Gov. Gina Raimondo signed Rhode Island’s $9.2 billion fiscal 2018 budget into law Thursday night, immediately following its passage by the Senate after a month-long standoff.
The budget matches the legislation the House of Representatives passed in June that includes House Speaker Nicholas Mattiello’s six-year excise tax relief. The Senate tried adding a last-second amendment to the car-tax bill preventing the state from dipping into the reserve fund if the economy struggled.
The amendment caused the impasse after Mattiello dismissed his chamber, saying there was no way he would approve the budget with the amendment in place.
With the amendment removed, the Senate also passed separate legislation mandating the director of revenue to file annual reports with both the House and Senate and provide recommendations regarding the car tax phase-out. The first report is due Jan. 1, 2021. The House is expected to pass the same bill when it reconvenes Sept. 19 as well as additional legislation left in limbo due to the standoff.
“We have come to an agreement that allows us to move forward with the business of the state, allowing the excise tax phase-out while still providing protections that will monitor its economic feasibility for the state,” said Senate finance committee Chairman William Conley Jr, D-East Providence.
The new budget eliminates the $134 million shortfall that opened in May, raises the minimum wage, restores free bus rides for low-income elderly and disabled people, includes a pilot program for two years of free tuition at the Community College of Rhode Island and includes no broad-based tax increases.
Rhode Island’s minimum wage will rise to $10.10 in Jan. 2018 and $10.50 in Jan. 2019.
The car-tax relief plan reduces the taxable portion of a car’s retail value to 95% from 100% and increases the minimum exemption to $1,000 from $500, capping the rate at $60 in 2018. The plan immediately stops taxing cars 15 years and older. Elimination of the tax is scheduled for 2024. The budget also fully reimburses cities and towns $26 million in lost revenue in 2018.
The assembly added $10 million for nursing homes and included the new health system transformation program that delivers $23.5 million in federal funds, including $13.5 million for hospitals and $7 million for nursing homes.
Education aid is up by $46 million.
To close the budget gap, lawmakers decided against creating positions throughout government and made a $25 million cut in general spending. Lawmakers also cut the General Assembly’s budget by $2 million as well as moderate cuts to smaller programs.
“This is a jobs budget, with a lot in it to help Rhode Islanders,” Raimondo said. “It increases our record investments in classrooms across the state, increases minimum wage and gives homecare and direct care workers a raise. And, it gives every Rhode Islander car tax relief."