R.I. budget deficit reaches $434M for coming year
PROVIDENCE, R.I.—Rhode Island's budget deficit for the coming year will grow 13 percent to reach at least $434 million and force deeper cuts in state spending, budget officials said Friday.
The new calculations were adopted by Gov. Don Carcieri's budget director and fiscal advisers for the House and Senate. By law, the General Assembly must use their calculations when crafting the state budget.
Rhode Island's tax revenue has been falling as the state economy slows. Rep. Steven Costantino, the Democratic chairman of the House Finance Committee, said he has ruled out broad tax increases to balance the growing deficit, especially as residents are squeezed by higher energy prices.
"There's a lot of suffering going on right now," Costantino said. "I'm not going to add a tax increase. I think it's an awful message. The poor are suffering. The middle class are suffering."
When Republican Gov. Don Carcieri submitted his proposed budget in February, it was designed to close a deficit then estimated at $384 million. Carcieri said Friday that he would work with leaders in the Democratic-dominated General Assembly to deal with spending shortfall.
"Whatever course we take, we must avoid raising taxes to solve this problem," Carcieri said in a written statement.
Earlier this week, economists warned state officials that Rhode Island is the only New England state in recession. The unemployment rate stands at 6.1 percent, and experts predict it could reach 6.5 percent. State revenue from personal income taxes, sales taxes and business taxes have decreased.
Carcieri already signed a revised budget this month making deep spending cuts to close a $168 million deficit for the current fiscal year ending in June. It trims social welfare spending, cuts millions of dollars in state aid for cities and town and requires state retirees to pay more for health care coverage.
At the same time, Carcieri is trying to cut costs by eliminating 1,100 state jobs through layoffs and attrition.
