State Update
June 16, 2008
Brown University tracks the state legislative and budgetary processes and when necessary interacts with policy makers to provide the University’s perspective. Over the course of recent decades, both state and local governments have sought to transform Providence from a manufacturing hub known for its innovations in textiles, jewelry, and machinery, to a more global hub of knowledge-driven industries and institutions, which Brown is a part of. Recent state of the State and state of the City addresses, by our elected officials, have underscored the need to re-energize the state and local economy: recession fears, massive budget shortfalls, a challenging high-cost business climate, rising demand for government services, crisis in home foreclosures, and an education gap that threatens both state and local government’s long-term competitiveness are reasons why Brown University cares about the activities of our state and local governments.
Most importantly, Brown University cares about state and local government because the university has worked in partnership with them since its founding. This partnership is based on our common interest and ability to come together to strengthen the state and local economies by identifying new opportunities for growth that take advantage of the industry, academic, and research strengths of the university, the state, and region. We also work collaboratively with RIIHEA on these matters.
Below is a brief update on the status and state of affairs we in Government Relations and Community Affairs are following.
State Budget Highlights: $6.892 billion
On June 11th, the House Finance Committee unanimously approved a $6.892 billion budget for the 2009 fiscal year, reducing state spending by $85 million from the current year to address the state’s deficit.
The savings will be achieved without raising citizens’ taxes, but through state employee attrition, cuts to health and welfare programs, a $15 million total cap on the state’s move production tax credit and increases in traffic violation fines.
The plan softens the blow to some programs hit hard under the governor’s original budget proposal, cutting fewer children from Head Start early childhood education program and far fewer low-income adults from Rite Care subsidized health care program. The proposal reduces the governor’s proposed cuts to Head Start from 400 children to 300 and cuts 1,000 adults from Rite Care instead of the 7,400 the governor had proposed.
The House Finance Committee added a total of $13.6 million in education aid to cities in towns through new revenue from 24-hour gaming, and restores $300,000, about half the funding that the governor planned to cut, from the free breakfast programs in schools.
It keeps state aid to cities and towns at the level set through a reduction earlier this year, but adds a new provision that prohibits municipal health-care contracts from requiring the use of a specific health care provider. Municipal leaders sought the change to allow them to use whichever insurance provider will cost them less.
The budget increases payments to hospitals for uncompensated care by $9.6 million and payment to community health centers by $1.2 million.
It also includes issuance of $87 million transportation bonds, but cuts issuance of $35 million bonds for open space and $15 million for water pollution reduction efforts.
The plan includes a $91 million savings on state personal, some of which is expected to come from a large up-tick in retirements due to upcoming changes in state retiree health benefits. Specifics on other measures to produce the savings will be negotiated with state employee unions.
The full House of Representatives is scheduled to vote on the Plan Wednesday, June 18th at 2p.m. It will then go to the Senate for a vote before heading to the governor’s desk.
Special note:
STAC received level funding for FY 09 at $1.5 million
The State of the City
The City was facing a 2.9million budget cut from the state and a looming deficit for FY 09. However, given the budget bill approved by the state House Finance Committee on June 11th, the cut may be avoided. Mayor David Cicilline said in his most recent State of the City address that the salad days of constant, leaping progress may soon be over in Providence, and the state and national economies and political climates are the cause. The Mayor has proposed to overhaul the state tax system, consolidation of school districts, regionalized public safety and public works services, and state-level initiatives to make Rhode Island more energy efficient---all coming at the state, not the city, level. In addition, the mayor is planning to submit legislation to the General Assembly that will encourage tax-exempt institutions, such as universities and hospitals to spin off new businesses to produce jobs and expand the tax base. While much of his address was focused on state-level problems, and the tone of his speech was gubernatorial, the Mayor did ask that the City Council modernize the pension system and stated that he would try to reach agreements on labor union contracts. These activities are ongoing.