house finance committee

June 8, 2016June 8, 2016

House budget bill contains wins, losses for progressive left

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The budget passed by the House Finance Committee last night, and slated to be vetted by the full chamber next Wednesday, contains some wins and some losses for the progressive left.

The budget bill contains some money to restore low-cost bus fare for indigent people – a social service that RIPTA cut earlier this year. The RIPTA Riders Alliance declined comment until more information is available. House Speaker Nick Mattiello told RI Future the funding for this program is temporary and said larger changes with RIPTA are afoot.

The proposed budget also includes new money to pay nursing home caregivers and those who works with the developmentally disabled. The investment would help raise wages for underpaid caregivers, many of whom work full time and still live in poverty. SEIU officials hailed the move as a step toward a $15 an hour minimum wage for front line caregivers.

It also preserves Governor Gina Raimondo’s increase to the Earned Income Tax Credit, and increased the investment in housing for the homeless proposed by Raimondo.

“We find it encouraging that the House Finance Committee showed their commitment and concern for Rhode Islanders experiencing housing insecurity by supporting the Governor’s budget proposal for affordable housing production and adding an additional $10 million for urban revitalization and blight remediation for a total $50 million Housing Opportunity Bond,” said Jim Ryczek, executive director of the RI Coalition for the Homeless. “We appreciate that the House Finance Committee ensured that this year’s budget invests in the long-term solutions to addressing homelessness and the lack of affordable housing in our state.”

But the House budget left out a proposed increase to the minimum wage that Raimondo included in her budget proposal. The current minimum wage in Rhode Island is $9.60 and Raimondo’s budget proposal would have raised it to $10.10. While the minimum wage does not have a fiscal effect on the budget, it is customary in Rhode Island to include policy changes in the state budget.

The House budget also nixed Raimondo’s proposal to increase investment in the school construction bond money. Many urban school buildings in Rhode Island are in dire need of repair.

It reduced Raimondo’s proposed fee on medical marijuana plants from $150 to $25. While the House measure exempts low income people from the fee, it still requires a new state tag for each plant – a move opposed by independent growers of medical marijuana.

While medical marijuana patients will pay more, beach goers will pay less under the proposed House budget. According to a news release from the House of Representatives, “Just in time for beach season, the Finance Committee slashed parking fees at state beaches — mostly in half — to better enable Rhode Islanders and visitors to enjoy one of the state’s greatest treasures. The cuts, effective July 1, eliminate hikes made in 2012, and apply to all types of passes: single-day weekend and weekday as well as season passes for residents, nonresidents and senior citizens. (Admission to state beaches themselves is free.)”

Charter school opponents should be even more pleased with the House budget proposal than with Raimondo’s version. According to the news release, “The [finance] committee moderated the governor’s proposal somewhat, allowing districts to reduce payments by either 7 percent of the per-pupil tuition cost or the average difference between per-pupil unique costs of the sending districts and those of the charter schools, whichever is greater. The committee also provided some temporary relief for districts with particularly high concentrations of students attending charter or vocational schools.”

And the House budget seems to make it easier for Rhode Islanders to generate more renewable energy. The proposal “expanded the state’s net metering program to allow “virtual” or off-site net metering by all customers, opening up access to renewable energy generation to more Rhode Islanders. Net metering is a practice that allows those who install renewable energy systems such as solar panels to connect them to the electric grid and receive credit on their bill for any excess energy they generate,” according to the House news release.

But a reader sent this comment: “The budget article 18 expands net metering, but it has a completely silly cap on it (major concession to Grid), and messes up the rates (another major concession). It will serve as a disincentive to net metering, not an incentive. The PUC is in the middle of considering the right net metering rate, and this is sort of like sticking a monkeywrench into their machinery. This is in no way a win, except superficially.”

The House is expected to vote on the budget bill next Wednesday.

June 17, 2015June 17, 2015

Budget bill passes House floor with almost no debate

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In what everyone thought would be a firestorm of debate, the RI House of Representatives unanimously passed the $8.7 billion FY 2016 budget with little to no discussion about many of the articles, including the much contested Medicaid cuts and pension settlement, as well as Governor Raimondo’s so called “job tools.” According to a House spokesperson, this is the fastest that the budget has gone through in nearly three decades.

The only budget articles that were seriously debated on the floor were numbers 11, which concerned taxes and revenues; and 18, which provided the funding to HealthSource RI, Rhode Island’s Affordable Care Act state exchange. There were two article introductions during the debate, one concerning the funding for the Rhode Island Public Transit Authority (RIPTA), and one simply to renumber the articles in the bill after its introduction. Representative Patricia Morgan (R-District 26), was going to introduce an article to fund bridge repairs, but recognized that she did not have the support to pass it.

