Lawmakers plan hearings on R.I. budget crisis

PROVIDENCE—Lawmakers in a state with one of the nation’s highest unemployment rates will debate next week whether there are no-cost options for stimulating Rhode Island’s sagging economy.

The House Finance Committee will hold a second special meeting Monday to review how the state wound up with one of the worst budget imbalances in the country. The Democratic-dominated committee will focus its first two meetings this week on spending by Republican Gov. Don Carcieri’s administration.

Wednesday’s session is dedicated to debating low- or no-cost stimulus ideas. Rhode Island and Michigan posted 9.3 percent unemployment rates in October, and the states have consistently led the nation in unemployment.

Long hindered by a declining manufacturing sector, Rhode Island started tipping toward recession more than a year ago when a bubble in housing prices suddenly burst. A more recent credit crisis and financial meltdown on Wall Street have exacerbated Rhode Island’s problems.

House Speaker William Murphy, a Democrat, recently suggested that Rhode Island should consider a massive public works project to put the unemployed to work. While Carcieri recently said his administration was considering low-cost stimulus ideas like guaranteeing loans to small businesses hurting for credit, the governor has warned the budget deficit leaves little room for maneuvering.

The state faces a more than $350 million deficit for the fiscal year ending in June, while a shortfall of almost $490 million is expected in the coming fiscal year.

“We don’t have the funds to put a stimulus package out there,“ said state Rep. Thomas Slater, a Democrat who sits on the finance committee.