R.I. lawmakers will face recession politics
PROVIDENCE - For a fourth year, Rhode Island lawmakers will start their annual session tomorrow grappling with one of the worst recessions since the Great Depression - though their leaders have few sweeping ideas for stemming a crisis that has left 12.7 percent of residents unemployed.
Democratic leaders who have a veto-proof majority expect the year will be dominated by recession politics: budget cuts, debates over tax increases, and a redesign of local government fueled mostly by desperation to trim spending. Along the way, they hope to invest in sectors that could produce jobs, though perhaps not for years down the road.
With just weeks before the new session, House majority leader Gordon Fox, a Democrat, said he was still thinking about a plan for economic development. He would support expanding ports in Providence and North Kingstown to boost shipping and wants lawmakers to break an impasse in Warwick delaying an expansion of T.F. Green Airport, which he considers another source of economic growth.
“You’re resetting a course that’s maybe going to get you relief in the future,’’ he said, explaining what he considers the benefits of investing in infrastructure.
Fox said he wants the House to create a formula for reliably determining how much state funding a school system can expect and also wants to lift a cap on charter schools.
Across the hall, Senate President M. Teresa Paiva-Weed, Democrat of Newport, said her goals include addressing a foreclosure crisis by reviving legislation that would require mortgage holders to offer mediation to homeowners at risk of losing their houses. Tenants would get a month of warning before being evicted as the result of a foreclosure, and mortgage holders would be responsible for maintaining foreclosed properties.
Paiva-Weed said she also wants to slim down the state bureaucracy for small-business owners who must deal with multiple government agencies, timelines, and procedures when trying to expand.
“Can there be a single process that looks the same in Middletown as it does in Lincoln?’’ she said. The room lawmakers have to maneuver will be limited by big budget problems.
Rhode Island was among the first states to slip into recession in early 2007 with a burst in housing prices that crushed its construction sector. An economy that relied heavily on declining manufacturing jobs took another big blow when a credit crisis on Wall Street severely curtailed lending.
With unemployment hovering around 13 percent, residents are paying less in income taxes and making fewer purchases that generate the sales tax. The state’s income has tumbled by millions of dollars, leading to big budget imbalances.
Governor Donald L. Carcieri, a Republican who must leave office after finishing his second term in 2011, recently proposed cutting $125 million in funding for cities, towns, and schools and help balance a deficit for the fiscal year ending in June. Local leaders immediately complained it would force them to lay off employees and cut back on services.
Fox was noncommittal on whether the General Assembly would accept Carcieri’s cuts. The Providence Democrat is running to succeed House Speaker William Murphy, a fellow Democrat, who plans to step down in early 2011.
“How can you give what you don’t have to the locals?’’ he said. “At the same time . . . they still have to provide schools and fire trucks and garbage services and all that stuff, so when is the quality of all your citizens adversely affected because you can’t afford to pay for this?’’
Taxes appear to be one issue splitting the chambers. Paiva-Weed and Senate majority leader Daniel Connors, Democrat of Cumberland, have said lawmakers must consider delaying a scheduled reduction in the flat tax for top earners and expanding the reach of the sales tax.
Last year, Murphy and Fox pledged not to raise the personal income, sale, or corporate income tax, although Fox was careful in an interview to avoid absolute promises.
Taxes are “always a last resort, not a first resort in down times. And I think we have to prove before we go there that we’ve done everything physically, humanly possible before we start raising taxes,’’ Fox said.
Leaders in both chambers agree they will consider plans to consolidate government services among cities and towns to save money, including a proposal recently submitted by Mayor David Cicilline of Providence. His package would allow Providence, East Providence, Pawtucket, Central Falls, Johnston, North Providence, and Cranston to create a county system for police, fire, and public works services.