FY 1997 Budget Address
Just three weeks ago I stood in this chamber and spoke to you about the great challenges we face as Rhode Islanders and the need for fundamental change in state government.
Of these challenges, there is none more pressing nor more critical than the State Budget.
As I stated then, and will state again:
"It is clear that we have a government we cannot afford."
We have been living beyond our means for years-- plugging holes at the end of the fiscal year-- and carrying a structural deficit into the next.
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The problem is that we do not have the revenues to support the level of government we now have.
Since 1991, there has been no substantial growth in state revenues.
For the next fiscal year, we will actually have $1.9 million less in general revenue than we have in the current fiscal year.
And the problem will become even more serious when cuts in federal programs inevitably are imposed.
"The patient has had a fever for years, and is now in critical condition."
In this budget, for the first time, we will tackle the long-standing structural deficit head on.
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I take no delight in this task-- I certainly wish there was revenue available to provide more funding for education, for health care, for roads, for economic development, and for tax relief.
Instead we have been forced to make a number of very hard choices.
The Budget I have presented to you does protect our most important priorities.
And we are protecting our priorities without raising broad-based taxes. For the second year, there is no expansion in the sales tax. And while we are proposing to move away from full dependence on the federal income tax, we are keeping state income taxes at the same level.
At the same time, we have reduced and will continue to reduce some business taxes, which will help to create new jobs and new revenues for tomorrow... which we all know is the key to our future.
I know there are many legislators who want to reduce taxes. Let me say that no one wants to reduce taxes more than I do. But given the magnitude of our current budget problems, it simply is not responsible to do so at this time. As our revenues grow, it will be one of my highest priorities.
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I am proposing to fund the General Revenue Sharing and PILOT programs at last year's level so that our cities and towns can continue to receive this important financial assistance.
I have kept total state aid to elementary and secondary education at the current level. The level of aid to some school districts has been adjusted for enrollment changes, but I have ensured that none of the poorer districts receive a cut from last year's level. State aid to education has increased substantially over the last three years.
My Budget also includes funds for the pilot phase of the Metropolitan School-- an innovative regional career school which has the promise of changing the way we educate our children to prepare them for the workforce.
I have also kept state aid to Higher Education at last year's level, and have proposed a $21.4 million bond issue to fund telecommunications improvements needed to bring our colleges and university fully into the information age.
I have also increased our commitment to our community health centers by increasing the transition payment under RIte Care.
I am maintaining our current level of funding to those on welfare, but I am shifting the emphasis to help the working poor. My welfare reform proposal redistributes funding to guarantee better health care, child care, and job assistance so that individuals can move into the workforce and begin to take responsibility for their lives.
I have also done my best to keep intact the most essential services we provide to the disabled, and to children at risk.
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We need to continue to devote resources to economic development. I am proposing a $50 million bond issue to fund improvements at Quonset Point and Davisville, including funds for the Third Rail project.
Even with this large bond issue, our capital budget will continue to reduce each year the amount of outstanding indebtedness in relation to personal income. In fact, since 1994, we have reduced the amount of state debt by $192 million. This will give us the ability to make crucial capital investments in the future.
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The most important element of this budget is the downsizing and restructuring of state government itself.
Since the first day I took office we have been keeping a very tight lid on hiring. There are presently 537 fewer positions in state government today than when I began my term last January.
But much more drastic reductions are needed.
The Fiscal Year 1997 budget recommends major restructuring in state government through consolidations, mergers of cabinet level departments, and streamlining of operations. I am proposing the consolidation of 23 separate agencies into 8 existing agencies and the elimination of three cabinet level positions. The budget also includes the permanent reduction of 1084 authorized full time positions through program reductions, consolidation, and workforce downsizing. Our experience in reducing positions over the last year certainly demonstrates our commitment to continue to cut the size of the workforce. And the proposed Budget reinforces the discipline to do the job.
These changes will permanently change the face of government and allow us to more efficiently deliver services to our citizens.
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The budget does not include a pay increase for state employees. Any increase negotiated with state employees must be offset by savings in moving from the current, costly employee health insurance package to a system that will allow employees to choose among health plans.
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While the Budget has devoured an enormous amount of my time and energy as Governor, I have no monopoly on the best solutions and I welcome alternatives from members of the General Assembly.
But it must be made clear that in the end we will all need to make very difficult choices and we must all agree that the bottom line must be in line with our means.
I know all of you appreciate the significance of this issue and, like me, want what is best for all Rhode Islanders.
The steps that I have outlined in this budget proposal are changes that are not easy to face and are not easy to make. However, these are steps that must be taken today, because if we do not make these changes now, there will be nothing to invest in our children or in our future.
By reestablishing fiscal stability and a favorable climate for economic development, the steps we take today will set the stage for a new level of coordination and direction within state government.
I urge you to continue to work with me to achieve the essential changes I have outlined to you today.