In an effort to resolve a projected $384 million spending shortfall in fiscal 2009, Gov. Donald L. Carcieri Friday presented to Rhode Island’s General Assembly a 3.8% decrease of the budget from fiscal 2008.
The budget enacted for current fiscal 2008 stands at $3.4 billion, while Carcieri’s proposed fiscal 2009 budget is $3.27 billion. He proposed addressing the deficit without raising any broad-based taxes.
“We have to say as loudly and plainly as possible that we have a spending problem, and that the solution to our budget difficulties is to control our spending by changing our behavior,” Carcieri said.
Carcieri’s budget plan reduces spending in the state’s three major areas of spending: personnel costs, human service benefits, and state payments to cities and towns.
Carcieri’s plan would enable Rhode Island to operate with fewer employees and contract employees, and the state’s retiree health plan would be reformed to begin to address its 44% unfunded liability. All personnel costs would be reduced by $101 million, he said.
Additionally, Carcieri proposed saving $137 million in costs by reforming Rhode Island’s Medicaid and welfare programs. In particular, Carcieri’s Medicaid Consumer Choice Reform plan would enable seniors to remain at home or in the community instead of institutional care such as nursing homes or group homes. And the Family Independence Program — the state’s welfare program — would be reformed to improve work participation rates and changed to be in compliance with federal guidelines so no federal funds were lost.
Finally, Carcieri’s proposal reduces payments by $42 million to cities and towns. While Carcieri proposed preserving local school aid, cost-saving measures were directed at the municipal level, especially in health care costs.
Carcieri said his proposed budget was “historic” as Rhode Island had not seen a budget that was less than the previous year’s budget since the 1990s.
