Rhode Island state budget

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Rhode Island closed a $660 million deficit for the FY 2010 budget finalized in June 2009[1] only to see an estimated $100 million (as estimated in October but since doubled) deficit develop as first quarter revenue figures deteriorated. The state collected $30.2 million less, 4.7%, than anticipated for the first three months of the fiscal year starting July 1, 2009. Gov. Donald Carcieri warned the situation could get worse as the turning point in the economic downturn has not been reached and in light of the state's growing 12.8% unemployment rate.[2] September 2009's unemployment numbers confirmed his prediction, coming in at a record 13%.[3]

Rhode Island's top budget officials released their latest projections on November 10, 2009 after the Revenue Estimating Conference "conservatively" gauged and agreed the current FY 2010 budget shortfall as being $200 million. The conference is required by law for House, Senate, and Governor's budget staff to meet twice a year to update and revise revenue levels.[4] The original FY 2010 budget in June anticipated a $3.8 million surplus.[5]

The FY 2010 budget passed by the Rhode Island General Assembly also had implementation problems to reduce state salary expenses. The General Assembly proscribed Gov. Carcieri cut $67.9 million from "statewide reductions to personnel and operating expenses,"[6] but did not specify how the reductions were to be achieved. Gov. Carcieri planned 12 state government "shutdown" days during FY 2010 with the first on September 5, 2009 to meet the budget's stipulation. The state employee unions sought legal means to prevent the shutdown plan, obtaining by appeal a temporary stay against it on September 3, 2009 from Rhode Island Supreme Court Justice Maureen McKenna Goldberg.[7] Being unable to meet the budget's payroll reduction requirements with furloughs, Gov. Carcieri announced that same day he will need to send out 1,000 layoff notices to state employees stating:[8]

"This decision by Justice McKenna Goldberg may just be the straw that broke the camel’s back, sending this state down the path to financial ruin, as it gives greater weight to union and special interest demands rather than the fiscal reality of the state and the employment of state workers,” said Governor Carcieri. “Preventing the state from moving forward with the shutdown days cripples our ability to address growing budget gaps, and stops the executive branch from fulfilling its constitutional duty to balance the state’s budget.”

“The financial reality we face is unchanged by her decision. The fact is, we are continuing to lose revenue and our fiscal health is deteriorating. Her decision does change, however, our ability to cope with this reality as it strips us of reasonable options to manage through this recession.”

“She has left me with no option but layoffs. I have asked my department directors to identify the last 1,000 people hired and begin the process of layoff notifications.”

“It should greatly disturb every state employee and every Rhode Islander that labor leaders are willing to sacrifice people’s jobs so they can maintain their stranglehold on the citizens of this state.”

The state employee unions finally reached an agreement with Gov. Carcieri in October 2009, making concessions to delay by 6 months planned 3% raises on July 2010 and accept 8 days off this year and 4 days off next year.[9]

The Rhode Island General Assembly held a short, two-day special session at the end of October 2009 to finish up unfinished business from the regular session,[10] but did not address the budget crisis waiting for the October Revenue Estimating Conference's meeting from October 30 - November 10 to update revenue projections and the extent of the deficit. House Speaker William J. Murphy held a closed-door Democratic meeting of House members November 5 to discuss ideas to deal with the budget and plans an economic forum on December 1, 2009 in preparation for the January 2010 Session start.[11] The Rhode Island Senate plans an Economic Policy Summit December 9, 2009.[12]

[edit] Budget Background

The June 2009 finalized FY 2010 state budget expenditures were set at $7.81 billion, $146.2 million more than Gov. Carcieri recommended. The General Revenue budget is $3 billion, $78.7 million less than the Governor's recommendation and $0.8 million less than FY 2009 ($404.9 million less than FY 2008). The budget incorporates $633.5 in federal stimulus money, $189.3 of which is directly for state budget relief.[13]

Rhode Island's fiscal year begins July 1 and ends June 30 of the following year. According to the state Constitution, every year the Governor must present a spending recommendation to the Legislature. However, prior to the Governor's presentation to the Legislature on the third Thursday in January, the Governor reviews individual agency requests along with past and present expenditure and revenue data. Both the Senate and the House use the following months to making necessary adjustments to the proposed budget bill. Once both houses approve a final budget the bill returns to the Governor who may veto legislative appropriations. The Legislature may override any veto by a two-thirds majority vote. [14]

