The Rhode Island General Assembly began its 2010 session yesterday, but tackling the state’s $218 million current fiscal year deficit was not on the agenda.
Both the Senate and the House yesterday planned votes to override vetoes by Gov. Donald Carcieri on more than a dozen bills ranging from voter registration to teacher health care. The Democratic majorities in both houses have clashed with the Republican governor on taxing and spending priorities. Carcieri objected to the General Assembly’s $7.81 billion fiscal 2010 budget last year but signed it anyway.
Last month Carcieri proposed cutting general fund spending in fiscal 2010 by $130.4 million and aid to local governments by $125 million. The Senate Finance Committee began hearings last month on the proposals.
Senate majority spokesman Greg Pare said Majority Leader M. Teresa Paiva Weed was concerned the governor’s proposal would lead to local tax increases. The Finance Committee will be meeting on Tuesdays and Thursdays in the coming weeks to address the deficit but an agreement is not imminent, Pare said.
Carcieri’s proposal has not received much traction in the House, either. A majority of representatives yesterday stated their opposition to the supplemental budget in a letter to the governor.
“Let there be no doubt about it: This drastic mid-year cut is nothing more than a passing of the buck to our municipalities,” the letter said.
Under state law, the governor must submit a budget proposal for fiscal 2011 by the third Thursday of this month, unless granted an extension by the General Assembly. Carcieri’s budget will need to close an approximately $405 million deficit.
Rhode Island has been struggling with reduced revenue as a result of the economic downturn. In November, the state had the second-highest unemployment rate in the nation — 12.7% — after Michigan, according to the federal Bureau of Labor Statistics.
Rhode Island’s “economy is so strained, and also their finances are so strained,” said Fitch Ratings analyst Laura Porter. “They started having budget problems before most states.”
Long-term budget stress has lowered the state’s flexibility in dealing with fiscal problems, Porter said.
Fitch downgraded the state one notch to AA-minus in 2008, and in March of last year changed the state’s outlook to negative from stable.
Also yesterday, Carcieri appointed Keith Stokes to be executive director of the Rhode Island Economic Development Corp. for a one-year term. The appointment requires Senate approval. Last week, the governor announced that his first pick for the position, Ioanna Morfessis, had withdrawn her nomination, citing health problems in her family.
Stokes has the been the Newport County Chamber of Commerce’s executive director since 1994.