House Budget: Winners And Losers

House Budget: Winners And Losers

The State Senate will vote Wednesday to approve a $7.7 billion budget for the 2012 fiscal year. The proposed budget includes a slight expansion of the sales tax, an end to longevity payments for state workers and increased co-shares paid by families using RIte Care. It also fully funds the education funding formula passed last year and calls for a vote on full-fledged casino gambling at Twin River next year.

So who are the winners and losers in this year’s budget? GoLocalProv asked State House insiders to give us the breakdown.

Winners

Conservatives -> Whether it’s the few Republicans in the General Assembly or the right-leaning members of the Majority, conservatism took a step in the right direction according to state Tea Party leader Lisa Blais. She acknowledged that it was probably only baby steps, but said she was happy to see a House budget passed that takes away longevity bonuses for state workers and begins the conversation about cutting waste and fraud in the state’s social service programs so “we can help the people who actually need help.”

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Chambers of Commerce -> Much to her chagrin, Ocean State Action Executive Director Kate Brock said these business networks from across the state made it out of the state budget a clear winner. While several House members spoke in favor of combined reporting (the plan to force big corporations to report income from outside the state), virtually every pro-business group in the state argued that it would make Rhode Island less attractive to businesses. Combined reporting was put to a three year study and the chambers can breathe a sigh of relief for now.

Gamblers -> Folks who enjoy a trip to Connecticut to play table games may not have to wait much longer to be able to do the same here in Rhode Island. A late night addition to the budget calling for a 2012 vote on full-fledged casino gaming overwhelmingly passed despite objections from House Minority Leader Brian Newberry. When asked about his thoughts on the budget, Republican Party Chairman Ken McKay noted that the owners of Twin River, fresh out of bankruptcy, somehow come off as winners here.

Helio Melo -> The House Finance Chairman, largely viewed as the man behind the entire budget, is receiving praise from both sides of the aisle for mostly avoiding Governor Chafee’s call to widely expand the sales tax and for producing a budget void of one-time fixes. In fact, during Friday night’s marathon hearing, Melo’s two biggest fans appeared to be Minority Leader Newberry and Minority Whip Joe Trillo.

Big Businesses –> Because combined reporting failed to gain House approval, big businesses will “continue to save tens of millions of dollars through corporate tax loopholes,” according to the Poverty Institute’s Kate Brewster.

Schools -> With what at one time was projected as an over $300 million deficit, there was at least some questions as to whether the state would be able to fully fund its educational funding formula only one year after passage. But the House took its cue from the Governor and agreed not to slash education money for cities and towns.

Providence -> The city that was in desperate need of a bailout from the General Assembly got almost all of the $18 million it was asking for from the state, mostly coming from the decision to amend the retiree healthcare benefits.

Apple -> As the debate raged over whether the state was going to tax over-the counter drugs and sightseeing tours like the popular Polar Express tour that bring children to see Santa Claus, the quiet winner appeared to be one of the world’s most well-known brands. While various forms of software will now fall under the digital downloads tax, somehow iTunes, which makes up for the majority of paid downloads in the state, will remain exempt.

Medical Marijuana Advocates -> Despite the federal government raising questions about compassion centers in Rhode Island, the state budget sets aside $700k for revenue generated from these centers in 2012. It sounds like the General Assembly believes the government will let these businesses move forward in the coming year.

Losers

State Workers -> No one took it on the chin more than state workers, according to Brock. The decision to place an indefinite freeze on longevity pay may have caused the longest debate Friday night and its repercussions are still being talked about this week. Rep. Roberto DaSilva called the plan an attack on collective bargaining, but the article still managed to pass the House.

Governor Chafee -> Virtually every time a House member stood up to criticize the budget Friday evening, they prefaced their critique by praising the Finance Committee for producing a superior proposal to the Governor’s. The House made major changes to the Governor’s budget, the most glaring being the slashing of virtually all of Chafee’s proposed sales tax expansion.

Taxpayers -> The last thing taxpayers in the state needed, according to Republican Party Executive Director Patrick Sweeney, was another tax hike. While the new sales tax is nothing close to what Governor Chafee proposed, Sweeney asked, “With a proposed $7.66 billion dollar budget, how could we not find $17 million to cut? The tax and spend liberals in the state house just could not bear balancing the budget without increasing taxes. Rhode Islanders are hurting. We are one of the most taxed states in the country, we have the 3rd highest unemployment rate, groceries are through the roof, and Rhode Islanders can't even afford the gas to put in their car to get to a job interview.”

The Poor –> Due mainly to increases in RIte Care co-shares, the Poverty Institute’s Kate Brewster said “low and modest-income Rhode Islanders and people with disabilities are going to feel more than their share of pain under this budget.”

Homelessness Advocates -> Also feeling the paid from the House cuts was the Neighborhood Opportunities Program (NOP), which produced funding for a number homelessness programs throughout the state. As of July 1, 97 percent of state funding to NOP will be slashed.

Democrats -> Republican Party Chairman Ken McKay is focusing his sights on those praising House Finance Chairman Helio Melo, arguing that patting Mr. Melo on the back is the key sign of out-of-touch Democrats. McKay says that if “higher taxes and a sleazy casino trick is the right track,” as Melo suggested last weekend, “holy smokes I would hate to see the wrong track.”

Higher Education -> The colleges and universities have taken it on the chin over the past decade, so any increase in funding might be viewed as a good sign. But when the Governor called for $10 million in additional aid and the schools only received $4 million, higher education, which is about as underfunded in Rhode Island as it is anywhere in the country, comes off as a loser.

Small Businesses -> Progressive leaders like Brock and Brewster both agree that when big corporations are allowed to avoid reporting their full income, small businesses, which are not able to benefit from certain tax loopholes, stand to suffer.

Charter Schools -> There will be a three year moratorium on all unapproved school building projects in general, but charter schools were especially hard hit as the House voted to not allow them to receive public dollars for their buildings. Last week, Rhode Island Campaign For Achievement Now Executive Director Maryellen Butke said, “charter schools should not have to use precious classroom dollars for their facilities any longer.”