Chariho School Parents’ Forum

December 15, 2009

Coming to a town near you

Filed under: Budget,Hopkinton,State-wide — Editor @ 12:22 pm

RI Future posted a memo from the Governor’s office about the suplimental budget. Emphasis (bold) and notes (red) added :

OFFICE OF THE GOVERNORINTEROFFICE MEMORANDUM

TO: Andy Hodgkin, Beverly Najarian, John Robitaille, Gary Sasse, Rosemary Booth Gallogly, Mike Cronan, Fred Sneesby
   
FROM:  Amy Kempe

RE: FY 2010 Supplemental budget briefing schedule and message points

DATE:  December 14, 2009

General Message Points (working draft only)
o The state needs to find $225.1 million in six months.  o $125 million revenue shortfall
o $60.8 million carryover from FY 09
o $33.9 million agency expenditures, directed related to increased caseloads due to the stress on our social services

o By now, we are all aware of the fiscal crisis the State is facing.  For the past two years, revenues have continued to decline. Rhode Island is not alone, but we have felt the economic recession longer than other states.

o Rhode Island slid into this recession before the rest of the country.  As a nation, economists predict that state finances are not expected to recover for at least two years.

o Yet, despite being in this longer, we have managed our way through it without raising broad based taxes.  And, that must continue. 

o The state’s fiscal situation continues to generate difficult and often painful budget choices. There are no more easy solutions.  There are no good choices.  There is no more money to be handed out.

o The supplemental budget I am submitting today addresses three broad outcomes which is reflective of the continued slide of revenues

o First, it addresses the FY 09 closing deficit of $60.8 million through a series of one-time savings

o Second, it resets spending levels on the state side for the remainder of this fiscal year and for future years.

o And third, it gives the cities and towns the tools they need to mange their budgets and reset their spending levels.

o In total, we are reducing general revenue spending by $155. 2 million from the FY 2010 enacted budget.

o To address the FY 09 carryover deficit, I propose a number of land sales.  Specifically:

o The Veteran’s Auditorium, valued at $10.75 million, to the Rhode Island Convention Center Authority.  Under the proposal, the Convention Center Authority will issue a $25 million bond for the purchase and rehab of the Vets Auditorium

o The former site of the Training School in Cranston, valued at $6.2 million

o The current facility housing the estate’s centralized IT center, for $1.5 million, and

o Two acres situated within Roger Williams University, valued at $2.8 million
o I am shifting $5 million of the federal stabilization money from FY 2011 to this year.

o An additional $7.2 million in federal reimbursement for child support enforcement, from FY 2005 through today. The state will realize  savings from this program through federal reimbursement going forward.

o The supplemental shifts $22 million in repayment to the Rainy Day Fund to FY 2011. 

o There is an additional $6 million from our developmentally developed providers.  Under Medicaid, provider donations are allowed without a reduction in the FFP. If we were to resolve the deficit by reducing provider billing, it would require a reduction of $17 million all funds or a rate reduction of 20 percent, which would have a significant effect on services to individuals.

o Over the past several years, we have made considerable structural changes, reduced personnel expenses by XX percent, redefined eligibility standards for our social service programs, and trimmed states spending across the board.  Last year, the General assembly passed significant pension reform. 

o But, as I stated last year when I signed the budget, the pension reform did not go far enough.  We need to go back at it this year, specifically with regards to COLAs.

o Last year, I proposed sweeping pension reform that included ending COLAs.  I am again asking the General Assembly finally do away with COLAs.  There is no such thing as a COLA offered as part of a retirement plan in the private sector.  It is archaic idea, and one can no longer afford it.

o Under my propossal, which Rosemary can outline in greater detail, the state will eliminate the COLA for state employees, teachers, judges and state police for employees who were not eligible to retire on September 30, 2009.

o The article does continue COLA for those who are eligible to retire on or before September 30, 2009, and those who became eligible and retire through the passage of the legislation shall continue to receive a COLA

o Further, the article gives authority to the General Assembly to review annually and give an ad hoc COLA adjustment to retirees who are not otherwise eligible

o This will save a total of $43 million in this fiscal year, and reset our baseline for next and future years.

o The pension savings break down as follows:
§ $11.3 million from state employees
§ $507,950 from State Police
§ $240,190 from Judges
§ $18.5 million from teachers, with the savings passed on to the cities and towns § $12.3 million for the state’s share of teacher pensions

o We have made significant changes to our personnel budgets in the past few years with the changes to retiree healthcare and last year’s pension reform.  We continue to tackle personnel costs in this supplemental with the elimination of the pension COLA.  We have made significant changes to the social services budget. 