[edit] Budget figures

The following table provides a history of Rhode Island's expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)
2000 $6.4 [15] $33.6 [15]
2001 $7.2 [15] $35.1 [15]
2002 $7.9 [15] $36.9 [15]
2003 $8.4 [15] $39.4 [15]
2004 $8.9 [15] $42.1 [15]
2005 $9.2 [15] $43.1 [15]
2006 $9.6 [15] $45.7 [15]
2007 $10.1 [15] $46.9 [15]
2008 $10.5 [15] $48.1 [15]
2009 $11.0* [15] $49.3* [15]

[edit] Accounting Principles

The Office of the Auditor General (OAG) is the State of Rhode Island's legislative audit agency, conducting financial and performance audits to provide independent information to the General Assembly on a variety of topics including the State's financial condition, its use of federal funds in compliance with federal law and regulations, and whether programs are operating efficiently and effectively. The OAG's audit reports are published online. Ernest A. Almonte has been the Auditor General of the State of Rhode Island since 1994.[16]

The Institute for Truth in Accounting (IFTA) rates Rhode Island “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Rhode Island's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[17] Rhode Island's CAFRs are annual publications of the Rhode Island Office of Accounts and Control under Marc A. Leonetti as State Controller. Despite the tardiness of previous CAFRs, the Office of Accounts and Control already has posted the preliminary 2009 CAFR on its Web site.[18]

The Office of Accounts and Control is responsible for the financial integrity and accountability of state government through sound administrative and accounting controls and procedures. The office is also responsible for the preparation and/or coordination of several publications, including the Comprehensive Annual Financial Report, Condensed State Financial Report, State Payroll Manual, Procedural Handbook of the Department of Administration, and the Consolidated Statewide Cost Allocation Plan.[19]

Credit Rating Fitch Moody's S&P
Rhode Island[20] AA-Aa3AA


[edit] Economic Stimulus Package

Rhode Island is expected to receive $1.08 billion from the $787 billion dollar economic stimulus.[21] All told, the federal stimulus plan would create or save 12,000 jobs in Rhode Island, based on White House estimates.[22]
For more information on how the federal stimulus funds are being used in the state of Rhode Island, visit the state recovery website.

According to preliminary reports, Rhode Island is expected to receive:

  • $3.4 million will be used towards local train stations [23]
  • $165 million in stabilization funds [24]
  • $135 million towards public school and three public colleges [24]
  • $11 million for the Providence VA Medical Center [25]
  • $17 million to retrain workers and employ youth [26]

[edit] Budget transparency

Rhode Island began posting its checkbook register online in February of 2008. The site was created using existing monies within the current state budget.[27] It allows citizens to view the Treasury's Accounts Payable expenditures.[28] The checkbook register was posted by the Treasurer of Rhode Island, Frank T. Caprio as fulfillment of his campaign promise made in 2006:

"This pilot project achieves a key priority of my administration. Our hope is that the Office of the General Treasurer's transparency site will quickly become the model for state and local government in their efforts to be more accessible and accountable to the taxpayers of Rhode Island," Treasurer Caprio said.[28]

The site also contains information on the current years fiscal statement, budgets and some general salary data.[29] The state also has various Independent transparency sites.

Rhode Island's Department of Administration began posting its expenses online in February, 2009.[30] The site is accessible here. Other departments and government offices have since posted their spending records online as well.

[edit] Legislation

Currently no legislation has enacted transparency measures within the state.

[edit] Government tools

The State of Rhode Island maintains its own Transparency Portal, which contains links to the FY 2009 financial records and personnel statements of fifteen government departments. These individual Transparency Portals can be accessed via the links below.

