Gov. Lincoln Chafee signed Rhode Island’s $8.1 billion budget, but warned that storm clouds still hover over the state’s cities and towns.
Chafee, in approving the spending plan on Friday, said the General Assembly didn’t do enough to provide municipal relief, notably in local pension overhaul.
“Several Rhode Island communities are on the brink of bankruptcy, and this failure could have consequences as soon as this summer,” said Chafee, an independent and former Republican.
The legislature adjourned last week without acting on a 13% supplemental property tax bill for 44,000-population Woonsocket, prompting school officials to ask for a state takeover. Education commissioner Deborah Gist is considering the request.
The school system’s $10 million shortfall triggered the city’s financial crisis. Woonsocket is under the watch of a state-appointed budget commission, the second step in three stages of state intervention.
Rhode Island’s budget includes about $2.6 million for retirees in Central Falls, who saw their benefits slashed 55% after the city filed for bankruptcy on Aug. 1, 2011.
Central Falls expects to emerge from Chapter 9 protection in late summer or early fall.
The budget authorizes tolls on the Sakonnet River Bridge, which carries Route 24 between Portsmouth and Tiverton, increases school funding, and adds new taxes on pet grooming, high-end clothing and taxi fares.
In addition, the spending plan provides more funds for the I-195 Commission, which is looking into economic development projects in the so-called Knowledge District of Providence, home to Brown University’s new medical school and other academic initiatives.
Moody’s Investors Service rates Rhode Island’s general obligation bonds Aa2, while Fitch Ratings and Standard & Poor’s each assign a AA.
