Carcieri proposes slashing local aid, raising taxes
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Carcieri's Address Debrief
URI professor Len Lardaro and R.I. Treasurer Frank Caprio talk about the Governor's address.
Rhode Island Governor Don Carcieri
NBC 10
Published: January 7, 2009
Updated: January 7, 2009
PROVIDENCE—Gov. Don Carcieri proposed an emergency budget plan Wednesday that would slash state funding for cities and towns, raise taxes and delay paying a legal settlement over a deadly nightclub fire to close a massive budget deficit worsened by a sinking economy.
The nearly $7 billion budget plan attempts to close an estimated $357 million shortfall for the fiscal year ending in June, almost 11 percent of expected state spending. Rhode Island had a 9.3 percent unemployment rate in November, one of the worst in the country.
The state’s economy fell earlier and faster than the rest of the nation as its housing bubble burst, its manufacturing sector suffered continuing job losses and a national credit crisis squeezed the small businesses that dominate Rhode Island’s economy.
“I anticipate that things are likely to get worse before they get better,“ Carcieri said in remarks prepared for a live television address.
Democrats hold a veto-proof majority in the General Assembly and can easily revamp budget plans from the Republican governor. House Speaker William Murphy could not immediately comment on Carcieri’s proposal, his spokesman said.
Under the proposal, Rhode Island would cut state funding to already-strained cities and towns by almost $75 million. Towns might lay off workers and school teachers, pick up trash less frequently or do less plowing after snowstorms, said Daniel Beardsley Jr., executive director of the Rhode Island League of Cities and Towns.
As compensation for the funding cuts, Carcieri has proposed saving school districts money by centralizing school food services, creating a statewide purchasing system for school supplies, increasing health care co-payments for municipal workers and limiting their pension benefits.
Carcieri also wants to delay paying a $10 million legal settlement to survivors and family members of victims killed in a Feb. 20, 2003, blaze at The Station nightclub in West Warwick. The governor intends to make the payment during the next budget year, Carcieri spokeswoman Amy Kempe said.
The blaze began when a rock band’s pyrotechnic display ignited flammable soundproofing foam lining the club’s walls and ceiling. Victims sued Rhode Island because a fire marshal failed to notice
the foam during an inspection.
Carcieri has refused to raise personal income, sales or corporate taxes to close the budget shortfall. But his plan would include a $1 hike in the state’s cigarette tax, raising it to $3.46 per pack. It would also raise $3.7 million by increasing taxes on health insurance companies.
The state work force could see benefit cutbacks. Facing budget deficits last year, Carcieri and lawmakers decided to reduce retirement benefits for state workers, prompting more than 1,700 to leave. The governor’s current budget plan would reduce automatic cost-of-living increases for state employees who retire after April 1 and scale back pensions for disabled workers.
Reader Reactions
In response to the comment by HOPEWHISTLE. you state “ unlike other municipal workers teachers contribute to their pensions.“ GET YOUR FACTS RIGHT if you are going to post. ALL municipal employees contribute to their pensions NOT just teachers. I contribute 11 % of my pay. and since you wish to disparage other municipal workers just remember Teacher costs amount to 70 % of most budgets while public saftey amounts to 10-15%.
The pension raises many questions and misconceptions. Most private employees do not have a defined benefit plan. the state does. A DB plan sets the amount or percentage of salary a person receives when retired if qualification requirements are met.
Most private employers have gone to either Defined Contribution plans; where a percent of current income is contributed to the plan based upon either an agreed percentage or current profits; or a 401k plan (“Salary Reduction Plan”) where each employee contributes a set percentage and some companies provide some match. In a Defined Contribution Plan, an individual’s retirement benefit is based upon the investment results that individual achives.
State workers benefit is based upon income, years of service and COLA.
Do you really think the Gov. cares whats truely going on. he is all done. He can not run again - Thank God. If he really cared he would cut his staff in half. He could do this with no problems. Then have the other elected officials do the same. Cutting city & town aid, wow does he want whats going on in East Prov. to be going on elsewhere. Cut aid so the cities & towns have to layoff; that will keep us #1 for unemployeement. Hold off a court ordered payment, doesn’t he need permission or does he think he is GOD. How’s the Lottery payments doing. Has everyone paid up (hint our not so casinos. REMEMBER the Lottery receipts were originally for the schools - o well. Less plowing because of lack of money then he (Gov) can say it’s the city not the state. The storm we had in dec on Friday, he could have saved a ton of $$ if he didn’t order the crews in @ 2 AM (12 hours before the snow fell)
I like the one health plan for all state and municipal employees but the plan needs to be comprehensive. The one and only current UnitedHealth plan that is available to state employees is horrible. We pay for the plan so let US pick our own plan.
My husband is a state employee and pays 8.5% into the state pension system every pay period. Unlike what the Governor wants people to believe the pension system is funded by those contributions. Those monies are available for the state to invest for the number of years that the employees are working. If the system does not have enough funds for the retirees who work hard in the name of State service, then the Treasurer’s Office needs to be questioned about these investments. It’s easier to point fingers than to ask the hard questions.
And we are not one of the worst in the country; we are the worst for unemployment.
But he as the solution since we have 50K + unemployed let’s slash state funding for cities and towns, raise taxes
What about reducing layers of management, salary cuts, Governor why won’t work for a $1.00 for a year that would probably help?
I am a 41 year old rescue worker. To see how well this plan would work, I propose that we take a sample of 100 59 year old Rhode Islanders and have them carry a 350 pound patient down 3 flights of stairs. Maybe Carchieri will volunteer to be that patient.
Desperate times do, in fact, call for desperate measures. The changes that Gov. Carcieri has proposed seem necessary. I trust that he knows what he’s doing when it comes to the state budget.
Still, how disappointing that Gov. Carcieri failed to make explicit one very important fact: Unlike other municipal employees, public school teachers and administrators pay a significant portion of our wage towards retirement. My spouse and I contribute $1300 a month to the state retirement system. This is mandated. It is a very real possibility that, by the time we retire, we will enjoy few (if any) state pension benefits.
To prove a point, I pay nearly as much in the mandatory retirement system as I do in federal income tax! It’s time to free public school employees from this broken system and let me invest my money elsewhere! The State of Rhode Island practices thievery!
One other thought… How in the world does the gov. expect local cities and town to make up for a 6% cut in state aid? What a shame that his think tank can only come up with eliminating the mandate on bus monitors. This is why the Gov. needed an economic summit, an idea he refused even to consider. It seems as if the Gov. thinks his people are the only ones with answers. He has shown poor leadership in this regard, in my opinion.
If taxes need to be raised to pay for these well deserved pensions increase all taxes. Who is more deserving than state workers who give all they can for us. Why should teachers or state workers contribute towards health care expenses, just raise taxes already. We all have extra money making 2% at the bank I would rather invest in RI
How about having the judges and magistrates contribute towards their pensions, and put them in line with the municipal workers. What do the judges get???? Municipal workers, specifically police officers, contribute 8-9% of their salary and can collect 50% after 20 years of service. Can you imagine what the criminal society would be like with majority of the police force in their fifties? Being a Police officer and a firefighter is a young mans job.
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