Although discussion was sparse on the floor, Rep. Morgan was one of the few members who continually sparked debate, particularly over article 11, which had the longest discussion out of all of the sections voted upon. Amendments had already been proposed to the article, but had been struck down. Morgan proposed two amendments herself, the first of which would promote lean government standards for the state, and according to her, dramatically decrease costs for running state government.

“Many states at this point, have already started lean government initiatives, and it has given them a lot of fruit,” she said. “There are incredible efficiencies that have resulted from lean government.

Morgan planned to pay for the new service by taking $500,000 from the Newport Grand Casino and putting it towards creating a lean government initiative, which Governor Raimondo has already stated she supports. Her reasoning? That the casino was not in dire need of the funds.

“Last year, the new owner proposed $40 million for remodeling,” Morgan said. “If he has $40 million for that, I guess he can give up $500,000.”

The amendment saw staunch opposition, especially because, according to several representatives, 60 percent of the casino’s money goes directly back into the state.

“Just because Newport Grand may be part of corporate America, we are here to help businesses thrive in our economy,” Representative Dennis Canario (D-District 71) said.

“To take $500,000 out of Newport Grand would jeopardize the integrity of that business,” House Majority Leader John DeSimone (D-District 5), argued.

Although Morgan’s first amendment failed 71-4, she brought up another amendment immediately after that tried to use the same funds from Newport Grand to pay for a 38 Studios investigation.

“The people of this state deserve to know how it happened, why it happened, who did it, and try to keep it from ever happening again,” Morgan said.

Her second amendment did not even get the chance to go up for debate, as it was ruled not germane to the discussion. The ruling was met with cheers from other representatives.

Article 18 funded HealthSource RI, which has been hotly contested over the past few days due to restrictive abortion coverage language. However, Finance Committee Chairman Representative Raymond Gallison (D- District 69) introduced an amendment that would curb such restrictions, and allow access for those who require abortions even if their insurance plan has cited religious exemptions from covering them.

Surprisingly, the amendment passed with no discussion, but the article itself saw debate due to King V. Burwell, the current Supreme Court case determining whether or not states should receive tax subsidies from having their own healthcare exchanges. While some representatives thought that keeping the exchange would make Rhode Island less business friendly, it was upheld in the vote.

What is more striking than what was debated, though, is what was not. Cornerstone legislation in the bill went by without so much as a peep from representatives. Medicaid cuts, the pension settlement, Raimondo’s jobs initiative, professional licensing, all day kindergarten, school construction, and even appropriations of funds from FY 15 are just some of the examples of what saw next to no discussion. Even Gallison’s surprise article that raised RIPTA fares for the elderly and low income to $1, up from no cost at all, saw little debate.

After only three short hours, the budget was unanimously passed, with daylight still shining down on the State House.

“The House of Representatives is very committed to working together on behalf of the citizens of the state of Rhode Island,” Speaker Mattiello said of the speedy voting process. “That the House has worked very collaboratively with the Governor and the Senate President, and that there’s a focus on jobs and the economy. When we put out a pro-jobs budget, pro-economy budget, the members rallied around it and responded appropriately.”

Mattiello also did not rule out the option of a special fall session to handle Governor Raimondo’s proposed toll tax. It is actually very likely, he said.

As for Rep. Morgan, she believes that she was one of the only members of the House who actively stood up for what they believe in on the floor tonight.

“I’ll fight for the people of Rhode Island all day long. I’ll fight for better government in our state,” she said after the meeting. “But, I can’t do it alone. The people need to send me more support.”

“I don’t know why they didn’t speak up,” Morgan added. “There were things that should have been said. There was debate that should have gone on. There are things that are objectionable. I have no idea why people didn’t stand up and fight for the things that they believe in.”

But, even without the support for her amendments, Morgan still voted in favor of the budget because it was, for the most part, in line with her beliefs.

“I voted for the budget because there were a lot of really good Republican proposals in it, that I think will help Rhode Island, and I didn’t want to see them not get support.”

The bill will go to the Senate floor for hearing on Wednesday, where if approved, will become the official FY 16 budget for Rhode Island.

June 9, 2015June 9, 2015

House Finance considers state budget bill today

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Everyone’s eyes are on the State House as the budget for the next fiscal year is slated to be unveiled today. Governor Gina Raimondo released her proposed budget in March, and the legislative version will be introduced by the House Finance Committee today.