o Because of the economic recession, our social services are increasingly pressured.  To accommodate for that, we have continued to constrain spending throughout state government.  In this budget, we find an additional $19.6 million in agency reductions.

o Also, we anticipate seeing $8.7 million in employee medical benefit savings. This is a significant saving that result in the changes to employee cop-pays and our wellness program. We are making a healthier workforce that is making smart healthcare decisions.

o We cannot get through this economic recession without addressing how we fund our cities and towns.  I have said this over and over again, and we can no longer

o First, I am proposing withholding the 3rd and 4th quarter vehicle excise tax from the cities and towns, for a total of $65.1 million.

o I know that many of our cities and towns have also opened up their labor agreements and negotiated higher health insurance co shares and co pays, and delays of wage increases. I applaud those efforts. 

o But, all our cities and towns need to take that cue, and work with labor unions to bring them in line with the private sector, in terms of healthcare costs and a reduction in pay.

o I don’t expect our cities and towns to make up for the reduction in aid by renegotiating contracts alone.

o Last year, I proposed a series of budget articles that would give the cities and towns the tools they need to manage their budgets and cut expenditures.  The General Assembly did not pass these tools, despite cries from the municipalities and independent analysis that the packet of tools could save cities and towns $125 million per year.

o Specifically, statewide purchasing system, end to minimum manning, increased health insurance co-shares to be equal to that of the state plan, and a BRAC commission to study school district consolidation (eeek – i’m fearful of the last one).

o I urge the General Assembly to pass the municipal tools articles immediately upon returning to session. There is no need to debate them again this year. Pass them and free the cities and towns to manage their own budgets.

o Of the $41 million in reduction in education aid, $18.3 million is offset by the savings from the elimination of the pension COLA.  The reduction is further offset by the distribution of $4.6 million in Recovery Funds

o This leaves approximately $20.6 million, which mirrors the personnel reduction the state workers accepted this past year. 

o This past year, the state employees agreed to take essentially a three percent pay cut.  Many municipal employees have done so too.  Many municipal employees too have taken a pay cut.  I am very appreciative of the understanding by state and municipal employees that we do have good jobs, with good benefits and good working conditions. There are many Rhode Islanders who don’t.  And, a three percent pay cut is a small sacrifice for the greater good.

o The total personnel budget for schools last year was $XXX million.  Three percent of that total is $20.6 million. Do the math. $20.6 million is the exact amount I am proposing we reduce education aid.

o Personnel costs continues to be one of the biggest pieces of municipal budgets, and if we are to get through this economic recession, all employees – including teachers – need to be part of the conversation and solution.

o Over the past several months, my team and I have met with mayors and town managers to alert them of the proposed funding changes, and time and time again, the message they have shared is that they need relief, not only of the many unfunded mandates, but also help in controlling the spending on the school side. 

o Once again, I am submitting legislation to suspend the Caruolo Act in any year there is a reduction in state aid. (not sure it needs to be tagged to a year with a ‘reduction in state aid’)  The legislation gives the appropriating authority – the city and town councils – final approval for all school labor contracts.  This unifies the budgeting and taxing functions and ensures school committees are not over promising and thereby putting cities and towns in greater financial danger.

o There are a number of smaller budget items included in this supplemental, which Rosemary and her team can go over in greater detail with you after this.

o As I said earlier, our fiscal situation leaves us with only difficult choices.  We have for too long now not tackled the tough issues and given in too early to special interests. We can no longer afford to operate as business as usual.

o Later today, Rosemary and her budget team will present this corrective action plan to the House Committee on Finance. I strongly urge the Committee and the General Assembly to act quickly and pass these much needed changes.  If they do not, they will be setting this state, the taxpayers, and those who rely on government services on a much longer road to recovery than we can afford.

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21 Comments »

  1. Are we to be suprised by this? I am not an economist, business guru, or stellar investor, yet I have said for over a year, this was coming down the road. No, I’m not smarter than the “average Joe”, I just read the data without “agenda blinders” on and this fiscal crisis was easily predictable. So now our elected leaders have their “panties in a wad” over the loss of funds for their towns…..maybe those who squawk the loudest should just be called “elected”, because they are anything but a leader. Don’t fear, they have the solution at hand…raising our taxes, at least those of us who produce and therfore are taxed.

