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Mon, 30 Mar 2009
Deep six the supplemental budget
The House rewrite of the Governor's supplemental budget could hardly be a worse document than the original budget, but it is just as bad. On balance, you have to say it's slightly more realistic in its assumptions, but it is crueler to the cities and towns. So take your pick: a bad budget, based on unrealistic assumptions (from the Governor) or a worse budget, based on realistic assumptions (from the House).
The budget ends general revenue sharing for the cities and towns. This is a pot of about $55 million that is shared with all the municipalities, and which they were all counting on in order to fill out this year's budget. This is cut to zero in the House version. Let's be clear about what's happening. Three-quarters of the way through the fiscal year, cities and towns are being told they have to suck it up and make up a whole year's worth of state aid. Providence will lose $15 million under this budget. For comparison, the police and fire departments are both about $43 million departments, and the rest of the municipal government is about the same. So they'll have to cut about 13% of their annual expenses in three months. In other words, if everyone took six weeks off and went home, they might make it. This doesn't consider the cuts to education aid, but there are some of those, too, despite the addition of federal stimulus money.
To pick a random suburban town, in North Kingstown the loss appears to be about 4-5% of the general municipal budget. So they'll only need to give everyone two and a half weeks off, or otherwise find a way to cut 20% of the budget for three months.
According to my understanding of the ARRA (stimulus) money, the House budget front-loads the money more than the Governor had. The Governor appeared to be saving some of the ARRA money for the next fiscal year, which is sort of counter to the spirit of the stimulus. On the other hand, the House budget scoops more of this money, giving less of it to the towns, so that's counter to the spirit of the stimulus, too.
A big part of the fiscal stimulus money was an increase in the Medicaid match, which means the federal government's split of medicaid costs would change from 52/48 to 55/45 or so. The legislature scooped that money, too, cutting Medicaid expenses and keeping the additional Medicaid money for the general revenue budget.
The good parts of the House changes are they scotched the idea of selling state buildings to RI Housing as a way to loot that agency, and they put off the Governor's weird pension savings, which weren't really supported. But they didn't reject the pension cuts. They just said we're not going to make any pension payments between April 2 and June 30, while we await more documentation. I'm sure that on June 30, they'll be happy to pony up.
And let's not forget that there is still a multi-million-dollar tax cut in this budget. The flat tax is still due to go down a half-percent this year, providing a huge break for a small number of lucky people. While the rest of us watch the state crumble, those folks will continue to fly first class.
There's much more; almost every page has a new outrage. This budget is a disgrace to the people who wrote it and an affront to anyone who cares about the future of our state, not to mention the future of whatever city or town you live in. I don't think what's wrong with it can be fixed by amendment, and I hope it goes down in flames. Sadly, I fear this is unlikely, because there are very few legislators with the courage to defy the leadership, but when the leadership has led you into a disaster, why do you still follow?
22:28 - 30 Mar 2009 [/y9/ma]
Sun, 29 Mar 2009
From O. Henry's Rural Sports, one of his tales of Jeff Peters, the con man:
"Farmers are not fair game to me as high up in our business as me and Andy was; but there was times when we found 'em useful, just as Wall Street does the Secretary of the Treasury now and then."
07:21 - 29 Mar 2009 [/y9/ma]
Sat, 21 Mar 2009
Have you wondered where the numbers come from when people say stuff like "tax cuts are less stimulative than food stamps"? Much of them come from estimates made by Moody's economy.com, and presented to Congress last summer (2008). Find them here.
09:43 - 21 Mar 2009 [/y9/ma]
Mon, 09 Mar 2009
Can be found at Closing Arguments, a new blog by Matt Jerzyk, the founder (though no longer the proprietor) of RI Future. He intends to make it more about the legal and intellectual background to the news. It's good stuff, go there and read it. Often.
22:30 - 09 Mar 2009 [/y9/ma]
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