Governor's $7 billion budget would force layoffs, service cuts

PROVIDENCE, R.I. --Hundreds of state workers would be laid off and social spending programs would be slashed to close a $350 million budget deficit under a budget proposal released Wednesday by Gov. Don Carcieri.

The Republican governor's $7.02 billion spending plan also taps into the state's rainy-day fund to help close the gap. But it avoids tax increases and pumps money into education initiatives backed by Carcieri, a former math teacher, including expanding nursing programs and modestly increasing education assistance for cities and towns.

"This is the most difficult budget I've had to manage since I was elected governor," Carcieri said at a news conference.

He justified cutbacks by warning that expenditures were projected to grow 9 percent for the 2008 fiscal year starting in July. Revenue was only projected to increase around 4.3 percent.

"In other words, we were scheduled to spend twice as much as we hoped to earn," Carcieri said.

By law, Rhode Island must pass a balanced budget. Carcieri said his budget relied on several one-time income sources, such as land sales, to make ends meet.

State workers are among the groups hit the hardest. Carcieri's plan calls for saving $9 million by firing 168 state workers, both unionized employees and management. Carcieri's plan would also privatize the food service and housekeeping staffs at a state hospital and veteran's home, eliminating an additional 214 workers.

All nonessential employees would have to take seven unpaid days off saving $10.8 million, Carcieri said. Four of those days would be scheduled before July. The rest would fall around the Thanksgiving, Christmas and New Year's holidays.

J. Michael Downey, the president of Rhode Island Council 94, the largest union of state employees, said the unpaid days would violate provisions in the union's contract.

His union plans to argue against the proposed job cuts, and Downey said he was skeptical about the quality of work private contractors provide.

"They promise eight hours of work, and they send them in for two hours," Downey said. "It sounds nice, it starts nice, but it always ends up costing more money."

Carcieri, elected by a slim margin in November, was criticized by Democrats during last year's campaign for proposing cuts to the health care programs for the poor, elderly and disabled. His budget plan this year calls for similar reductions.

As required by a new federal law, Rhode Island health officials will begin demanding more proof of U.S. citizenship, for example a birth certificate or passport, before allowing people to enroll in subsidized health care services.

Those changes could force an estimated 5,700 people off RIte Care, the state's insurance program for the needy, said Gary Alexander, the acting director of the Department of Human Services.

For the first time, several state-run health care programs would impose a $1 co-payment for generic drugs and a $3 co-payment for brand-name prescription drugs. Carcieri's budget also would reduce by 10 percent the reimbursements state authorities make to hospitals for outpatient services.

One of the larger social spending cuts would tighten the eligibility requirements for families that use state-subsidized child care programs, probably eliminating about 3,800 children from the program. Those children would largely come from families that already contribute some money toward their child care, Alexander said.

He acknowledged that low-income parents who can't afford private child care could wind up collecting welfare or unemployment checks because they might have to leave their jobs to care for children.

"I'm hopeful that these people will not end up on the welfare rolls," Alexander said. "Ultimately, no one knows what could happen in a situation like this."

Rep. Thomas Slater, D-Providence, questioned whether some of Carcieri's health and human services cuts will cause more spending elsewhere. The proposed budget calls for the Department of Children, Youth and Families to gradually end social services for clients older than 17 years old.

"What's going to happen?" he said. "They're going to end up either in the homeless shelters or they're going to end up in the prison, one or the other."

Carcieri promised at his inauguration in January to use his second and final term to improve the state's education system. His budget offers a modest 3 percent increase in state education aid to local cities and towns and increases by $9 million the money available for college scholarships.

The spending plan also calls for hiring six new instructors to expand nursing programs at the University of Rhode Island and Rhode Island College.