    When election time comes, remember the politicians who voted to pass the budget dumping this mess in your lap and onto your property tax bill.

    Comment by RS — December 17, 2009 @ 11:07 am | Reply

    • But will people remember next year? I fear that they won’t. The mantra seems to be that all the other reps and senators are at fault but not the one that represents me. Too many people with their heads in the sand.

      Comment by CharihoParent — December 17, 2009 @ 6:23 pm | Reply

  2. Hi!
    My immediate concern is the budget caps are in place locally by the state, mandates still in place, and contract obligations. Rhode Island STILL the only state in the nation without a dependable state aid formula for education.
    Like people NOT all cities and towns are the same. In addition regional school districts like Chariho local town councils effectively have no control of their budgets as regional school districts do not have to answer to the town councils for their school budgets.
    Per Rhode Island State Constitution these are the straight facts:
    1. All revenues bills must originate in the House of Representatives. Held since 1941 by the Democrats. Only six Representatives out of 75 are Republicans.
    2. The Rhode Island State Constitution directs the Rhode Island General Assembly to promote education.
    In closing, a number of people are responsible for the fiscal mess we are in but blame cannot shared equally.
    Regards,
    Scott

    Comment by Scott Bill Hirst — December 17, 2009 @ 5:44 pm | Reply

    • I don’t care which party they are from, they all have some share of the blame for the fiscal mess.

      For once a good point, SBH. Article XII, section 2 states the following:

      Perpetual school fund. — The money which now is or which may hereafter be appropriated by law for the establishment of a permanent fund for the support of public schools, shall be securely invested and remain a perpetual fund for that purpose.

      Where is this perpetual fund? Where has it been securely invested?

      Comment by CharihoParent — December 17, 2009 @ 6:29 pm | Reply

    • Here’s the link to Article XII

      http://www.rilin.state.ri.us/RiConstitution/C12.html

      Comment by CharihoParent — December 17, 2009 @ 6:31 pm | Reply

  3. SBH always plays the party politics like hes some bigshot republican. Wasnt it true the state GOP didnt vote for you for something and you got mad at them SBH?

    I got an idea. SBH needs a job. Why don’t you run against Kennedy? At least youll be doing something for your social handout

    Comment by always — December 17, 2009 @ 8:34 pm | Reply

  4. After Hopkinton succumbed to the Chariho propaganda and passed the bond I elected to concede to the futility of ever changing enough minds. Rhode Islanders are too stupid. Bureaucrats are too corrupt. Politicians are too self interested.

    As RS notes, the end result was inevitable, yet spend, spend, spend remained the constant mantra. Over staffed police department…$15,000 per year per student…bus monitors…teachers’ assistants…guidance counselors for middle schoolers… free psychological services for everyone…and on, and on.

    I’m not coming back to the fray, but I have to say one thing. Ha, Ha, Ha, Ha, Ha, Ha…I haven’t been this amused in some time. Enjoy the Taj Mahal, a.k.a. Chariho. Good luck paying the bills. You’re finally getting what you deserve…morons.

    Comment by Curious Resident — December 18, 2009 @ 2:08 am | Reply

  5. coming back to the fray???? HAH! now thats comedy. who exactly do you think you were/are? Youre a NOBODY who used to post on useless blogs. Youre a do nothing that never had solutions, just venemous attacks. Please, do the world a favor…..crawl back into the dumpster you just resurrected yourself from and stay there for good. Your opinions sucked then and they suck now. If you really gave a crap, you’d put your name on the line, run for office and try to make changes but you choose the easy way in life and that is to complain about everything and say “im not running because its a waste of time”. So in that case, take your misery and shove it.

    Comment by fray — December 18, 2009 @ 8:45 am | Reply

  6. Would the last person leaving RI please turn out the lights?

    Comment by Dorothy — December 18, 2009 @ 10:03 am | Reply

  7. Hi!
    1.I am an active Republican. Party politics is important for multiple reasons. In straight historical terms the last time we had a Republican Governor and both houses of the R.I. General Assembly in Republican hands was 1939 to 1941, way before I was born. The Democrats which have tremendous control of the Rhode Island General Assembly can EASILY pass anything over a Republican Governor’s veto.
    2. Bill Day, as I understand it will NOT file a complaint on the concerns he recently had. I do not think the press has picked this up yet and published it.
    Regards,
    Scott

