Senate Approves State Budget With Sakonnet Bridge Ownership Transfer

The Senate voted 30 to 7 on Monday to approve an $8.1 billion state spending plan, of which $3.3 billion is supported with state revenues. The budget invests in additional school funding, includes restorations to selected human services programs, such as those supporting the developmentally disabled, and protects the tourism and hospitality industry from tax increases, such as a 25-percent increase in the meals and beverage tax as proposed in the governor’s budget plan.

The amended bill does not alter the  to the Rhode Island Turnpike and Bridge Authority (RIBTA). The legislation (2012-H 7323Aaa), which , is now headed for the governor’s desk.

Reached late Monday night, Sen. Louis DiPalma (D-Middletown, Little Compton, Newport, Tiverton) said he made an amendment to the budget to remove article 20, which is the East Bay Act to transfer ownership of the bridge from the Rhode Island Department of Transportation to RIBTA.

"Just about every single East Bay senator supported the amendment to remove it," DiPalma said, noting it's expected Gov. Chafee will sign it. "The likelihood of tolls is something that's not sitting very well."

Read more here in our archives on the coverage of the Sakonnet River Bridge toll debate.

DiPalma noted other major sticking points to the spending plan, such as restoring last fiscal year's "deep cuts" to health and human services, and particularly, the developmentally disabled and additional funding to nursing homes.

"At the end of the day, when we see people at the State House talking about tolls on the bridge, we won't see those other people talking about the impacts of those [health and human services] cuts," he said. "A budget is a policy document. It’s a statement of priorities, both conspicuous by those that are there and inconspicuous by those that are not there."

Senate Finance Committee Chairman Daniel Da Ponte (D-Dist. 14, East Providence, Pawtucket) said the budget represents very difficult choices and tries to strike a balance between making critical investments to move Rhode Island's economy forward, such as the transportation and IT initiatives, while limiting the impact the budget will have on taxpayers so they can take care of their families.

“For example, we finally got off the path of perpetual borrowing to support our transportation needs," he said in a press release. "We will not have to put any more transportation debt in front of voters again.”

The bill restores nearly $10 million in state and federal funding for programs for the developmentally disabled to restore a substantial portion of reductions in the current year. It also restores dental coverage for adults on Medicaid, and provides additional funding for nursing homes in both fiscal years.

It includes $22 million to fully fund the second year of the new state education aid formula, as well as an additional $11 million, as the governor proposed, to accelerate the implementation. The budget restores funding for the textbook reimbursement program, and restores funding for school breakfast administration. The budget restores funding for Channel 36, but with an understanding the administration will return with a proposal to begin moving the authority and its license to private funding.

Additionally, the proposal includes the governor’s plan for cities and towns to alleviate pressure related to “maintenance of effort” – so that municipalities are not penalized for resolving school budget deficits. In addition, to assist struggling municipalities with their cash flow needs, lawmakers concurred with the governor’s proposal to accelerate state aid payments to communities.

The budget focused on ensuring the Ocean State’s tourism industry was not adversely affected by proposed tax increases. The budget removes the governor’s proposal to increase the restaurant meals and beverage tax by 25 percent, and also rejects an expansion of the hotel tax to include vacation rentals. Additionally, it repeals a tax enacted last year on scenic and package tours.

The budget does subject luxury clothing costing $250 or more to the sales tax for the first time, generating a projected $5.9 million, and includes taxi and limousine rides and pet services other than veterinary costs subject to the sales tax. The General Assembly did not approve a provision to add a sales tax to car washes and warehousing, moving, and storage services.

The bill includes $209 million in bond questions that will appear on the November ballot, including a $94 million proposal for a new Veterans’ Home and assisted-living facility and rehabilitation of the current facility, and $25 million for affordable housing. Rather than asking voters to approve an additional $21.5 million in bonds to support the state’s transportation program, the budget uses Rhode Island Capital Assistance Program funding to provide the highway match and one-time funding to purchase buses through FY 2017. This final step builds on the work the General Assembly began last year, and permanently eliminates the need to issue more debt to support the state’s match for highway programs.

The bill takes bold steps to begin reforming how the state provides higher and elementary and secondary education programs and services. It establishes a new single 11-member Board of Education to better coordinate and streamline the state’s education systems to ensure the state offers a world class education system from kindergarten through lifelong learning. 

In addition to the actions taken to thwart many of the tax increases on the tourism and hospitality industry, the budget includes a number of initiatives to help invigorate the state’s economy. Authorization was given to invest $174 million at T.F. Green airport, and adds funding to complete the sale of the former I-195 highway land and to operate the I-195 Commission for the next three years. In addition, funding was included to institute electronic business permitting to make it easier to do business in Rhode Island.

Also, the bill expands the field for those who can apply to the film and television tax credit program, adding theatrical and musical touring productions mounted in the state and allowing smaller-budget documentaries to apply, but it also sunsets the tax credit in 2019. The proposal also sets a $5 million cap for each individual production (within the $15 million cap on the program overall), and adds a new rule excluding any entity from receiving the tax credit if they apply for a state loan or loan guaranty.

The budget also includes a number of reorganizations, such as creating a more effective budget structure through a new office of Management and Budget, which will assume the Budget Office duties, but include performance management and federal grant management responsibilities.