Editorial

Will budget spur ‘comeback’?

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Gov. Gina Raimondo was tested early in her tenure, as a major blizzard descended on the Ocean State in January. Staying visible and acting decisively, she generally received high marks for her handling of that situation.

Rhode Island remains in the midst of another storm – one of economic malaise and uncertainty. Even as the unemployment rate continues to drop, and as the state moves more fully out from under the cloud of recession, a deep level of anxiety about the future persists. Given the yawing, structural budget gaps facing state leaders in the coming years and the continued problems of wage stagnation, underemployment and middle class erosion, that feeling seems well founded.

The governor’s record on addressing Rhode Island’s economic woes, of course, has yet to be written. But she took a major first step last week, unveiling her $8.6 billion budget plan for the coming fiscal year.

The document includes a range of new proposals, addressing everything from education to economic development to health care. But above it all, the plan has been carefully branded a “JOBS budget.”

“If we rebuild this economy and create middle class jobs for Rhode Island families, everything is possible,” Raimondo states in a press release meant to outline the budget’s highlights. “And if we don’t, nothing else will matter. Our economic engine has run out of gas, and we have been in decline. Now is the time to spark our comeback.”

It is in the area of education that we find the most clearly heartening proposal, specifically, the inclusion of funding to implement full-day kindergarten across the state. Providing that access for children and families is a fundamental piece of strengthening our future. Plans to expand pre-K classrooms and establish a School Building Authority are also to be lauded.

On the economic development side, the measures outlined in the budget seek to streamline the regulatory process, eliminate “nuisance” taxes and make Rhode Island more competitive with its neighbors. It would also provide new Secretary of Commerce Stefan Pryor with significant funding for multiple initiatives, from the former I-195 land redevelopment to small business assistance.

There’s no silver bullet, but that is because none exists. To be successful, the project of realizing the “comeback” Raimondo speaks of will require long-term vision and commitment.

Two of the most significant pieces of the governor’s fiscal plan have drawn the most scrutiny thus far. Facing a roughly $190 million structural deficit for the coming year, the budget relies on a complicated refinancing of state debt to make many of its investments in new programs and initiatives. Critics have decried the tactic as a “gimmick” that will effectively cost taxpayers more, while the governor paints the move as a creative means to extend resources and foster growth that will pay off down the road. In any event, it’s certainly far from ideal.

The budget also relies on approximately $90 million in Medicaid spending cuts, $46 million of which have yet to be specified. That task will fall to a working group designed to “reinvent” the program.

Clearly, Medicaid needs to be addressed. The governor’s focus has been on reforms that ensure quality outcomes while controlling costs. We applaud the willingness to take the issue on but do question how effective the effort will be within the broader context of the budget process.

This issue – along with the future of HealthSource RI, the state’s Obamacare insurance exchange, which under the budget would be supported through a new fee on all health insurance premiums – may ultimately prove to be the most contentious in this budget cycle.

There are many other components of Raimondo’s budget plan. She seeks to increase the minimum wage and expand the earned-income tax credit. Additional savings factored into the equation need to be negotiated with state workers. A proposed statewide property tax on second homes valued more than $1 million has drawn much attention. House Speaker Nicholas Mattiello’s proposal to eliminate the tax on Social Security benefits for low- to moderate-income recipients is also included.

The governor has launched a website, http://openbudget.ri.gov, through which residents can explore the budget plan further. We’ll be staying tuned, and we urge our readers to do so as well. What’s decided in the coming months will go a long way toward determining how Raimondo’s handling of our economic challenges is viewed down the road – and, more importantly, will hopefully help ensure a brighter fiscal tomorrow.

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