Time doesn’t stand still, but it looks like the State Senate will turn back the clock to the closing hours of the session on June 30 this Thursday and pass the House version of the $9.2 billion budget that has delayed the issuance of car tax bills and had mayors and town administrators questioning what their municipalities would receive in state aid.
Senate Majority Leader Michael McCaffrey doesn’t feel it was time wasted, although the state continued operating under the prior budget and municipal levels of anxiety were raised prior to first disbursement of state funding this week. The governor’s office said Monday that cities and towns would receive allocations based on the 2017 budget. Presumably, differences in state aid between the two budgets would be made up in future payments.
In a joint statement issued Monday afternoon, Speaker Nicholas A. Mattiello and President of the Senate Dominick J. Ruggerio announced they had reached an agreement that will allow the budget to move forward.
On Tuesday Governor Gina Raimondo said, "I am optimistic that at the end of this week the Senate will return and pass the budget. Send it to my desk Thursday night and I'll sign it immediately. So, at this point, let's wait and see. But I have every reason to believe that this week we will have a state budget."
House Majority Leader K. Joseph Shekarchi was likewise optimistic.
“It’s not a done deal yet,” he said, “but I remain reasonably confident.”
The budget ended up in limbo when the Senate passed an amendment to Mattiello’s legislation to phase out the municipal car tax, providing municipalities with payments for the lost tax revenues. The Senate wanted a “trigger” that would freeze the tax relief plan if the state couldn’t complete the program projected to annually cost $221 million when fully implemented.
The 11th hour amendment was a departure from what Mattiello said Ruggiero had agreed to. Rather than keep the House in session until the late night hours, as he had promised not to do, Mattiello adjourned the House.
McCaffrey said the Senate Finance Committee would meet Thursday before the session to hear “stand alone legislation” calling on the state revenue director to evaluate the sustainability of the tax phase-out in the third year of the program. At that point, McCaffrey estimated, the state would be paying $140 million to $150 million to cities and towns.
Assuming the committee recommends passage of the bill, it would come before the full Senate later that afternoon after presumably approving the House budget. The measure would then be sent to the House and considered when the House and the Senate reconvene on Sept. 19.
McCaffrey said he is pleased that the proposed legislation addresses the concerns of senators, noting that a previous effort to eliminate the car tax screeched to a halt when former Gov. Donald Carcieri withdrew aid to municipalities.
“We have been down this road before,” he said. “We may need to take steps to address it.”
“I’m pleased the speaker recognized the concerns of the feasibility of the car tax phase-out that I share with my colleagues in the out years. This compromise allows the budget process to move forward, and I appreciate the speaker’s willingness to work through our differences,” Ruggerio said in a statement.
“We also recognize the Senate’s concerns related to the car tax phase-out from a long-term perspective, and I think it makes sense for the director of revenue to commission an annual study on how this program and other programs are working in conjunction with projected revenue,” Mattiello said in the joint press release.
Raimondo doesn’t believe the impasse caused irreparable harm.
“It is a difficult budget,” she said. “I mean, the budget as passed requires my administration to find millions and millions of dollars in cuts. Undetermined cuts. So that will be very difficult and require difficult decisions. But I don't think that just the 30 days away will have any really negative long-term consequences.”
As the state continued to operate under the 2017 budget, McCaffrey said, “every city is going to be made whole; every school is going to be made whole.”
Asked if he thought the impasse could have been avoided, McCaffrey said, “had the speaker walked down the hall and spoken to the president it might not have happened.”
Meanwhile, many municipalities are waiting for the outcome of Thursday’s Senate vote before issuing car tax bills.
As for McCaffrey, he said, “After Thursday we’ll be able to have a summer.”
(With reports from Jacquelyn Moorehead)