  • Department of Children, Youth and Families Find out how much of CYF's $240,913,187.11 FY 2009 expenditures went towards residential services, foster care payments, and subsidy programs for state dependents and delinquents.
  • Deparment of Health Analyze three major components of DOH's $76,983,162.37 FY 2009 budget: pharmaceuticals, training consultants, and medical supplies.
  • Office of the Adjutant General/Military Staff See how much money is spent on building renovations and improvements, renting outside properties, and fuel by the Office of the Adjutant General/Military Staff.
  • Department of Public Safety Find out how much the DPS spends on State Police retirement pensions, construction in progress, and military supplies.
  • Department of Education In FY 2009, RIDE spent $942,454,306.39 on projects such as education and community aid, teacher retirement pensions, and scholarships, loans, and grants.
  • Department of Corrections DOC expenditures for FY 2009 totaled $214,932,485.49, with large portions spent on medical care and pharmaceuticals, building maintenance and repair, and ISF overhead/service charges.
  • Department of Revenue Look at DOR expenditures on lottery commissions, postage and postal services, and contruction in progress.
  • Department of Elderly Affairs The DEA is responsible for public transit transfers, grants, and other financial services for the elderly.
  • Department of Business Regulation The Rhode Island Department of Business Regulation spent $9,753,489.88 in FY 2009, including large expenditures on actuarial financial services, postage and postal services, and management consultants.
  • Department of Labor and Training Much of the DLT's FY 2009 expenditures went towards non-state SDA payments, municipal police and fire pensions, and non-taxable claims, settlements, judgments, and torts.
  • Department of Environmental Management Find out how much the DEM spends on land, renting outside property, and environmental services.
  • Department of Transportation Major expenditures in the DOT FY 2009 budget include transfers to the Garvee Fund, infrastructure maintenance and improvement, and transfers to the Economic Public Transit Authority.
  • Office of the Governor See how much of the Office of the Governor's $4,943,911.60 FY 2009 budget went into ISF overhead/service charges, office supplies and equipment, computers, and telephones.
  • Department of Administration The DOA spent $791,990,050.26 in FY 2009, large portions of which went towards appropriated aid, medical claims and premiums, and transfers to the RI Convention Center Authority.
  • Office of the General Treasurer Find out how much the Office of the General Treasurer spent on refunds and bad debt, non-taxable and taxable claims and settlements, and renting outside property in FY 2009.

[edit] Economic Stimulus Transparency

  • The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[31]
  • Rhode Island will receive an estimated $697,905,208.[32]
  • The economic recovery website to show how legislators and government officials in Rhode Island are spending Federal funds is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.[33][34]

According to the ARRP website, Rhode Island’s fictitious 86th Congressional District saw nearly 60 new jobs develop in their community with the help of more than $10 million in stimulus funds. However, Rhode Island has only two Congressional Districts. In total, $11,917,875 went to save or create 57.9 jobs in non-existent Districts in Rhode Island.[35]

[edit] Independent transparency sites

The Ocean State Policy Research Institute has launched a transparency website called the Transparency Trainthat provides access to a variety of websites designed to present public information in a Google-style searchable format.

The Rhode Island Statewide Coalition Foundation maintains a transparency website called the www.themoneytrail.org.as well as www.rhodeislandvotes.org.which displays comprehensive legislation and voting records.

The Ocean State Policy Research Institute has also recently established www.ristimulus.org, a transparency website dedicated to tracking the federal stimulus money coming into the state. RI Stimulus Watch provides users with information on all public projects being funded by the federal stimulus money and allows the public to vote on whether or not they support each project, as well as to post comments. Projects can be sorted by cost, location, and most/least critical (based on user ratings).

In addition, the Ocean State Policy Research Institute is developing a site dedicated to transparency in public school spending, which it plans to launch later this year.

[edit] Public employee salary information

The Providence Journal is conducting a continuing report of Public Payroll in Rhode Island.

The Ocean State Policy Research Institute's existing independent transparency site, www.transparencytrain.org,also contains salary data for employees of the state and municipality over the last two years.

The Rhode Island Statewide Coalition Foundation's new independent transparency site, www.themoneytrail.org,contains salary data for employees of the state and municipality over the last two years.

[edit] Government transparency site

The State of Rhode Island maintains its own Transparency Portal, which contains links to the FY 2009 financial records and personnel statements of fifteen government departments. These individual Transparency Portals can be accessed via the links below.

  • Department of Children, Youth and Families Find out how much of CYF's $240,913,187.11 FY 2009 expenditures went towards residential services, foster care payments, and subsidy programs for state dependents and delinquents.
  • Deparment of Health Analyze three major components of DOH's $76,983,162.37 FY 2009 budget: pharmaceuticals, training consultants, and medical supplies.
  • Office of the Adjutant General/Military Staff See how much money is spent on building renovations and improvements, renting outside properties, and fuel by the Office of the Adjutant General/Military Staff.
  • Department of Public Safety Find out how much the DPS spends on State Police retirement pensions, construction in progress, and military supplies.
  • Department of Education In FY 2009, RIDE spent $942,454,306.39 on projects such as education and community aid, teacher retirement pensions, and scholarships, loans, and grants.
  • Department of Corrections DOC expenditures for FY 2009 totaled $214,932,485.49, with large portions spent on medical care and pharmaceuticals, building maintenance and repair, and ISF overhead/service charges.
  • Department of Revenue Look at DOR expenditures on lottery commissions, postage and postal services, and contruction in progress.
  • Department of Elderly Affairs The DEA is responsible for public transit transfers, grants, and other financial services for the elderly.
  • Department of Business Regulation The Rhode Island Department of Business Regulation spent $9,753,489.88 in FY 2009, including large expenditures on actuarial financial services, postage and postal services, and management consultants.
  • Department of Labor and Training Much of the DLT's FY 2009 expenditures went towards non-state SDA payments, municipal police and fire pensions, and non-taxable claims, settlements, judgments, and torts.
  • Department of Environmental Management Find out how much the DEM spends on land, renting outside property, and environmental services.
  • Department of Transportation Major expenditures in the DOT FY 2009 budget include transfers to the Garvee Fund, infrastructure maintenance and improvement, and transfers to the Economic Public Transit Authority.
  • Office of the Governor See how much of the Office of the Governor's $4,943,911.60 FY 2009 budget went into ISF overhead/service charges, office supplies and equipment, computers, and telephones.
  • Department of Administration The DOA spent $791,990,050.26 in FY 2009, large portions of which went towards appropriated aid, medical claims and premiums, and transfers to the RI Convention Center Authority.
  • Office of the General Treasurer Find out how much the Office of the General Treasurer spent on refunds and bad debt, non-taxable and taxable claims and settlements, and renting outside property in FY 2009.

