total value on second homes assessed at $1.0 million or more.
"The statewide property tax on investment properties over $1 million - we not trying to protect out-of-state millionaires - but we all know once the mechanism is in place, to allow that tax to be administered, the temptation for future governments, not necessarily this General Assembly, to expand on that, is a problem," said House Minority Leader Brian Newberry. "I don't like creating another bureaucracy to create a new tax."
Meanwhile, taxpayer groups in the state said they saw in the budget things they agreed with -- and some not.
"Governor Raimondo has made some good proposals in her budget. We applaud her willingness to eliminate the tax on social security in certain brackets, on medical imaging and to cut the tax on commercial utility bills - a gratuitous burden on businesses," said Monique Chartier with RI Taxpayer. "Certainly, the governor's office should have flexibility in hiring state personnel and Governor Raimondo is showing leadership by cutting her own pay by five percent. We see evidence of her financial background in her plan to shrewdly take advantage of low interest rates and restructure the state's existing debt. And her proposal to repeal the licensing requirements for thirty professions is excellent and can hopefully be expanded."
But her proposal for increasing taxes, whether on health insurance plans, on a new, statewide property tax on second homes valued at over a million dollars, on cigarettes or on anything else, is a complete non-starter," Chartier continued. "Rhode Island has a spending problem, not a revenue problem, as evidenced by some of the highest taxes in the country and it is surprising that the governor, with her financial background, does not recognize this. Moreover, while the governor's tax increases are all too real, her spending cuts are mostly hypothetical place-holders. What will happen, for example, if her working group does not identify a way to cut $46 million in Medicaid spending next month?"
OSTPA's Pam Gencarella pointed out what she saw as a duality in the tourism cornerstone.
"While the Governor was eloquent and her speech passionate, this budget wasn't really much different from a Chafee budget - add more debt, recognize purported “gains” from government efficiencies, invest more in education with no proposed education system improvements, and, yes, more taxes," said Gencarella "They may not be broad based, but there are enough of them to hit everyone - B&B’s and certain other rentals, cigarettes, real estate, insurance and the “rich”. It is curious that B&B's would be taxed since they are a member of our tourist industry. This is counter-intuitive to leveraging tourism."
"Kudos to the governor for recognizing the travesty of RI’s own children leaving the state for greener pastures and our senior citizens leaving for tax reasons. But with the good comes the bad, like increasing the minimum wage for a fourth time. How can the governor state that she wants to create jobs and then hammer small businesses again, especially in light of the toll our winter has taken on them? Lifting the moratorium on school building is very important, but does that require another level of bureaucracy to be added? Do we really need a new school building authority? Numerous tax incentives appear as a desperate measure for a government that refuses to take control of the budget," continued Gencarella. "Picking winners and losers is not the government’s role. The best thing our government can do is reduce the cost of doing business, get out of the way, and let the free market take control. "
Related Slideshow: Raimondo’s Budget - Winners and Losers
Related Articles
- Leaders Call for More Diversity in Raimondo Administration
- Russell Moore: Raimondo and Snowstorm Politics
- Raimondo to Present FY16 Budget to House on March 12
- Raimondo Names 6 New 195 Commissioners
- UPDATED: Raimondo Nominates 5 to Board of Education
- Dr. Downtown, David Brussat: Raimondo’s Graffiti on the Wall
- Update: Raimondo Lifts Travel Ban Starting 8 PM, Providence Schools Closed Tomorrow
- Governor Raimondo Urges Residents to Continue to Stay Off Roads
- NEW: Lewis to Step Down, Raimondo Announces New RIDOT Chief
- Pam Gencarella: Where Does Raimondo’s Vision Put Us in Five Years?
- Raimondo Warns of Projected $500 Million Budget Deficit by FY19
- Winners and Losers in Raimondo Budget Proposal
- EDITORIAL: Governor Raimondo, Please Walk the Walk as Women Deserve It
- LISTEN: Governor Raimondo Tuesday AM Blizzard Juno Update
- Raimondo Declares State Of Emergency, Travel Ban for Blizzard Juno
- Raimondo Activates Adverse Weather Policy for State Employees
- Governor Raimondo Announces Pay Equity Tip Line and Website
- Kwan Among Four Named by Raimondo to RI Arts Council
- NEW: Raimondo Names New Rhode Island Department of Health Director
- NEW: Raimondo Budget Preview Includes $10 Million in Low-Income Scholarships
- Governor Raimondo to Launch Web-Based Open Budget Tool
- Governor Raimondo’s Budget Address, March 12, 2015
- Raimondo Announces Formation of Working Group to Reinvent Medicaid in RI
- Russell Moore: Raimondo’s Spot-On Budget Warning