    Comment by Scott Bill Hirst — December 18, 2009 @ 3:03 pm | Reply

  8. Happy Holidays to Bill and all of the posters on this board!

    Comment by george abbott — December 24, 2009 @ 4:53 pm | Reply

  9. Hi!
    I hope you had a nice holiday yesterday! Also Happy New Year for 2010 albeit a little premature!
    While I did not agree perhaps 100% with the The Providence Journal editorial http://www.projo.com , on Sheldon Whitehouse today, his “off the wall” tirade against those who oppose the healthcare bill and Republicans, which the paper did NOT mention physician and notable Democratic personality Howard Dean also opposes, hurts the Senator’s credibility. Both parties have interests they tend to favor. Check out http://www.opensecrets.org , you will find this interesting.
    There appears there might be a LEGAL problem with the healthcare bill passed in the United States Senate. This is because of laws requiring uniform treatment of the states. Special treatment for Nebraska in the United States Senate bill may violate federal law. Other states got goodies in this. It appears possible multiple state attorneys-general might litigate this special treatment. In Connecticut Richard Blumethal, their AG said in response to the Governor of that state it was premature. The South Carolina AG, apparently will be looking into it. It will be interestingly what our own AG Patrick Lynch does.
    I suspect The Norwich Bulletin http://www.norwichbulletin.com and The New London Day http://www.theday.com have covered this matter obviously, and I will check.
    Regards,
    Scott

    Comment by Scott Bill Hirst — December 26, 2009 @ 12:26 pm | Reply

  10. just watched lincoln chafee announce his run for governor. I swear, the only person thats a bigger boob than Scott Bill Hirst is Chafee.

    Comment by just watched — January 4, 2010 @ 6:20 pm | Reply

  11. saint billy felkner? mr. transparency train has disappeared???? please tell me he has NO plans to run again this year. talk about a useless, MIA councilor.

    Comment by where in the world is — January 25, 2010 @ 12:20 pm | Reply

  12. Just watched,
    This boob, me, suggests you consider attending the fundaiser for Tom Buck’s mother tomorrow evening, Tuesday January 26, and Saturday, January 30. It is for the Sandra White Fournier Transportation Fund. Both events $10 a piece. Tickets should be available at the door.
    The details:
    Tuesday, January 26, 4:00 P.M. to 7:00 P.M., Legends Bar & Grille, Spring Street, Hope Valley. Spaghetti & Meatballs
    Saturday, January 30, 5:30 P.M., to 7:00 P.M.,. Seventh Day Baptist Church Parish House, Church Street, Ashaway./ Roast Pork Dinner.
    Cheers!
    Scott

    Comment by Scott Bill Hirst — January 25, 2010 @ 12:21 pm | Reply

  13. yea, felkner and his minions have been quiet. guess simon and garfunkel apply here:

    Hello darkness, my old friend
    I’ve come to talk with you again
    Because a vision softly creeping
    Left its seeds while I was sleeping
    And the vision that was planted in my brain
    Still remains
    Within the sound of silence

    Comment by shhh — January 26, 2010 @ 10:43 am | Reply

  14. …and the Democractic controlled political machine in RI is still running the state into the ground and are the most fiscally irresponsible group in the US, on the state level…I’ll let you guess who is on the national level. I suggest we keep this quiet(Shhh) lest more businesses and taxpayers will flee from our fleecing state.

    SHHHH

    Comment by RS — January 26, 2010 @ 11:02 am | Reply

  15. Funny how Real Stooge (RS) ignores the point. Where’s your icon? Has he forgotten he’s been elected to the council?? Did he lose interest after his self ego stroking attempt at serving on both school committee and council fell thru?? How do you justify his rediculous attendance record?

    Comment by shhh — January 26, 2010 @ 1:41 pm | Reply

    • OK I’ll answer the 4 questions because you obviously need a platform.
      1. He’s not my icon.
      2. Don’t know, ask him.
      3. See 2.
      4. At the voting booth.

      Comment by RS — January 26, 2010 @ 2:29 pm | Reply

  16. True, it is very funny….. how those on watch have failed miserably(national,local and state) and you can only remark on the member with the least amount of tenure on the council.

    !!!!!!!BLINDER ALERT !!!!!!!!!!

    Comment by RS — January 26, 2010 @ 2:27 pm | Reply

  17. Hi!
    FYI: Conservative Political Action Conference http://www.cpac.org coming up next month.
    Regards,
    Scott

    Comment by Scott Bill Hirst — January 26, 2010 @ 3:21 pm | Reply


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