Lawmakers return for start of rough year

PROVIDENCE—Rhode Island’s newest class of lawmakers returns to the State House Tuesday to take the oath of office, mug for photos and celebrate with their families and supporters. But a deep recession will cut short their celebration.

The General Assembly faces a long list of problems: budget shortfalls of more than $800 million spread over two years, soaring unemployment, plummeting tax revenues and a decision on a complicated overhaul to the fast-growing Medicaid program, which provides care for the poor, elderly and disabled.

House Majority Leader Gordon Fox, a Democrat, finds himself caught between competing and unpopular possibilities.

“Either you raise revenues, which is not a good thing to do when it comes to raising taxes,“ Fox said in an interview Friday, “or you keep cutting services, cutting services, cutting services.“

Lawmakers normally leave their toughest decisions for the late spring or early summer. This year, however, big choices will come fast, during a leadership transition and with a weakened opposition party.

Self-funded retiree Edward O’Neill, an independent, unseated Democratic Senate President Joseph Montalbano in November’s general election. Montalbano had served two decades in the General Assembly. Senate Democrats, who hold the majority, have endorsed Majority Leader M. Teresa Paiva-Weed to succeed Montalbano. If formally elected to the post Jan. 6, Paiva-Weed would become the first woman to lead the chamber.

Another noticeable absence will be Sen. Stephen Alves, chairman of the Senate Finance Committee, who was defeated in the primary election by a West Warwick baker.

House Speaker William Murphy, a Democrat, is seeking another two-year term and faces little opposition.

Democrats have long enjoyed a veto-proof majority in the State House, but their ranks are even stronger this year. During the November election, the GOP lost a net seven seats in the House, dropping the total Republican delegation to six out of 75 lawmakers. Republican Sen. June Gibbs also lost her seat to a Democratic challenger.

Budget problems promise to dominate the year.

Republican Gov. Don Carcieri will soon give lawmakers a spending plan designed to bridge a $366 million budget deficit for the year ending in June. Carcieri has said it will likely contain cuts in state funding to cash-strapped cities and towns. Democratic lawmakers expect Carcieri’s plan will arrive next week.

Under state law, Carcieri must submit another spending plan by Jan. 15 to cover the next budget year, when Rhode Island faces an estimated $486 million deficit.

Besides tackling the budget deficit, state lawmakers face a mid-January deadline for accepting or rejecting a deal Carcieri reached with the Bush administration to overhaul the state’s Medicaid program. Medicaid now consumes about a quarter of state spending and is growing.

Carcieri has warned that unless Medicaid costs are contained, health care spending will overwhelm other budget priorities, such as education funding and transportation repairs.

The deal would set a $12 billion cap on Medicaid spending over five years. In return for spending limits that save the federal government money, Carcieri would win flexibility to use Medicaid funding in new ways. Among other priorities, Carcieri said he wants more funding for services including visiting nurses and delivered meals that could help elderly residents avoid expensive nursing homes.