RI House Poised to Vote on Budget, Shekarchi Defends Shift of CARES Act Monies to Support Government
GoLocalProv News Team
RI House Poised to Vote on Budget, Shekarchi Defends Shift of CARES Act Monies to Support Government
Small business leaders are calling for more resources to keep Rhode Island companies viable, while the House budget will shift hundreds of millions in federal relief funds to balance the state’s budget and support cities and towns' governments.
Last week, the House Finance Committee voted 11-2 to approve a $12.75 billion state budget for the 2021 fiscal year that restores funding to cities and towns, uses federal coronavirus relief funds and does not raise taxes or fees.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAs hundreds of Rhode Island businesses have closed and hundreds more are facing potential closure, some have criticized that this economic catastrophe has hammered the private sector, but that the public sector has seen minimal impact. Rhode Island government has made no layoffs and cities and towns have announced few staffing reductions during the pandemic.
In contrast, tens of thousands of Rhode Islanders are unemployed and tens of thousands more have simply given up and left the works force. In October of 2019 there were 556,900 in the workforce. In October of 2020, there were just 503,500 — 53,400 less working.
“It is not accurate to say that few public sector workers have been impacted. The state government has been on the front-lines of the virus response and have faced severe challenges especially those in 24-7 operations,” said Shekarchi.
Some state agencies have been the frontline of the response and have been under near-constant pressure, others workflow has not been impacted — agencies like Rhode Island Department of Transportation.
“Blanket personnel reductions in the midst of this response would have been a mistake. The state has seriously curtailed hiring, putting pressure on all current employees. At the local level, the vast majority of public sector workers are first responders and teachers,” said Shakarchi.
However, the reality is a much smaller private sector and a much smaller workforce in Rhode Island will be required to support the same sized state and local government.
A November investigation by GoLocal investigation found that in the first eight months of the coronavirus pandemic, the state spent less than $30 million of the $216.7 million budgeted to cover 16 months of testing. And, if the present testing spending continues for the remainder of the fiscal year -- the total testing cost will be approximately $60 million or $150 million less than Raimondo's budget costs.
“Roughly 460,000 tests have been processed by labs contracting with the State, or RIDOH’s State Health Laboratories,” said RI Department of Health spokesperson Joseph Wendelken.
“$14.5 million has been spent on lab contracts. A total of $29.7 million has been spent on testing as a whole. This includes money to support all the infrastructure around testing,” said Wendelken.
Regarding the testing costs, Shekarchi said, "Our information shows that through the beginning of December. only about $30 million of expenditures to date have been for testing. This does not include any services delivered for which payment has not been made, but it is considerably less than the projections provided."
Shekarchi addresses the concerns about the Raimondo administration's budgeting.
"There were many funds authorized via the CARES act, the largest of which was the state’s Coronavirus Relief Fund (CRF). The reporting done on these funds do not always distinguish which pot something is being paid from and carries assumptions about which expenses have FEMA eligibility (with CRF match) vs. full CRF cost," said Shekarchi.
"We relied heavily on the Administration’s estimate of spending needs from available sources backed up by public commitment of those funds for certain purposes. Some are easy to verify, especially if they have been spent or encumbered such as the $50 million the state committed to local schools in the supplemental budget or the $95 million of distributions to hospitals. Also major PPE and related purchases can be verified. Other items are based on estimates of anticipated activity that gets revised frequently and is the area with the greatest uncertainty," he added.
As URI economist Leonard Lardaro has repeatedly said that it is critical for Rhode Island to use the crisis to modernize and become more efficient.
“A crisis is a terrible thing to waste,” said Lardaro.
When asked why the budget does not drive any efficiency or incentives for cities and towns to move to regionalization, Shekarchi said the record budget is more of an interim step.
“Over the years there have formal and informal efforts to find ways for cities and towns to seek efficiencies by sharing services and many have done that,” said Shekarchi.
Shekarchi says, “The budget approved by the House Finance Committee is more short term. It maintains current services, includes the available federal funds, ensures there is room to respond to further deterioration of the situation, and leaves major policy work to next month when the new session starts.”
The House is scheduled to vote on the budget on Wednesday.