on 04-03-2009 02:53

By JIM BARON

PROVIDENCE - With a debate that was earnest, but downright genteel compared with their colleagues in the House of Representatives, the Rhode Island Senate passed the supplemental budget for 2009 as amended by the House on a vote of 32-6 on Thursday.

The $7.3 billion tax and spending package now goes to Gov. Donald Carcieri for his signature or veto.
Carcieri expressed serious misgivings about the budget before it was changed by the House to restore $25 million in aid to cities and towns and to eliminate the 2 cent per gallon hike in the gasoline tax.
According to spokeswoman Amy Kempe, the governor is "carefully reviewing" the document. He will decide in the next few days whether to veto it or let it take effect by default.
The Constitution gives the governor six days (not counting Sunday) to veto the bill or it becomes law. That means he must act by April 9 to veto it if he so chooses.
However, the $1 per pack increase in the cigarette tax is scheduled to kick in April 10, and the budget depends on the additional revenue expected from that increase to be in balance.
The budget closes a $370 million deficit in the fiscal year that ends June 30, $233 million of which was caused by a drop in revenue as a result of the crippled national and state economy.
"The world has fundamentally changed since we left this building last June," when the current year's budget was approved, Finance Committee Chairman Daniel DaPonte told the senators. "We have a global economy that has gone on an uncontrollable downward spiral. Just last year alone, there was $50 trillion in market capitalization that vanished.
"One of the unfortunate realities of living in the global economy that we live in is that all of these terrible things have trickled down to the state of Rhode Island's finances."
DaPonte noted that one thing budgeters were able to accomplish was not tapping the state's Rainy Day Fund, against the possibility that revenues could tank even further between now and the end of June.
As his counterpart, House Finance Committee Chairman Steven Costantino, did the day before, DaPonte warned his colleagues that the worst is yet to come.
He said the budget is designed to "position the state for further economic and financial deterioration."
"We don't need a Rainy Day Fund," DaPonte said morosely, "we need a Typhoon Fund."
The Republican leader in the Senate, Dennis Algiere, seconded that emotion, sending a message to city and town governments that "the money you are going to get you should be thankful for, and if you don't need to spend it, don't. They may want to put it in the bank," because it is unlikely any more will come to them in the 2010 budget.
Woonsocket Sen. Marc Cote, a Democrat, cast one of the six votes against the budget.
"Our community hospital, Landmark Medical Center, is currently in court-supervised receivership and is working to forge an alliance that will preserve Landmark's important medical services program in our region," Cote explained. "Article 16 removes critical funding for hospitals that was promised last year as a result of a compromise.
"All community hospitals are suffering at this time and Landmark has no way of recouping the funding cut as proposed in this budget," Cote said, adding that "Landmark needs the currently scheduled reimbursement to remain viable during this critical period."
Sen. J. Michael Lenihan of East Greenwich recalled that during the banking crisis of 1991, the Sundlun administration adopted a rule of thumb for whether something could be cut from the budget: "If we cut this from the budget, is somebody going to die? If the answer was yes, you didn't reduce it; if the answer was no, it was on the table for consideration for cuts."
Lenihan said that given the woes of Landmark and several hospitals in the southern part of the state - Kent County, South County and Westerly hospitals - "what concerns me now is that if this continues and you need medical care south of Providence, you don't have any choice. You won't have that kind of resource and people will die."
Cote also found fault with the cigarette tax hike, saying Woonsocket and North Smithfield are border communities, so people can drive a short distance to Massachusetts to avoid the increase.
Raising the tax "will have a devastating impact on scores of small businesses in my district and hundreds of other businesses in border communities across the state," he said.
Cote also worried that a mandatory statewide transportation plan would create a monopoly "that will cost more in the long run." As noted in the Senate budget, that plan would require school districts to join in a single statewide bus contract if they don't own or operate their own buses.
Freshman Sen. Edward O'Neill of Lincoln, an independent, called for leaders to "incorporate more time into the (budget) process" to allow the rank and file to get a better handle on it. He warned that the next budget is going to be even more difficult.
"This is a playoff game, but the Super Bowl is the 2010 budget," O'Neill said.
Providence Sen. Harold Metts said "it bothers me when we have to cut money from the poor and we have to give money back to the rich with (cuts in) the capital gains tax and flat tax. It still troubles me to this day. In a surplus year, I could understand it, give the people back some of their money. But when you have to cut funds and cut poor people and then give money back to the rich ... it's very painful for me."
Kempe said Carcieri "still has concern about a number of articles; most notably, while the budget restored some local aid to communities, it fails to address the underlying issue of unfunded mandates. The cities and towns need to be given the tools to manage their budgets and control costs in the face of local aid cuts and the anticipated $55 million cut next year."
By not addressing pension reform, Kempe added, "the legislature is not taking up one of the most important issues facing the state and it needs to be done now."
She said the governor also objects to the legislature's decision to tax the first $2,400 of unemployment benefits, which are currently exempt from federal taxation, because it "directly hurts Rhode Islanders who are struggling and it flies in the face of one of the goals" of the federal stimulus law.