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Raimondo’s Economic Priorities Take the Biggest Cuts in the New Budget — Over $20M

Sunday, June 18, 2017

 

Governor Raimondo and Commerce Secretary Pryor

Pound for pound, the agencies that saw the biggest cuts in the fast moving FY 2018 budget contain Governor Gina Raimondo’s economic initiatives.

Combined, Commerce RI and the I-195 Commission absorbed more than $20 million in cuts in the House finance budget released this week, versus what the Governor proposed.

The cuts to the economic programs seemed to take both the Governor and Commerce Secretary Stefan Pryor by surprise when they emerged this week during the negotiations.

 

Budget Reactions 

“We will be reviewing the budget through the weekend and early next week,” Matt Sheaff, spokesperson for Commerce, on Friday afternoon.

The cuts hit I-195 hard. The commission was trimmed $8.1 million from what the Governor proposed.

Similarly, two of Raimondo’s most cherished programs - Rebuild RI and Wave Maker - were slashed by $7.5 million and $1.5 million, respectively.

 

Wexford presentation before the Commerce Corp

Almost all of the Commerce programs were cut:

Wavemaker reduced $800,000

University Research Collaborative reduced $150,000

P-Tech reduced $1,200,000

Rebuild RI reduced $7,500,000

National Security Infrastructure Fund $200,000

Municipal Technical Assistance Fund reduced $250,000

Main Streetscape reduced $500,000

Innovation reduced $1,500,000

I-195 Development Fund reduced $8,100,000

 

To date, Rebuild has obligated $83 million of its $150 million cap, although few of those projects have broken ground.

Questions to Raimondo’s office about the cuts to I-195 Commission and Commerce were not responded to on Friday.

 

Mayor Allan Fung

Raimondo's Commerce Strategy Under Attack

Last week, Cranston Mayor and GOP front-runner for Governor Allan Fung said on GoLocal LIVE:

"How do you have at least a $90M revenue shortfall? Most likely you overestimated on your budget, and on top of that, let's not forget the overspending by more than $30 million -  so that total deficit is closer to $135 million," said Fung.

"But here's [what] I call really failed and weak leadership from the Governor. Unless we get a new Governor in place that's willing to tackle and implement strong financial policies, we're going to be in trouble again, year after year, " said Fung, accusing Raimondo of not "rolling up her sleeves, like we've done in Cranston."

Fung's criticisms mirror former Governor Lincoln Chafee’s critiques. 

In February, while appearing on GoLocal LIVE with GoLocal News Editor Kate Nagle, Chafee said the Raimondo’s transfer of taxpayers dollars to billion dollar companies such as General Electric and Johnson & Johnson was flawed.

“I have never liked corporate welfare. It's unfair to existing businesses…some out of state business comes in and you give them the candy store. I just don’t like it," said Chafee.

Chafee said the approach needs to be built on fundamentals. 

“I think a better way to build the economy is through investment and education and infrastructure. Then lower taxes -- under my approach, unemployment went from over 11 percent to under 6 percent. (And) we created more jobs than the candy store approach.”

Chafee said he was disappointed that millions of dollars “out the window to General Electric and J&J. I don’t like it.”

 

Governor Raimondo

Raimondo’s Good News

Raimondo got some good news this week. 

For the first time in three months, Rhode Island added jobs. The number of employed RI residents was 532,700, up 1,100 from the April figure of 531,600. Over the year, the number of employed RI residents was up 10,200 from May 2016.

The RI labor force totaled 555,500 in May 2017, unchanged from April 2017 and up 2,900 from May 2016, according to the RI Department of Labor and Training.

“"The investments we've made in job training, education, infrastructure and economic development are working. Thanks in part to the Rebuild RI initiative and RhodeWorks, we've added 2,300 construction jobs in the last year - more than any other sector. In fact, one out of three new jobs created in Rhode Island in the last 12 months has been in construction,” said Raimondo.

 

Related Slideshow: FY18 House Finance Budget

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WINNER

CCRI

The state's community college is poised to be the sole beneficiary of the Governor's Promise scholarship program.

It would make Rhode Island the fourth state to have tuition-free community college, allowing every resident the opportunity to earn an associate's degree tuition free. There is no means testing for the program and few standards.

The cost would be roughly $3 million in the FY18 (for the first cohort of students) and then $6 million the following year there are two classes. 

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LOSER

State Government 

As part of negotiations -- and the fiscal realities facing Rhode Island with a nearly $140 million shortfally, the Speaker announced Thursday that $25 million will be cut in general spending.

"It's something we discussed with the Governor and she thinks she can make [it] work," said Matteillo. 

Also on the chopping block -- funding for the legislative office to the tune of $2 million. 

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WINNER

Elderly and Disabled Bus Riders 

After levying fares on some of the most needy RIPTA bus riders (the elderly and disabled) for the first time this past year, which resulted in strong public outcry, the House Finance budget contains just over $3 million  -- for each of the next two years -- to refund the program this coming year. 

WATCH: Opponents of RIPTA Fare Hikes to Rally at RI State House Wednesday Afternoon

Mattiello noted that after the two years is up, it is up to the Governor to find the funding. 

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TIE

Governor Raimondo

On Thursday, Raimondo learned she is poised to get a piece (jCCRI) of her free college tuition proposal, which had been a major focal point of her budget proposal - and political strategy. 

On the flip side, she is tasked with finding $25 million in government spending to cut, in order to balance the budget. 

Unlike the May estimating conference, where Rhode Island revenues were found to be off nearly $100 million plus, the Governor can't say she didn't see this  coming.

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LOSER

Medical Marijuana Expansion

In June, Raimondo called for an increase in medical marijuana dispensaries and an increase in licensing fees to generate $1.5 million in revenue for the state. 

She called for "no less than six licensed compassion centers."

On Thursday, Mattiello said it was not in the budget, due the proposal's late timing.

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WINNER

Davies High School

The House finance budget contains additional help for manufacturing, including $3.6 million to upgrade facilities at Davies Career and Tech.

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LOSER

Commerce Corporation

While Mattiello made scant mention of cuts in the briefing Thursday - save for the $25 million out of government spending -- the question was raised as to where the rest of the $140 million shortfall will come from. 

"Millions in cuts came from the Commerce Corp budget. The budget kept the Rebuild RI funding, but money for several other Commerce programs were reduced," said Larry Berman, spokesman for Mattiello. 

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TIE

Mininum Wage Hike

Workers will be happy, employers might not. 

The FY18 budget proposal calls for a $.50 minimum wage increase as of January 1, 2018, and then an additional $.40 the following year.

Business owners have continuously fought against such hikes. 

 
 

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