RIPEC gives mixed review to Almond’s 2000 budget

In a detailed analysis of Gov. Lincoln Almond’s fiscal year 2000 budget proposal, the Rhode Island Public Expenditure Council strongly suggests the state take advantage of the financial climate and prepare now for tomorrow.

While RIPEC’s 50-page analysis suggests the state is moving in the right direction in its economic initiatives, Gary Sasse, RIPEC’s executive director says the state is not investing enough in education. Additionally he says that the state has reversed a trend of reducing full-time positions that had effectively reduced state payroll for much of this decade, and over the last two years has begun adding poitions.

RIPEC is suggesting the state establish three priorities in its fiscal year 2000 budget:

Better position the state by continuing to implementing tax and debt reduction programs;

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Adequately and equitably fund public schools while ensuring the efficient use of existing resources;

Avoid committing taxpayer funds to new programs the state may not be able to afford in the future.

Sasse praised what appears to be a concerted effort by the state to reduce debt and curb taxes. But he points out that such efforts must be made for the long-term.

”The state is moving in the right direction,” said Sasse. “We hope it stays the course. Too often, in the past, the state has gotten off the path.”

The state appears to have gotten off the path, for example, when it comes to reducing the number of people on the state payroll, he said.

According to RIPEC, from fiscal year 1992 through fiscal year 1998, total state government staffing levels declined by 1,919 positions, representing a 10.8 percent decrease. But the governor’s fiscal year 1999 revised budget request called for an additional 98 full-time positions. And the governor’s fiscal year 2000 budget proposal includes 16,158.4 full-time positions, representing a 74.9 position increase from his 1999 revised budget.

Until 1998, said Sasse, the state had been doing a good job in reducing the number of full-time employees. But it is disturbing, he said, that over the last two years that trend has been reversed. RIPEC has a suggestion for getting the state back on track.

”Our recommendation is to freeze it,” he said. “We have to take steps to reduce overhead.”

Gov. Lincoln Almond
But Lisa Pelosi, director of communications for Gov. Lincoln Almond, defended the rise in full-time employees. First, she said, personnel numbers are at times misleading because the state is required to count vacancies as full-time employees. She added that the increase is also partly due to federal regulations that have called for an increase in workers at social service agencies, such as the Department of Children, Youth and Families. Other workers have been added at the state prison, she said.

“I believe that in those areas where the governor has proposed increases, the General Assembly has agreed that they are necessary.”

In terms of overall funding for education, RIPEC believes the state is simply falling short.

”We think the budget is inadequate and needs to be revisited,” said Sasse. “The bottom line is that we have to position the state to be competitive.”

Rep. Melvoid Benson, a North Kingstown Democrat and retired school teacher, praised the RIPEC analysis. She calls the proposed budget a very good one, except in the critical area of education. Communities like North Kingstown, she said, are simply up to their limit in taxes. And failing to adequately support local schools is a formula for long-term failure, said Benson.

”If we expect to raise the education level of all people in Rhode Island, North Kingstown has to get its share,” said Benson. “We have schools in North Kingstown that do not have librarians in school every day. Libraries are the key to getting the kids interested in reading and that is the foundation of education.”

Rep. Leona Kelley, a South Kingstown Republican and also a retired teacher, said the need for more money for education seems to grow each year.

”I know I’m starting to hear from constituents down this way,” said Kelley.

Pelosi suggests education funding – in aid to cities and towns – could be increased in the coming weeks. The governor is mandated by law, she said, to submit his budget in February and therefore cannot wait for May revenue collections. In recent years, because the May revenues have been strong, the governor has added funding to cities and towns. This year should be no exception, she said.

”We are hoping that the numbers will again come in strong and that will enable the governor to increase the aid to communities,” said Pelosi.

The RIPEC report gives high marks to all efforts on the part of the state to prepay its debt. Among its comments;

Debt Reduction Program: The FY 2000 – FY 2004 Capital Program continues to reduce reliance on debt financing and lower the state’s debt obligations. RIPEC supports efforts to prepay debt, such as the anticipated prepayment of $186.7 million in state debt over the next five years. The Administration continues to expand the pay-as-you-go asset protection program with $21.9 million allocated to preserve the state’s public infrastructure investments. In addition, as mandated by current law, the governor’s fiscal year 2000 budget dedicates an additional one cent of the 28 cent gas tax to support transportation programs. Because of these and other debt reduction initiatives, net tax supported debt as a percent of personal income is projected to decline from 8.5 percent in fiscal year 1994 to 4 percent in fiscal year 2004.

Tax Reduction Program: Rhode Island’s overall tax structure continues to be a critical issue, impact government’s ability to deliver effective programs and keep the state economically competitive. Rhode Island’s property tax burden is nearly 50 percent higher than the national average, and Rhode Island has one of the highest marginal income tax rates in the country. The governor’s fiscal year 2000 budget continues to fund a series of tax reduction and replacement programs initiated over the past couple of years.

For example, the governor has included an additional $22.7 million to finance the second year of a seven-year program to eliminate the motor vehicle excise tax. In addition, the governor’s fiscal year 2000 budget includes $11.4 million to finance the second year of a 10-year program to eliminate business inventory taxes.

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