RI House Approves Record $9.6B Budget, PawSox Bill Posted for Tuesday Hearing, Frias Awaits

Saturday, June 16, 2018


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Steve Frias and Nick Mattiello, a 2018 rematch?

As GoLocal LIVE’s fiscal expert Gary Sasse called it earlier in the week — it is an election year budget — and it was passed by the House of Representative 66-7 just before 10 PM Friday night.

The budget now goes to the Senate and may be caught in a game of cat-and-mouse between Speaker Nick Mattiello and Senate President Dominick Ruggerio relative to trading the budget for the passage of now-House pending PawSox legislation.

Late Friday night, the House version of the PawSox funding scheme was quietly posted for a Tuesday hearing before House Finance. The most recent version of that bill as proposed by Speaker Nick Mattiello seems to be the worst of all worlds. The bill calls for very expensive non-recourse bonds to be used to fund the PawSox stadium with the intent that if the project fails bondholders would have no recourse against taxpayers. But, hours of that version of the PawSox bill was introduced two weeks ago, Governor Gina Raimondo threw hot water on concept drying in a radio interview that Rhode Island taxpayers would still have the ultimate obligation.

Frias Awaits

The PawSox legislation fate may be tied to the potential candidacy of GOP national committeeman Steve Frias who lost to Mattiello in 2016 in the race to represent House District 15 by less than 100 votes. Frias is poised to run again and has told close confidants that his decision to run maybe tied to the fate of Mattiello’s action regarding the PawSox funding.

Frias recently testified before House Finance Committee against the latest version of the funding and has been going door-to-door in District 15 discussing the proposed public funding of a new PawSox stadium.

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Senate President Dominick Ruggerio

Is Mattiello Caught Between Frias and Ruggerio

For Mattiello, he now faces Ruggerio who strongly supports public financing for the PawSox and the looming Frias who opposes the legislation and who may run against Mattiello if the Speaker moves the PawSox legislation. Mattiello barely won re-election and in the past two years has had a number of controversies tied directly to his office -- the free-college tuition to one of his top staffers Frank Montanaro, the hiring of his political consultant Ed Cotugno's son, and the recent action by the Board of Election for Mattiello's misspending from a campaign fund. 

Adding more fuel, on Friday the Board of Election announced it has scheduled a “show cause” on why four individuals tied to Mattiello should not be held in contempt for refusing to answer subpoenas about the Speaker's 2016 campaign.

The four being called before the Board on June 28 are former Mattiello top-staffer Matthew Jerzyk; former Mattiello consultant and now Raimondo political consultant Jeff Britt; former GOP candidate Shawna Lawton; and Lawton's campaign donor Teresa Graham. 

It is unknown if Senate passage of the budget is tied to the passage of a PawSox stadium funding structure.

The politics of the stadium is further complicated as all of the leading candidates for governor other than Raimondo have voiced opposition to proposed funding option for the private ownership group.

Democratic candidate Matt Brown, GOP candidates Mayor Allan Fung and House Minority Leader Patricia Morgan, and Independent candidate Joe Trillo have all strongly voiced opposition to the now pending versions of the PawSox funding.

Budget - What is In and What is Out

The $9.559 billion budget reverses some of Governor Gina Raimondo’s highly criticized cuts — such as the $18 million slash to funding for the developmentally disabled.

“I’m proud of this budget. We worked very hard to live within our means and avoid increasing the burdens on taxpayers, while investing in jobs and education, and helping people on Medicaid, seniors and the developmentally disabled. It’s a realistic, responsible budget, and it maintains our commitment to phasing out the automobile excise tax, which I know is important to our state’s taxpayers,” said House Mattiello.

The budget includes an agreement reached with IGT, on sports betting. Under the agreement, the state is to retain 51 percent of sports betting revenue, with IGT receiving 32 percent and Twin River, which would host the operation at its existing Lincoln facility and its Tiverton facility slated to open later this year, would get 17 percent.

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Coming in October to Tiverton and Lincoln

Host communities Lincoln and Tiverton would each get annual payments of $100,000 each. Sports gambling is expected to begin Oct. 1 at the state’s casinos.

The other two states that have set formulas for sports wagering so far have significantly lower state shares — in New Jersey, the state is to get 8.25 percent, and Delaware is to get 40 percent, according to House leadership.

The budget is dependent on sports waging generating $23.5 million in 2019.

The budget includes a bond question for November’s ballot asking voters to approve $250 million in construction to replace the state’s crumbling public schools, although the House added a requirement that communities commit to funding regular maintenance of new schools.

The budget includes a provision to allow children in foster care to continue receiving state services until age 21. The program will allow young people who are in the care of the Department of Children, Youth and Families on their 18th birthdays to elect to remain in DCYF care until they turn 21. It also includes increases to foster care rates.

It also restored a $15.7 million cut to Medicaid disproportionate care, which reimburses hospitals that provide greater amounts of uncompensated care to low-income patients.

The House amended the bill today to reflect a settlement reached this week over reimbursement rates to nursing homes. With the settlement, there is a 1.5-percent base adjustment effective July 1, 2018, and a 1-percent increase (COLA) that will begin Oct. 1. This means the nursing homes will be receiving a total of 2.5 percent above the current rates by Oct. 1. The House removed an 8.5-percent rate reduction that was contained in the budget passed by the House Finance Committee last week. This translates to approximately $9 million in additional funding, half of which comes from the state’s General Fund, the other half from a federal match.

The House added resources for the successful Real Jobs Rhode Island training program, funding it at $11 million. Although the House did not fund new programs within the Commerce Corporation, it extended several business incentive programs that were expiring and continued to fund them, including the Rebuild Rhode Island construction tax credit and the Wavemaker Fellowship program.

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Governor Gina Raimondo

The House did not include Raimondo’s proposal to increase the number of medical marijuana dispensaries from the current three to 15, but did increase licensing fees to the state’s three compassion centers from $5,000 to $250,000. The governor’s proposal to allow Connecticut and Massachusetts medical marijuana patients to purchase marijuana from Rhode Island compassion centers is included in the amended budget.

The House did include a tax on technology by including a “software as a service” products, expected to generate $9.7 million and $4.4 million, respectively, in new revenue.

The House included $976.2 million in state aid to education, an increase of $21.8 million over the current year and $9.5 million over the governor’s proposal.  It also included the Raimondo’s proposal to provide $6 million more for Rhode Island Promise, which provides Rhode Islanders two free years at the Community College of Rhode Island.

Beyond the $250 million bond to improve public school buildings, the House also included the other two ballot questions included by the Raimondo. Question 2 will seek $70 million for improvements to buildings at the University of Rhode Island Narragansett Bay Campus and Horace Mann Hall at Rhode Island College. Question 3 would ask voters to approve $47.3 million in borrowing for a variety of environmental, open space and recreation initiatives, $1.1 million less than the governor proposed.


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