R.I. governor seeks huge cuts in local aid
State faces deficit of $427 million
PROVIDENCE - The state of Rhode Island would cut millions of dollars in funding for local governments and schools, charge new bridge tolls, and increase fees for motorists under a plan Governor Don Carcieri submitted yesterday to help cope with a massive budget deficit.
The plan would eliminate about $135 million in state support for cities and towns and cut millions meant to support local school districts. Those funding cuts would not include previous reductions that Carcieri, a Republican, proposed for the current budget year, which lawmakers have not yet approved.
Carcieri said that nearly 13 percent of the state’s residents are unemployed, forcing them to trim their budgets. “They expect their government to do the same, which is to find ways to be more efficient and more effective and reduce spending,’’ he said.
His proposal is meant to close a $427 million shortfall in the fiscal year starting in July.
Democrats hold a veto-proof majority in the General Assembly and frequently rewrite Carcieri’s budget plans, though they have backed past cuts in local funding. But the governor may face more opposition this time. The Senate president and mayors have warned the cuts will force local governments to simply raise their property tax rates.
The state is struggling to wean itself from the hundreds of millions of dollars in federal stimulus money that helped it weather one of the worst recessions since the Great Depression. For example, Carcieri’s administration assumes that Rhode Island will receive about $95 million in additional stimulus cash, even though it has not yet been approved by Congress.
If that funding does not arrive, the state could cut the number of people eligible for government-funded health care, among other options, Gallogly said.
Carcieri’s plan would not raise the personal income tax, sales tax, or corporate taxes, but it would increase costs for state residents. He wants to impose a toll on the Sakonnet River Bridge equivalent to that charged on the Newport Bridge, currently $4 for people paying cash.
The extra money would first be used to pay for maintenance on the Sakonnet River Bridge. What remains would be used to repair 164 other bridges.
Carcieri hopes to stimulate hiring in the state by offering employers $10 million in tax credits if they take on new workers. The credit is designed for companies with at least five but not more 100 employees in Rhode Island.
Employers would receive a $2,000 reduction in their state tax bills if they hire an employee for at least 18 months, offer them health insurance, and pay wages of at least 2 1/2 times the minimum wage.
Carcieri also wants to reduce the minimum corporate income tax from $500 to $250.
Residents taking road tests at the Division of Motor Vehicles would have to pay a $25 fee. Prices for obtaining a state identification card would increase to $25, from $15, while the fee for filing an accident report would jump to $15, from $10.