RI Behind Revenue Projections — DiBiase on Sports Betting Shortfall and More

Friday, April 05, 2019

GoLocalProv News Team and Kate Nagle

 

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Director of the Department of Administration Michael DiBiase joined GoLocalProv's Kate Nagle on LIVE

Rhode Island Director of Administration Michael DiBiase said that Rhode Island revenues are “behind” approaching the May revenue estimating conference — and as the Rhode Island General Assembly deliberates Governor Gina Raimondo’s Fiscal Year 2020 budget proposal. 

DiBiase said he remains “cautiously optimistic” when he joined GoLocal News Editor on GoLocal LIVE at the Rhode Island State House that the “key months” of March and April will get the state where it needs to be, after last November the House fiscal adviser projected that the state was looking at a nearly $50 million shortfall for the current fiscal year — and a more than $110 million deficit during the next fiscal year. 

The state’s dismal sports betting numbers for the current fiscal year are well off projections, as the state had originally budgeted revenue estimate at $23.5 million for the year before dropping that number to $11.5 after the later-than-expected launch.  

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Now, four months in, the state has only booked just over $300,000 in revenue, according to the most recent unaudited and unadjusted numbers from the state. 

“I think first of all, it’s not a straight line — so they’re volatile over the course of the year. March is a big month because of March Madness,” said DiBiase of the sports betting numbers -- which saw the state lose nearly $900,000 in the month of February. “This is kind of unchartered water in terms of there’s not a lot of experience in other states so the assumptions were not based on a lot of data.  But we remain optimistic that we’ll increase revenues over time.”

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DiBiase said that he expected the recent approval of mobile sports betting that the numbers will near where the estimates projected. 

“We also expect to now have mobile online — we do anticipate adding that to the bottom line. I think in the current year we’re looking at $12 million and I think we have growth projected for next year overall because [not just] online betting but lottery revenue in general,” said DiBiase.

“With marijuana [legalization], unliked sports betting, we actually have better data and experience. I think the estimate is $6 million for next year so we feel really comfortable with those number,” said DiBiase. 

When asked how things look heading into the May revenue estimating conference, DiBiase noted the state is currently behind -- but he is optimistic moving forward. 

“We’re a bit behind right now in terms of revenues but the key months are March and April and I remain cautiously optimistic that we’ll pick up some ground,” said DiBiase

Injured on Duty Legislation, Efficiency Commission, Education Proposals

DiBiase spoke to testifying this week before the Senate Finance Committee to revamp the state’s injured-on-duty laws, pointing out that of the 24 state employees collecting injure-on-duty benefits, 18 are sheriffs.

“We’ve been fighting hard to support the Governor’s legislation to bring changes to a statute that actually doesn’t work. It creates the wrong incentives and causes a situation where we have many more people injured on duty,” said DiBiase. “The average is that they’ve been out for four years — this is supposed to be a temporary program.”

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Governor Gina Raimondo

DiBiase also addressed the work of the Efficiency Commission, which was tasked by Governor Raimondo fo find $10 million in savings.
“We’re going to have our third meeting on Monday and we’ll finish up by April and come up with recommendation,” said DiBiase. “We’re confident we’ll get the [$10 million] savings mark.  Half of those recommendations [are] related to real estate and the other half will be about program consolidation.”

Education proposals including universal pre-K — and the expansion of the state’s free college “RI Promise Program” from CCRI to RIC — will face tough political battles, according to DiBiase. 

“The Governor is extremely passionate for [universal] pre-K for a good reason — they get a good start before kindergarten, which the Governor also championed full day,” said DiBiase. “The revenues are tight and we’re going to have to fight for that but I think there’s a lot of broad support.”

And while less than 40% of the first year Rhode Island Promise students met the threshold of GPA and class load at CCRI to qualify for free tuition through the program in the second year, DiBiase defended Raimondo’s proposal to expand the multi-million dollar taxpayer program to Rhode Island College. 

“[What] the Governor’s talked about is the economics of what holds a lot of these students back — they’re going to work or they have to worry about money so if we can makes things easier and it’s not a lot of money in the scheme of things,” said DiBiase. “We’re not talking about a lot of money to make it possible for students to get a higher education.”

 

Related Slideshow: $11 Million Paid to Dead People and Other Key Findings of State Audit - April 4, 2019

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1.

Dead People

More than $11 million dollars in Medicaid benefits were paid to more than 1,000 dead Rhode Islanders.  

Approximately $6 million of those payments have been recovered.

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2.

NO PLAN

"The State lacks a strategic plan to (1) coordinate needed replacements/enhancements to its key statewide financial systems and (2) ensure that critical legacy financial systems, such as the payroll system, which pose a business continuity risk, will be available to support State operations. Because the State has opted to utilize various independent software solutions, the plan is critically important," according to the report.

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3.

NO PLAN IS CAUSING BIG RISK

Millions are at risks due to the lack of planning in the programs. 

"Without a comprehensive plan, there is substantial risk that the intended integration of various components may not be achieved. The State has already experienced such integration issues and halted work on a time and effort reporting system and a grants management system. The State had expended nearly $3 million on those projects."  

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4.

TECH SECURITY RISKS

"Overall, the State has not sufficiently addressed information technology (IT) security risks, an increasing concern given the State’s very complex computing environment.   The State needs to ensure its IT security policies and procedures are current, well communicated and complied with. Assessments of compliance for all critical IT applications have not been performed - systems deemed to pose the most significant operational risk must be prioritized," said the report.

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5.

LACK OF FISCAL CONTROLS

"EOHHS lacks strong oversight procedures regarding fiscal monitoring and contract settlement for its managed care organizations (MCOs). Capitation payments to MCOs represent nearly 60% of Medicaid benefit expenditures. EOHHS needs to develop a comprehensive risk assessment and monitoring plan to ensure that managed care expenditures are validated and settled each contract period. More stringent audit and financial monitoring procedures should be employed," according to the report.

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6.

FAILURE TO MEET FEDERAL STANDARDS

The report by the auditor said, "The RIBridges (UHIP) eligibility system does not currently meet all the functional requirements of an automated data processing system as outlined in federal SNAP regulations. The system is also not producing reports to allow daily reconciliation of electronic benefits authorized and disbursed and to ensure accurate and timely completion of federal reports."

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7.

LACK OF CONTROLS - CAUSING COMPLIANCE ISSUES

The report further found that "Medicaid and Children’s Health Insurance Programs – Due to the limited operation and effectiveness of controls over eligibility for the Medicaid and CHIP programs during fiscal 2018, the State did not comply with the Medicaid and CHIP program eligibility requirements, collectively."

And that the program did not comply with basic information management, "The State specifically did not materially comply with eligibility requirements due to collective noncompliance regarding adequately documenting and determining recipient eligibility, redetermining eligibility timely, and validating key eligibility data elements using electronic interfaces designed within RIBridges."  

 

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