Senate passes state budget

PROVIDENCE -- Gov. Don Carcieri will sign a $6.9 billion budget proposal that tries to close a massive budget deficit with deep spending cuts, he said Thursday.

The Republican governor and the Democratic-dominated General Assembly have struggled for months to close a budget shortfall of at least $422 million -- or nearly 12 percent of expected state spending -- without significantly raising personal income, sales or business taxes. By law, Rhode Island must have a balanced budget.

Carcieri could sign the proposal as early as Friday. It passed the Senate 36-2 Thursday night after being approved unanimously in the House one day earlier.

"Working together over the last six months, we have successfully resolved a nearly half-a-billion dollar budget deficit without raising broad-based taxes," Carcieri said in a written statement. "That is a major accomplishment by any standard."

A slumping economy and rising expenses have contributed to Rhode Island's worst fiscal crisis in nearly two decades. Lawmakers kept intact much of Carcieri's original budget proposal from February, which avoided tax increases by cutting deep into social welfare spending.

No one in the Senate tried to revise the budget proposal Thursday, but several lawmakers criticized the spending cuts and said the state should have considered a tax increase.

"I honestly feel we've kicked some people under the bus," said state Sen. Daniel Issa, D-Central Falls, referring to funding cuts for health care and heating assistance for the needy.

During this week's debate, Democratic leaders in the General Assembly said that raising taxes would only deter economic growth in Rhode Island.

"Yes, we did have to make some tough decisions. And the choices that we had were slim," said state Sen. Stephen Alves, D-West Warwick, chairman of the Senate Finance Committee. "We weren't going to be able to tax our way out of this budget problem."

The proposed budget would lower the current five-year cap on welfare payments to four years and limit increases in Medicaid spending for the poor and elderly. If signed, it will remove more than 200 children from of an early childhood learning program and eliminate state-subsidized health insurance for 1,000 adults.

It also repeals a program designed to provide discounted electricity, natural gas and heating oil to the poor and help them catch up on overdue utility bills.

Under the proposal, fines would increase $10 for drivers convicted of motor vehicle violations, a change that could raise an estimated $1.4 million. The state would also increase taxes on health insurers, including Blue Cross & Blue Shield, United HealthCare of New England and Delta Dental. Those companies could respond by increasing costs for their subscribers.

Meanwhile, the House is trying to get through 100 remaining bills before it adjourns for the summer on Friday.

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