Based on what Speaker of the House Nicholas Mattiello (D-District 15), Senate President Teresa Paiva Weed (D-District 13), and Governor Raimondo have told media in recent weeks, a few things can be expected for the bill.

Raimondo’s tractor-trailer toll proposal will not be part of House budget proposal (at least not initially) but her Medicaid cuts will. Both Mattiello and President Paiva Weed have said that they have too many unanswered questions concerning the tolls for it to be implemented now. But, a special fall session to consider them is not out of the question.

Mattiello’s tax breaks on social security income will also be a key point of the budget. As it stands in Raimondo’s proposed budget, those who file as individuals with an income up to $50,000 are exempt from the income tax on their social security, and those who file jointly are exempt on incomes up to $60,000.

HealthSource RI will remain for another two years, with surcharges on individual’s monthly premiums averaging out at 2.86 percent, and .059 on small business’s monthly premiums.

Plans for economic development have also been interspersed throughout the bill, thanks to Raimondo’s proposed “jobs package.” Parts of this package includes tax breaks for businesses within the state, as well as a reallocation of taxes on hotels for tourism purposes. How the taxes are allocated is dependent on which one of Rhode Island’s 8 tourism districts the hotel is located in.

Money is also being allocated to the state’s environment, thanks to the Bays, Rivers, and Watersheds Fund. The language in the bill states that it will be used to “foster effective management, preservation, restoration, and monitoring of the bays, rivers, and watersheds.”

Higher education is seeing some changes as well. The “Best and Brightest” scholarship fund has been completely axed from the budget; the program gave scholarships to high school students going into college with hopes that they will stay in Rhode Island to teach in the public school system. The legislature also changes how students receive financial aid for college, giving more power to the office of the commissioner of postsecondary education, and creating a general allocation fund for higher education grants.

June 10, 2014

Real estate transfer tax will help get homeless off the streets

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A proposed increase to the real estate transfer fee is good news for the homeless in Rhode Island. That’s because the new revenue will benefit a rental voucher program that helps keep people off the streets.

“We are thrilled that the House Finance Committee ensured that this year’s budget invests in the long-term solutions to addressing homelessness and the lack of affordable housing in our state,” said Jim Ryczek, executive director of the Rhode Island Coalition for the Homeless. “Through a very modest increase to the fee paid in real estate transactions, the state is creating an ongoing, dedicated funding stream to fund the housing rental subsidy program and homeless prevention assistance and housing retention assistance programs.”

The real estate transfer fee is increasing from $2 per $500 of real estate to $2.30 per $500, said House spokesman Larry Berman, with new revenue going to benefit lead paint abatement programs, “shelter operations” and the rental voucher program. (Real estate sold for $200,000 owes $800 in fees currently, under the proposed structure it would owe $920)

Here’s the section from the House Finance Committee’s budget overview (section 28, p. 18):

The House Finance Committee recommends increasing the real estate conveyance tax from $2.00 to $2.30 per $500 or fractional part is paid for the purchase of property conveyed for more than $100. This is estimated to generate an additional $2.8 million. These funds will be used for the lead hazard reduction abatement program, shelter operations and rental housing subsidies, which are administered by the Housing Resources Commission. The recommended budget includes $2.5 million from general revenues for these expenses. The House Finance Committee includes $2.8 million from new receipts, to offset the loss of general revenues. This provides an overall increase of $0.3 million.

“The Massachusetts tax is $2.26 per $500, so Rhode Island will be only 4 cents higher,” said Berman. “But in Massachusetts, local communities are allowed to add on their own tax. For example the Martha’s Vineyard Land Trust has a tax on all the towns on the Vineyard. The Governor cut these two programs in his budget, so the Assembly is restoring them with this tax, which will then be dedicated to these programs so they will not be cut in the future.”

Added Ryczek: “This funding model builds on last year’s budget that funded rental vouchers for Rhode Islanders experiencing homelessness, and more importantly, it ensures that the state is investing in a long-term, strategic and proven approach to solving the homeless problem in our state. More than 125 Rhode Islanders will move from homelessness to stable housing because of the leadership by the General Assembly in last year’s legislative session. It is encouraging that House Finance is continuing its commitment to our most vulnerable Rhode Islanders experiencing homelessness and housing insecurity.”

June 9, 2014June 9, 2014

Wingmen agree! Cutting sales tax better than estate tax

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When it comes to reducing revenue, Justin Katz and I agree that it would be better to slash the sales tax than the estate tax exemption, in contrast to what the House Finance Committee thinks is the best course for Rhode Island.

