Header, the Administration of the Honorable Lincoln C. Almond
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April 15, 1998


I hereby transmit today, without my signature, the Fiscal Year 1998 Supplemental Budget Act, House Bill 98-7267, Substitute A, As Amended, "An Act Making Revised Appropriations For The Support Of The State For The Fiscal Year Ending June 30, 1998."

While the Fiscal Year 1998 Supplemental Budget Act contains the majority of the items that I had requested when the Supplemental Budget was submitted on January 13, 1998,1 find it objectionable that the Supplemental Budget Act withdraws funding in several areas and fails to include certain expenditure items. Nonetheless, I will fulfill my constitutional responsibility as Governor to manage the budget within the appropriations enacted by the General Assembly.

From a funding perspective, the withdrawals made from my budget recommendations will adversely impact the services provided to the citizens of our State by several departments.

Within the Department of Administration, $625,000 in payroll costs were withdrawn. This loss of funding will adversely impact operations of the Division of Motor Vehicles. The withdrawal of $200,000 in funds for the Division's Customer Relations Unit will further delay addressing the concerns of the motoring public. The payroll withdrawals also will adversely impact the Department's computer operations, jeopardizing timely payments to clients and vendors that receive and provide services to our citizens and to Rhode Island businesses. In addition, the collection of tax receipts and the processing of tax refunds could be negatively impacted by this budget. Peak workloads of the Division of Taxation and the Division of Purchases occur at this time of year and their ability to meet current payroll and to fill vacant budgeted positions is now in question. The withdrawal of budgeted funds in the Division of Purchases will also delay the improvements made to the vendor information systems and citizen access to state contract information.

Within the Department of Mental Health, Retardation and Hospitals, updated projections on funding needs for staffing, overtime and operating expenses were not properly addressed by the General Assembly. The Department serves the state's most vulnerable populations such as the frail elderly and chronically ill treated at the Eleanor Slater Hospital.

Within the Department of Environmental Management, positions that I had requested to meet federal EPA mandates, as well as state mandates, were withdrawn. My Administration has been working to provide adequate resources for the Department's budget and staffing needs and has been negotiating with EPA to address their concerns. The withdrawal of these positions is problematic because of the risk that EPA may impose sanctions or withdraw funding as a result of this legislative action.

The General Assembly also withdrew $195,000 in asset protection funds for Higher Education that I had included in my Supplemental Budget.

The deletion of $174,000 in PILOT funding due the City of Cranston is objectionable given that this item represented a fair and equitable adjustment of Cranston's share of PILOT funds.

For the last three years, my Administration has funded structural shortfalls in the state budget left from the prior Administration. These included major audit adjustments in the Division of Taxation and in the Medicaid program as well as several labor arbitration cases. I have funded that shortfall at the expense of tax relief and additional education funding that I view to be high priorities. I had provided a financing mechanism to fund the latest round of audit adjustments. The Assembly, however, chose to spend down the surplus rather than use excess sales tax revenues. Despite this action, I will continue to push for property tax relief and additional education funding in the Fiscal 1999 budget.

I am compelled to lodge my objection to the process employed by the General Assembly in enacting the Fiscal Year 1998 Supplemental Budget Act. The Assembly refused to engage in meaningful discussions with my staff over spending requests and funding withdrawals. The Assembly refused to accept several pressing needs identified by the departments, but ironically did accept the budget savings my staff identified.

Furthermore, the General Assembly deviated from the all-inclusive budget presentation that had been followed since statutory changes were made two years ago. That statutory change mandated the Governor to submit a separate supplemental budget on the second Tuesday of January of each year. Last year and this year, my Budget Office prepared a comprehensive, all-inclusive budget document that detailed all changes from the enacted budget in the supplemental budget. This format had been viewed as extremely helpful for accountability and reporting purposes.

The Supplemental Budget Act passed by the General Assembly eliminated this all-inclusive format. The Act excludes items which were previously authorized pursuant to statutory provisions, including re-appropriations, full time equivalent positions (FTE's) and limits on federal and restricted funds authorized levels. We have a budget that my Administration will manage but a budget document that fails to provide the comprehensive detail that had been provided in the prior year and that I had proposed this year.

In conclusion, I recognize that objectionable portions of the Supplemental Budget Act can be addressed as part of the Fiscal Year 1999 Appropriations Act. My Administration stands ready to provide input to the General Assembly so that informed decisions can be made. It is my belief that the barriers to communications will inevitably lead to bad decisions. Let us hope that this process will not be repeated in the next cycle of budget discussions.

With the above concerns and explanation, I allow this bill to become law without my signature.


Lincoln Almond