Header, the Administration of the Honorable Lincoln C. Almond
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June 25, 1998


I am transmitting to the Secretary of State, with my signature, 98-H-8478, Substitute A, As Amended, "An Act Making Appropriations for the Support of the State for the Fiscal Year Ending June. 30,1999."

This Act represents the State's spending plan for next year at a time of a growing economy, with rising revenues and a historic surplus. We are at this juncture because of the targeted investments and fiscally prudent decisions we have made over the last four years.

I support many of the important initiatives contained in this FY99 Budget, which largely reflects my original budget submission. The Act contains sweeping property tax relief to be phased in over the next several years. I began the debate for property tax relief several months ago because Rhode Islanders deserve tax relief- I support the phase-out of the inventory tax, which will help make Rhode Island retail businesses more competitive, and the expansion of the real estate circuit breaker, which will increase tax credits for needy homeowners and renters. I also support the phase-out of the automobile excise tax; however, I am concerned that the cost of the auto tax plan in future years could constrain the State's ability to fund education and other basic State services, and I will be closely monitoring the consequences of the plan together with the General Assembly.

I also support many of the debt reduction activities included in the FY99 Budget. As Chairman of DEPCO, we have reduced DEPCO debt by more than $300 million and projections are that Rhode Island's per capita debt is will be reduced significantly by the year 2003. Furthermore, the "pay-as-you-go" asset protection program, instituted in last year's budget and increased for next year, continues to reduce the State's reliance on debt.

The FY99 Budget includes substantial increases in education aid to cities and towns and in operating funds for Higher Education, consistent with my request- The Budget also includes my request for a $21 million bond referendum for higher education facilities at the three State institutions. I am particularly pleased that the General Assembly has included $1 million to begin design of a new athletic facility and convocation center at the University of Rhode Island, with the commitment of additional operating funds for design and to match private donations. This new arena, along with the numerous other capital improvements underway and proposed, will greatly improve the prestige and standing of our State university.

The Budget incorporates my Starting Right early childhood initiative, which will dramatically expand the accessibility and quality of child care in Rhode Island. This initiative will make Rhode Island a national leader in providing quality early childhood programs to its citizens. However, I am most disappointed that the Assembly refused to approve my request for $1 million in additional funding for this important program.

The Budget also makes important investments in transportation. Specifically, dedicated funds from the gas tax have been increased by two cents for RIPTA and by one and one-half cents for the Department of Transportation. I had requested, and the Assembly failed to approve, an additional one-half cent ($2.5 million) for DOT and an additional $10 million for a state-funded highway improvement program. In refusing to appropriate this transportation funding, the Assembly missed an important opportunity to improve our roads and bridges, and to reduce the need to add to our already heavy debt burden for transportation.

The General Assembly also should have adopted my initiative that would have asked voters this November to approve a new Center on Aging at the Howard Complex in Cranston. The cost of the Center is approximately S3.7 million and would have provided a new home for the Department of Elderly Affairs, as well as assist our senior community by providing important resources and information and link senior centers, elderly housing complexes, and community agencies. The Assembly also should have included $900,000 in funds I requested for elderly transportation.

For the foregoing reasons, I sign this appropriations bill into law.


Lincoln Almond