By Tessa Roy, WPRO News
Governor Gina Raimondo’s budget for the spending year that begins July 1 increases state spending to $9.9 billion from $9.6 billion in Fiscal Year 2019.
“No broad-based tax increases, that still preserves our investments in education, economic development and the economy,” said Raimondo Chief of Staff Brett Smiley as he outlined the basis for the FY 2020 spending plan.
As she promised in her State of the State address, Raimondo proposed new money for education; $10 million to launch universal pre-kindergarten and $5.3 million to begin expanding the “Rhode Island Promise” free tuition program to Rhode Island College.
Citing a “difficult budget year,” Raimondo proposed restructuring the car tax phaseout, meaning some people will see less relief this year. However, officials said this won’t affect the timeline of phasing out the tax by 2024.
The projected sale of marijuana, which has yet to be made legal, would yield $6.5 million in estimated revenue in the spending plan, which also anticipates $3 million in revenue if mobile sports betting is legalized.
The Raimondo administration is also expecting to make money from hikes in tobacco taxes and beach fees. Although beach fee increases are anticipated in the governor’s budget, it’s not yet clear how much they’ll go up as they are subject to a public hearing process through the Department of Environmental Management (DEM).
The governor proposes an estimated $15.6 million from a new “Medicaid employer assessment fee,” which would charge, “large, for-profit companies” with 300 or more employees “for each employee who is enrolled in Medicaid.” The fee would apply to full and part time workers, and employers would be charged 10% of employees’ wages, capped at $1,500 per employee per year.
Although revenue estimates have yet to be developed, the governor proposed allowing cities and towns the option to tax exempt properties belonging to non-profit colleges, universities and hospitals that are not used for their primary, tax-exempt mission. Officials said it could allow cities and towns to recoup about $150 million per year, with those properties used for hospital and educational purposes keeping their exempt status.
Among the departments proposed for reductions is the Department of Children, Youth and Families (DCYF), reeling this week after the death of a 9-year-old Warwick girl. However, Director Trista Piccola said DCYF could handle the nearly $5 million cut.
“We believe that the cuts that we’re facing are things that the department can absorb without sacrificing anything about health, or safety, or the quality of services that we’re delivering,” she said.
Among other new taxes proposed in the governor’s budget is a 7% sales tax on streaming services and digital downloads and taxing lobbyists. The budget is subject to General Assembly changes and approval.