[edit] See Also

Rhode Island taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

[edit] References

  1. ↑ Rhode Island Legislative Press Bureau, "The year in review at the General Assembly," November 6, 2009
  2. ↑ WPRI.com, "State deficit grows by $30.2 Million," October 7, 2009
  3. ↑ The Providence Journal, "Rhode Island unemployment rate reaches 13 percent," October 16, 2009
  4. ↑ The Providence Journal, "R.I. deficit projected at $200 million for current year," November 11, 2009
  5. ↑ House Fiscal Advisory Staff, "Budget as Enacted Fiscal Year 2010," August 19, 2009
  6. ↑ House Fiscal Advisory Staff, "Budget as Enacted Fiscal Year 2010," August 19, 2009
  7. ↑ The Providence Journal, "Update: State will stay open on Friday, justice decides," September 3, 2009
  8. ↑ Gov. Carcieri Press Release, "Governor Carcieri Strongly Disagrees with Justice McKenna Goldberg’s Decision to Block Shutdown Day," September 3, 2009
  9. ↑ The Providence Journal, "RI, unions officially end court fight over government shutdown," October 14, 2009
  10. ↑ The Providence Journal, "R.I. House will convene special session on Oct. 28-29," October 22, 2009
  11. ↑ The Providence Journal, "Office of the Speaker Letter," October 19, 2009
  12. ↑ The Providence Journal, "Senate President Letter," October 21, 2009
  13. ↑ House Fiscal Advisory Staff, "Budget as Enacted Fiscal Year 2010," August 19, 2009
  14. ↑ State of Rhode Island,"Budget process primer," retrieved April 19,2009
  15. ↑ 15.00 15.01 15.02 15.03 15.04 15.05 15.06 15.07 15.08 15.09 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 US Government Spending,"Rhode Island State and Local spending," retrieved April 15,2009
  16. ↑ Rhode Island Office of Auditor General Web site, retrieved November 10, 2009
  17. ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  18. ↑ Rhode Island Office of Accounts and Control Web site, retrieved November 10, 2009
  19. ↑ Rhode Island Office of Accounts and Control Web site, retrieved November 10, 2009
  20. ↑ State of Indiana, “State Credit Ratings-as of June 24, 2009"
  21. ↑ State of Rhode Island,"Frequently Asked Questions-Economic Recovery and Reinvestment," retrieved April 15,2009
  22. ↑ American Recovery and Reinvestment Act,"Impact," retrieved April 15,2009
  23. ↑ The Providence Journal,"In R.I., $3.4 million of the federal stimulus package for train stations," March 27,2009
  24. ↑ 24.0 24.1 Providence Journal,"Stimulus money for Rhode Island's public colleges at risk," March 24,2009
  25. ↑ Associated Press,"RI Veterans Centers Getting Stimulus Funds," March 28,2009
  26. ↑ Associated Press,"R.I. gets $17M to train unemployed workers, youth," March 30,2009
  27. ↑ Rhode Island State Treasurer, How much did this project cost?
  28. ↑ 28.0 28.1 Rhode Island.gov, Treasurer Caprio Debuts State's First Ever Online, Real-time Checkbook of State Spending, Feb. 9, 2009
  29. ↑ Rhode Island Treasurer, 2009 Budget
  30. ↑ RI.gov, "Department of Administration Launches Transparency Portal," 02/16/2009
  31. ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  32. ↑ Wall Street Journal,"Stimulus spending by state," April 9,2009
  33. ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
  34. ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
  35. ↑ Rhode Island, Watchdog.org, November 17, 2009
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