Is Raimondo’s College Plan Dead? Paiva Weed’s Departure, Trump and CPAs' Opposition
GoLocalProv News Team and Kate Nagle
Is Raimondo’s College Plan Dead? Paiva Weed’s Departure, Trump and CPAs' Opposition
On Tuesday, Governor Gina Raimondo was scrambling to delay Senator Teresa Paiva Weed’s departure as Senate President until the end of the budget process.
According to State House sources, former State Senator and now senior advisor to Raimondo David Cruise was dispatched to plead with Paiva Weed to stay until the end of the budget process.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTPaiva Weed declined.
And, the loss of Paiva Weed, who is arguably Raimondo’s strongest ally in the legislature, was just one of the recent hits to her top priority — the $30 million college funding program.
The bold proposal -- the RI Promise Scholarship Plan -- is designed to help Rhode Island students minimize their college debt. Some cynics said it was to soften the perception that Raimondo only supports corporate subsidies for major corporation, and that it was a plan to appeal to the more progressive side of the party with 2018 elections looming.
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On Thursday, the RI Society of Certified Public Accountants issued a damning report. In a survey conducted this week, approximately 78% of their membership respondents expressed their opposition to the plan. The Society is made up of professionals from Rhode Island and southeastern New England, representing the fields of accounting, finance, insurance, academia and law.
Others are joining in the criticism due to the lack of means testing for Raimondo's program.
“Poorer students are not helped: The governor’s plan has no financial cap for eligibility. It is unseemly that middle class folks who paid for and who have loans for their children’s education as well as granny and grandpa who sacrificed for their grandchild to attend an institution of higher learning would now be asked to have their tax dollars used to benefit other high income people,” write Arlene Violet in her column in the Valley Breeze. “This isn’t about class warfare: it’s about equity. Presidential candidate Hillary Clinton at least had an income cap on her proposal.”
Speaker of the House Nick Mattiello has voiced strong concerns to Raimondo's plan and without House leadership support it is nearly impossible to fund a $30 million new program.
“Speaker Mattiello is concerned that the Governor’s proposal would make Rhode Island the only state in the country to adopt an exclusively taxpayer-funded higher education system. Improving the quality, access and success of higher education in our state are issues that Speaker Mattiello believes we need to accomplish,” said Larry Berman, Communications Director for Mattiello. "He wants to look at the data and make a determination of the specific potential changes and the impact those would have on accomplishing these goals. He does not believe the argument has been successfully made at this point, but he will review the testimony on her proposal provided to the House Finance Committee last week.”
Due to the combination of the recently released federal budget proposed by the administration of President Donald Trump coupled with an expectation of a massive change to Obamacare, Rhode Island could be faced with a significant loss in federal funding.
On Thursday, Raimondo said the replacement of Obamacare would cripple Rhode Island's economy. At time of publication, the House vote on Obamacare was put on hold.
“Under TrumpCare, at least 70,000 Rhode Islanders will lose health coverage and it will cost taxpayers at least $200 million each year. As many as 8,000 Rhode Islanders will lose their jobs under TrumpCare, undoing nearly all the job growth we’ve fought so hard for," said Raimondo in a fundraising letter issued on Thursday to supporters.
"The Governor has proposed an affordable plan that ensures Rhode Islanders have the training and education they need to get the jobs we are creating, which is why business leaders across the state support the Rhode Island Promise Scholarship. TrumpCare and other aspects of the President’s budget would be a disaster for Rhode Island that puts everything at risk," said David Ortiz, Press Secretary to Raimondo is a statement to GoLocal.
Winners and Losers in Raimondo's FY18 Budget Proposal
Winner
Criminal Justice Reform
Per recommendations from the Justice Reinvestment Working Group, the Governor is proposing nearly $1 million in investments such as the public defender mental health program ($185,000), improved mental health services at the ACI ($410,000), recovery housing ($200,000) and domestic violence intervention, in her FY18 budget.
Winner
English Language Learners
Under the heading of “promoting 3rd grade reading,” Raimondo proposed adding $2.5 million to make English Language Learning (ELL) K-12 funding permanent. The Governor’s office points out that RI is one of four states that doesn’t have permanent funding.