But that’s about as close to agreeing on the proposed budget – or anything to do with government, for that matter – that we were able to reach on this week’s NBC 10 Wingmen segment.

News, Weather and Classifieds for Southern New England

June 19, 2013June 20, 2013

House budget bill: The good, the bad and the booze

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Rhode Islanders best not blink in June. If we do, we might just miss much new state policy being swiftly passed in the annual budget bill.

The tax and spending plan, and oftentimes some new policy tucked in for good (bad, or indifferent) measure, typically breezes through the General Assembly in the waning days of the legislative session. Any public debate happens during marathon late night meetings. Elected officials actually suspend open meeting laws to do so. Rhode Island’s budget process is truly democracy at its worst.

To that end, the best news about 2013 House Finance Committee’s budget – and the benefit is bipartisan – is that this year’s proposal didn’t sneak in any big picture policy changes; at least none that have been identified yet.

Last year’s budget bill retooled public education oversight but this year’s version does not yet include retooling economic development oversight as some expected. Tax and spending priorities belong in the budget bill, not public sector structure.

Similarly, regardless of whether one feels we should repay 38 Studios bondholders or not, the budget bill was not the ideal place for the state to make this decision. The proposal puts money aside to pay if that proves the most prudent path, and an additional $50,000 to study the ramifications.

The budget bill will also not decide if the new Sakonnett River Bridge be paid for by a use fee (capitalism) or by the people of Rhode Island (socialism). We should certainly have this conversation, and it should be done in the context of how to fund the nationally recognized need for better roads and bridges.

On spending

The budget bill doesn’t do much to help Rhode Island’s struggling cities, another great gift for bankruptcy lawyers. It ignores, for the second year in a row, Governor Chafee’s attempts to help urban areas hit hardest by the recession and state aid cuts. It did keep his $40 million new funding for public education, which is much better than a sharp stick in the eye but not nearly enough to neutralize the head start suburbs enjoy over cities in the race to the top.

Interestingly, creates a ~~new state mandate~~ that school districts to refinance construction debt. There are all sorts of repercussions to mandatory refinancing of debt, including giving schools a more vested interest in 38 Studios bonds. Update/clarification: the budget calls for a higher municipal share of refinance savings.

Social services were again cut, leaving some 6,500 poor people off of RIte Care, reports the Providence Journal.

The historic tax credit – technically a spending item – would be reinstated. It would allow the private sector to not pay up to $34 million in state taxes, but it’s capped at $5 million per project. Sorry Superman Building.

On taxes

Income taxes weren’t increased on the affluent nor were corporate tax rates cut. CVS keeps its lucrative loophole worth $15 million.

And the pharmacy giant isn’t the only drug dealer to make out in this year’s budget. Wine and spirit sellers will be given a sales tax holiday for two years. Beer, for some reason, wasn’t included (there’s something that feels regressive about lowering sales tax on wine and spirits but not beer).

The most interesting tax experiment, I think, is making locally-made art tax free. It seems to me that more people would cross state lines to buy art than have their dog groomed, but art is, by definition, subjective. Some may consider their poodle’s haircut art. It could also mean a giant tax break for a company like Alex and Ani if jewelry is considered art.

But despite opportunity for abuse, if the state is going to incentive growth through tax cuts, I’m glad it’s going to artists as this is the sector that has the best chance of building us a better economy.

May 31, 2012June 1, 2012

Budget Bill Restores Previous Cuts, Adds Sales Taxes

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It’s been called the year of restoration, in part because this year’s proposed budget will restore cuts made last year to programs for the developmentally disabled and low-income dental insurance.

The “education funding formula will be fully funded for the second straight year,” House Finance Committee Chairman Helio Melo said, noting that $22 million is appropriated in the proposal.

The House’s proposal is $156.4 million more than the governor’s proposal and almost $400 million more than last year’s enacted budget.

Increases will be paid for by Chafee’s proposed luxury clothing tax, but instead of kicking in at articles that cost more than $175 as the governor proposed the House budget calls for taxing items that cost more than $250. This tax is expected to raise about $5.9 million. The governor’s proposal would have raised more than $11 million. A $.04 per pack cigarette tax is also called for and would raise an estimated $1.8 million.

Melo there will be $9.6 million for the developmentally disabled programs in this year’s budget, about half of which will come from the federal government in matching funds. Last year, $24 million was cut which resulted in some program cuts and pay cuts for low wage workers.