Raimondo bond measures include affordable housing
Rhode Island Gov. Gina Raimondo's $10.2 billion budget request for fiscal 2021 includes ballot-item requests for three bonding measures totaling $269 million.
The bonding would include $25 million for affordable housing, funding for which has increasingly become a public finance emphasis. Raimondo is also asking lawmakers to raise the transfer tax on real-estate sales worth more than $500,000 to provide a sustainable funding source.
The overall spending plan, which exceeds $10 billion for the first time, would raise total spending by $224 million, or 2.3%, over what lawmakers approved last summer. The new fiscal year will start July 1.
By law, Rhode Island voters must approve ballot measures.
An $87.5 million bond would include the housing initiative, plus $15 million for new kindergarten classrooms; $20 million to further repairs to the Quonset Development Corp.'s Port of Davisville piers in North Kingstown; $21.5 million for new industrial parks and $6 million for Trinity Repertory Co. in Providence and the Rhode Island Philharmonic Orchestra & Music School.
States and cities, especially in the Northeast, have been examining affordable housing approaches to retain workers and counter the effects of gentrification.
"Our housing shortage threatens all of the economic progress we've made," Raimondo said in her State of the State address Tuesday to a joint session of the General Assembly in Providence.
Her transfer-tax increase mirrors a component of Boston Mayor Martin Walsh's $500 affordable housing initiative. Walsh last month signed a 2% transfer tax on sales above $2 million within the city, which the City Council approved. Under Massachusetts law, the commonwealth must approve the home-rule petition.
Raimondo said the transfer tax could generate roughly $3.6 million next year and nearly $8 million annually thereafter.
Her other ballot measures include a $117 million bond with $53.7 million for the University of Rhode Island Fine Arts Center; $38 million for the Rhode Island College science and technology facilities; $12 million for the Community College of Rhode Islan; and $10 million for URI 's Center for Ocean Innovation.
A $64 million bond would cover $35 million for renovating state beaches and parks; $15 million for clean drinking water; $7 million for municipal resiliency; $4 million for local recreation; and $3 million for open-space preservation.
Raimondo's budget features no broad-based tax increases, but covers a nearly $200 million deficit through some hikes in taxes and fees on such items as wines and spirits.
Legalization of recreational marijuana and levels of state control for distribution centers figure to again be a sticking point between the governor and the legislature. The budget assumes $22 million in revenue, hoping to open stores by March 2021.
"The marijuana proposal is unlikely to pass, and therefore the budget is effectively $21.8 million out of balance before the first budget hearing is held," said Senate President Dominick Ruggerio, D-North Providence.
Another possible source of contention is Raimondo's desired slowdown of the car tax phaseout, which House Speaker Nicholas Mattiello, D-Cranston, has championed.
This budget also pays out the final $12 million that Rhode Island owes from the collapse of 38 Studios, the dissolved video-game company owned by former baseball pitcher Curt Schilling. Its demise left Rhode Island on the hook for a $75 million loan guarantee that the state backed with its moral obligation.
Moody's Investors Service rates Rhode Island's general obligation bonds Aa2. Fitch Ratings and S&P Global Ratings rate them AA, All three assign stable outlooks.
Moody's last month cited “an economy that has long lagged the nation's and is accompanied by weak demographics and comparatively high combined debt and pension liabilities."