House Finance Committee approves 2019 state budget bill
STATE HOUSE – The House Finance Committee has approved a $9.559-billion budget bill that restores proposed cuts to services for the state’s most vulnerable populations and continues the phase-out of the car tax without raising broad-based taxes.
The bill (2018-H 7200A) passed the committee on a 15-3 vote tonight and will go to a vote of the full House of Representatives on Friday, June 15, after which it will be sent to the Senate.
“I’m proud of this budget. We worked very hard to live within our means and avoid increasing the burdens on taxpayers, while investing in jobs and education, and helping people on Medicaid, seniors and the developmentally disabled. It’s a realistic, responsible budget, and it maintains our commitment to phasing out the automobile excise tax, which I know is important to our state’s taxpayers,” said House Speaker Nicholas A. Mattiello (D-Dist. 15, Cranston), who last year proposed the initiative to eliminate the car tax over six years. The bill fully funds the second year of the phase-out.
Said House Finance Committee Chairman Marvin L. Abney (D-Dist. 73, Newport, Middletown), “The budget process is a long, careful and deliberate process where often, tough decisions must be made in the best interest of all Rhode Islanders. After many months of hearings and negotiation, I am proud of this budget and I am confident that it will serve Rhode Island well into the future.”
The budget includes $54.7 million to fund the second year of the automobile excise tax phaseout in 2019. That funding replaces lost excise tax revenue for cities and towns, since the excise tax is levied by municipalities, not the state.
Under a plan proposed by Speaker Mattiello last year and included in the 2018 state budget, in 2018, the state began reducing the percent of retail value that can be taxed from 100 to 95 percent, the minimum exemption that must be applied to all cars went from $500 to $1,000, and all cars older than 15 years became exempt.
Under this bill, in 2019 the minimum exemption will be raised from $1,000 to $2,000, the assessed value will drop from 95 percent to 90 percent, and municipalities’ tax rate cap will be reduced from $60 per $1,000 of assessed value to $50 per $1,000.
The assessed value percentage and rate cap will continue to drop, and the minimum exemption will continue to rise until the tax is wiped out entirely in 2024.
The budget includes a bond question for November’s ballot asking voters to approve $250 million in construction to replace the state’s crumbling public schools, although the committee added a requirement that communities commit to funding regular maintenance of new schools.
The governor’s proposal to allow children in foster care to continue receiving state services until age 21 was included in the committee’s amended budget. The program will allow young people who are in the care of the Department of Children, Youth and Families on their 18th birthdays to elect to remain in DCYF care until they turn 21.
The committee also concurred with the governor’s increases to foster care rates.
The committee eliminated several cuts to social services proposed by Gov. Gina Raimondo in January. The committee restored the $18 million proposed cut to programs that serve the intellectually or developmentally disabled, and eliminated $9.9 million in new copays for Medicaid enrollees for services like prescriptions and non-emergency use of emergency departments. It also restored a $15.7 million cut to Medicaid disproportionate care, which reimburses hospitals that provide greater amounts of uncompensated care to low-income patients.
The bill clarifies the state’s reimbursement rates to nursing homes, leaving the funding as originally proposed in the governor’s budget.
Out of concern for the effect on small businesses, the committee did not agree with the governor’s proposed 25-cent increase in the cigarette tax, nor the proposal to increase taxes on electronic cigarettes and vaping products.
The committee added resources for the successful Real Jobs Rhode Island training program, funding it at $11 million. Although the committee did not fund new programs within the Commerce Corporation, it extended several business incentive programs that were expiring and continued to fund them, including the Rebuild Rhode Island construction tax credit and the Wavemaker Fellowship program.
The committee did not concur with the governor on her proposal to increase the number of medical marijuana dispensaries from the current three to 15. The committee did increase licensing fees to the state’s three compassion centers from $5,000 to $250,000. The governor’s proposal to allow Connecticut and Massachusetts medical marijuana patients to purchase marijuana from Rhode Island compassion centers is included in the amended budget.
The committee included the governor’s assumption of $23.5 million to be generated through the implementation of sports betting at Rhode Island casinos. This was possible due to the recent decision by the United States Supreme Court to allow states to establish legalized sports betting. The committee expects sports gambling to begin Oct. 1 at the state’s casinos.
The committee added an additional $1 million to the E-911 fund for the purpose of hiring additional staff and creating a plan to help municipalities prepare for 911 systems of the future, and added a new provision to address the practice of transferring surplus funds generated for the E-911 surcharge on telecommunications, limiting spending of that money to public safety programs. The committee also eliminated most similar transfers from dedicated accounts to the general fund.
The bills includes the governor’s proposals to apply the sales tax to armored car services and “software as a service” products, expected to generate $9.7 million and $4.4 million, respectively, in new revenue.
The committee included $976.2 million in state aid to education, an increase of $21.8 million over the current year and $9.5 million over the governor’s proposal. It also included the governor’s proposal to provide $6 million more for Rhode Island Promise, which provides Rhode Islanders two free years at the Community College of Rhode Island.
The budget includes a proposal that was in the governor’s proposal to commit $400,000 to establishing a community senior services grant program for senior centers and programs.
To help address the opioid crisis, the committee concurred with the governor’s proposal to spend $650,000 for behavioral healthcare link, a statewide resource to provide 24-hour community-based assessment and treatment for those experiencing a behavioral health care crisis.
Besides the public school building referendum, the committee also kept the other two ballot questions included by the governor. Question 2 will seek $70 million for improvements to buildings at the University of Rhode Island Narragansett Bay Campus and Horace Mann Hall at Rhode Island College. Question 3 would ask voters to approve $47.3 million in borrowing for a variety of environmental, open space and recreation initiatives, $1.1 million less than the governor proposed.
For more information, contact:
Larry Berman, Communications Director for the Office of the Speaker
State House Room 331A
Providence, RI 02903