Calling the fiscal 2010 budget passed by the Rhode Island General Assembly "ill-conceived," Gov. Donald Carcieri nonetheless signed the $7.8 billion taxing and spending package into law yesterday.

"This budget is not good for Rhode Island in the long run, and my signature should not be seen as an approval of this budget," Carcieri said in a press release.

He said that had he vetoed the bill or allowed it to become law without his signature - which would have happened on July 4 - it would have put the state as risk of losing "hundreds of millions of dollars" of Medicaid funding.

Had the Republican governor vetoed the budget, it would have gone back to the Democratic-led General Assembly, where there were enough votes to override a veto.

Although the budget cuts back pension benefits for state workers, it didn't convert the state retirement system to a 401(k)-style plan that Carcieri championed. The budget counts on $226.5 million of federal stimulus funds.

Lawmakers rejected the governor's proposal to eliminate corporate taxes and changed taxation on capital gains so that it would be treated the same as ordinary income.

The budget authorized the state to sell $350 million of tax anticipation notes, which are expected to go to market this fall. It also budget authorized the issuance of up to $50 million of bonds by the Rhode Island Turnpike and Bridge Authority to finance capital projects on the state's toll facilities including renovations to the Pell and Mount Hope bridges.

Also authorized were two projects to be financed bonds for that project will be issued by the Rhode Island Health and Education Building Corp. The corporation will market $11.3 million of bonds to renovate the Rhode Island College Recreation Center as well as $15.2 million for road work at the University of Rhode Island's Kingston, Narragansett Bay, and W. Alton Jones campuses.

The budget also authorized $13 million of bonds backed by state appropriations and surcharges on motor vehicle fees to partially finance infrastructure upgrades to the state's motor vehicle department's computerized license and registration system.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.