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June 15, 2018
Larry Berman at (401) 222-1408
House approves 2019 state budget bill
STATE HOUSE – The House has approved a $9.559-billion budget bill that restores proposed cuts to services for the state’s most vulnerable populations and continues the phase-out of the car tax without raising broad-based taxes.
The bill (2018-H 7200Aaa) passed the House on a 66-7 vote today and will now go to the Senate, which is expected to take it up next week.
“I’m proud of this budget. We worked very hard to live within our means and avoid increasing the burdens on taxpayers, while investing in jobs and education, and helping people on Medicaid, seniors and the developmentally disabled. It’s a realistic, responsible budget, and it maintains our commitment to phasing out the automobile excise tax, which I know is important to our state’s taxpayers,” said House Speaker Nicholas A. Mattiello (D-Dist. 15, Cranston), who last year proposed the initiative to eliminate the car tax over six years. The bill fully funds the second year of the phase-out.
Said House Finance Committee Chairman Marvin L. Abney (D-Dist. 73, Newport, Middletown), “The budget process is a long, careful and deliberate process where often, tough decisions must be made in the best interest of all Rhode Islanders. After many months of hearings and negotiation, I am proud of this budget and I am confident that it will serve Rhode Island well into the future.”
The bill was amended to reflect an agreement reached with IGT, the operator of the state’s electronic lottery systems which also won the contract for operating sports wagering in the state, following the United States Supreme Court decision to allow states to establish legalized sports betting. Under the agreement, the state is to retain 51 percent of sports betting revenue, with IGT receiving 32 percent and Twin River, which would host the operation at its existing Lincoln facility and its Tiverton facility slated to open later this year, would get 17 percent. Host communities Lincoln and Tiverton would each get annual payments of $100,000 each. Sports gambling is expected to begin Oct. 1 at the state’s casinos.
The other two states that have set formulas for sports wagering so far have significantly lower state shares — in New Jersey, the state is to get 8.25 percent, and Deleware is to get 40 percent.
Despite some tweaks to the proposal, lawmakers still expect sports waging to bring in $23.5 million in 2019, as the governor estimated when she included sports wagering in her budget proposal.
The budget includes a bond question for November’s ballot asking voters to approve $250 million in construction to replace the state’s crumbling public schools, although the House added a requirement that communities commit to funding regular maintenance of new schools.
The bill would allow children in foster care to continue receiving state services until age 21. The program will allow young people who are in the care of the Department of Children, Youth and Families on their 18th birthdays to elect to remain in DCYF care until they turn 21. It also includes increases to foster care rates.
The House eliminated several cuts to social services proposed by Gov. Gina Raimondo in January. It restored the $18 million proposed cut to programs that serve the intellectually or developmentally disabled, and eliminated $9.9 million in new copays for Medicaid enrollees for services like prescriptions and non-emergency use of emergency departments. It also restored a $15.7 million cut to Medicaid disproportionate care, which reimburses hospitals that provide greater amounts of uncompensated care to low-income patients.
The House amended the bill today to reflect a settlement reached this week over reimbursement rates to nursing homes. With the settlement, there is a 1.5-percent base adjustment effective July 1, 2018, and a 1-percent increase (COLA) that will begin Oct. 1. This means the nursing homes will be receiving a total of 2.5 percent above the current rates by Oct. 1. The House removed an 8.5-percent rate reduction that was contained in the budget passed by the House Finance Committee last week. This translates to approximately $9 million in additional funding, half of which comes from the state’s General Fund, the other half from a federal match.
Out of concern for the effect on small businesses, the House did not agree with the governor’s proposed 25-cent increase in the cigarette tax, nor the proposal to increase taxes on electronic cigarettes and vaping products.
The House added resources for the successful Real Jobs Rhode Island training program, funding it at $11 million. Although the House did not fund new programs within the Commerce Corporation, it extended several business incentive programs that were expiring and continued to fund them, including the Rebuild Rhode Island construction tax credit and the Wavemaker Fellowship program.
The House did not include the governor’s proposal to increase the number of medical marijuana dispensaries from the current three to 15, but did increase licensing fees to the state’s three compassion centers from $5,000 to $250,000. The governor’s proposal to allow Connecticut and Massachusetts medical marijuana patients to purchase marijuana from Rhode Island compassion centers is included in the amended budget.
The House added an additional $1 million to the E-911 fund for the purpose of hiring additional staff and creating a plan to help municipalities prepare for 911 systems of the future, and added a new provision to address the practice of transferring surplus funds generated for the E-911 surcharge on telecommunications, limiting spending of that money to public safety programs. The House also eliminated most similar transfers from dedicated accounts to the general fund.
The bill includes the governor’s proposals to apply the sales tax to armored car services and “software as a service” products, expected to generate $9.7 million and $4.4 million, respectively, in new revenue.
The House included $976.2 million in state aid to education, an increase of $21.8 million over the current year and $9.5 million over the governor’s proposal. It also included the governor’s proposal to provide $6 million more for Rhode Island Promise, which provides Rhode Islanders two free years at the Community College of Rhode Island.
The budget includes a program that was in the governor’s proposal to commit $400,000 to establishing a community senior services grant program for senior centers and programs.
To help address the opioid crisis, the House concurred with the governor’s proposal to spend $650,000 for behavioral healthcare link, a statewide resource to provide 24-hour community-based assessment and treatment for those experiencing a behavioral health care crisis.
Besides the public school building referendum, the House also kept the other two ballot questions included by the governor. Question 2 will seek $70 million for improvements to buildings at the University of Rhode Island Narragansett Bay Campus and Horace Mann Hall at Rhode Island College. Question 3 would ask voters to approve $47.3 million in borrowing for a variety of environmental, open space and recreation initiatives, $1.1 million less than the governor proposed.
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