The suggestion was one made by the Funding Formula Working Group in January 2016, who said that “in the event that Rhode Island chooses to make an additional investment in ELLs, the funding should be calculated to be responsive to the number of ELLs in the system and based on reliable data, and include reasonable restrictions to ensure that the money is used to benefit ELLs — and promote the appropriate exiting of ELL students from services.”
Winner
Car Owners - and Drivers
Governor Raimondo wants to reduce assessed motor vehicle values by 30% - a change that would reduce total car tax bills by about $58 million in calendar year 2018. Speaker of the House Nicholas Mattiello, however, has indicated that he might want to go further in its repeal.
In her budget proposal, Raimondo also put forth adding 8 staffers to the the Department of Motor Vehicles to "address wait times."
Winner
T.F. Green
The “Air Services Development Fund” would get an influx of $500,000 to “provide incentives to airlines interested in launching new routes or increasing service to T.F. Green Airport.” The Commerce Corporation set the criteria at the end of 2016 for how to grant money through the new (at the time $1.5 million fund).
Also getting a shot in the arm is the I-195 development fund, which would receive $10.1 million from debt-service savings to “resupply” the Fund to “catalyze development & attract anchor employers.”
Tie
Minimum Wage Increase
An increase in the state minimum wage is part of Raimondo’s proposal, which would see it go from $9.60 an hour to $10.50 an hour. Raimondo was unsuccessful in her effort in 2016 to bring it up to $10.10 — it was June 2015 that she signed legislation into law that last raised Rhode Island’s minimum wage, from $9 to 9.60.
The state's minimum hourly wage has gone up from $6.75 in January 2004 to $7.75 in 2013, $8 in 2014, and $9 on Jan. 1, 2015. Business groups such as the National Federation of Independent Business however have historically been against such measures, citing a hamper on job creation.
Tie
Cigarette Tax
Like the minimum wage, Raimondo is looking for an increase - in this instance, the cigarette tax, and revenue to state coffers. Raimondo was unsuccessful in her effort to go from a tax of $3.75 to $4 last year. Now she is looking for an increase to $4.25 per pack, which the administration says would equate to $8.7 million in general revenue — and go in part towards outdoor recreation and smoking cessation programs.
The National Federation of Independent Business and other trade groups have historically been against such an increase, saying it will hurt small businesses - i.e. convenience stores. And clearly, if you’re a smoker, you’re likely to place this squarely in the loser category instead.
Loser
Hospitals
As often happens in the state budget, winner one year, loser the next. As GoLocal reported in 2016, “the Rhode Island Hospital Association immediately lauded the budget following its introduction, and addressed that while it is facing some reductions, that it "applauds" this years budget after landing on the "loser" list last year.”
This year, it falls back on the loser list, with a Medicaid rate freeze to hospitals, nursing homes, providers, and payers — at FY 2017 levels, with a 1% rate cut come January 1, 2018.
Loser
Online Shoppers
The taxman cometh — maybe. Raimondo proposed an “Internet Sales Tax Initiative” — which would purportedly equate to $34.7 million in revenues.
"Online sales and the fact that online sellers do not collect sales tax has created a structural problem for Rhode Island's budget — our sales taxes have been flat," said Director of Administration Michael DiBiase, of the tax that Amazon collects in 33 states, but not Rhode Island. "We think mostly due to online sales, we’re able to capture the growth. The revenue number is $35 million dollars — it improves our structural deficit problem. It’s an important fiscal development."
Loser
Long Term Care Funding
The Governor’s proposal recommends “redesigning the nature” of the State’s Integrated Care Initiative, by transferring long-term stay nursing home members from Neighborhood Health to Medicaid Fee-for-Service and repurposing a portion of the anticipated savings (from reduced administrative payments to Neighborhood Health) for “enhanced services in the community.” “The investments in home- and community-based care will help achieve the goal of rebalancing the long-term care system," states the Administration.
Cutting that program is tagged at saving $12.2 million; cuts and “restructuring” at Health and Human Services is slated to save $46.3 million.
