Rhode Island Gov. Donald Carcieri last week called on the General Assembly to grant him the power to withhold state appropriations from towns and cities as part of a plan to find budget savings.
“In these extraordinary times, I need the flexibility to withhold appropriations to properly manage the execution of the budget,” Carcieri said in a release. “Over the past several years, framed by two recessions, the state has faced difficult budgets, resulting in nearly one billion in lost revenue over the past two years.”
The governor plans to introduce legislation in September — when the legislature returns from its recess — that would allow him to withhold fourth-quarter motor vehicle tax payments to cities and towns to save the state $32.5 million. The assembly took that authority away from governors in 1996.
Carcieri last week also announced he would create a task force to study municipal finances and propose long-term fiscal solutions.
The proposal was announced as part of a plan for the executive branch to find $67.8 million of unspecified savings that were required as part of the fiscal 2010 budget.
Carcieri issued an executive order last week that designated 12 days of furloughs for state employees, spread over the remaining 10 months of the fiscal year, to save $21.6 million. The he said he hoped to negotiate pay reductions with unions that would eliminate the need for shutdown days.
In addition to the furloughs, the governor said the Department of Administration had identified $17.1 million of savings.
The state, which passed a $7.8 billion operating budget for the current fiscal year, plans to sell between $80 million and $100 million of general obligation bonds later this year.
The economic downturn has hit Rhode Island hard, with unemployment reaching 12.7% last month, the third highest rate in the nation after Michigan and Puerto Rico. The state will close its fiscal 2009 book tomorrow and expects to see revenue from May and June to be $65 million lower than originally projected, Carcieri said.
“The significant savings we have realized by this plan are being outpaced by decreasing state revenues, revenues that rely on everyday economic activity,” he said.