On a 66 to 7 vote, the Rhode Island House of Representatives passed a $9.55 billion budget for the fiscal year that begins July 1 and that spells out for the first time how the state will divide revenue from the introduction of sports betting at two locations.
The vote on the budget took place minutes ahead of a 10 p.m. deadline imposed by House Speaker Nicholas Mattiello, who said lawmakers would need to return to work Saturday morning if they didn’t finish the budget Friday night. The vote followed about three hours of discussion on the 17 articles making up the spending plan.
Under an agreement that was negotiated up until late in the week, the state will get 51 percent of sports betting revenue — projected to be $23.5 million in the new fiscal year. Sports betting operator IGT, the only company to bid for the business, will get 32 percent of the revenue. Twin River, which will host sports betting operations starting this fall at its locations in Lincoln and Tiverton, will get 17 percent. (Those two host communities will also each receive annual payments of $100,000.)
An amendment detailing the arrangement sailed through the House with no discussion after it was outlined by Majority Leader Joseph Shekarchi.
Speaking to reporters after the budget vote, Mattiello called the terms favorable for taxpayers.
“I think it’s a very good deal,” Mattiello said. “We’re in sports gaming earlier than a lot of other states, and we have a better percentage for the taxpayers than any state that’s doing it right now, which is my understanding. So that’s a pretty good starting point.”
Gov. Gina Raimondo included anticipated sports betting revenue in her January budget proposal — before the U.S. Supreme Court expanded the legalization of sports betting — and her proposal called for the state to get 61 percent of the revenue.
According to a one-page summary of the state’s new agreement distributed by Shekarchi, New Jersey gets 8.25 percent from sports betting revenue, and Delaware gets approximately 40 percent. Also, if IGT makes a more favorable revenue agreement with another state, “the company must match the terms of the agreement in Rhode Island.”
The legislature and governor’s office contend, based on a legal opinion offered by a lawyer earlier this year, that voter approval is not required to introduce sports betting. But Joseph Larisa, a lawyer and gambling expert, recently argued in a Providence Journal opinion piece that voter approval is required.
The seven votes against the budget were cast by GOP lawmakers Blake Filippi of Block Island, Anthony Giarrusso of East Greenwich, Robert Lancia of Cranston, Patricia Morgan of West Warwick, Brian Newberry of North Smithfield, Robert Quattrocchi of Scituate, and Sherry Roberts of West Greenwich.
Morgan, a GOP candidate for governor, launched a series of rhetorical attacks against elements of the spending plan. On the whole, she said, state spending has gone up too much and not enough has been done to reduce structural deficits.
“What happens to Rhode Island when the next recession comes and we’ve done nothing in this budget to change its structural deficiencies?” Morgan asked.
Asked about Morgan’s criticism, Mattiello said that human service needs rise at a higher rate than general inflation “and you have to take that into account …. I expect the budget to rise every year. To not expect it to rise every year, I think, is non-realistic, so the question is, what should it be? And you have to look at the items in the budget to determine whether the increase was appropriate.”
Democrats described the budget as a balanced effort that avoids broad-based tax increases, continues a phaseout of the car tax, invests in education and economic development, restores money for human service programs, and gives voters the choice in November of whether to spend $250 million on improving school buildings in the state.
Gov. Raimondo’s communications director, Mike Raia, said she “is pleased that the House budget puts Rhode Island a step closer to making a once-in-a-generation investment to fix our school buildings, protects investments in job training and economic development, and expands support for working families, Rhode Islanders with developmental disabilities and our foster families.”
In related news, the House Finance Committee plans Tuesday to hold a hearing on Mattiello’s proposal for a new PawSox stadium in Pawtucket. The triple-A team, which has conspicuosly not offered a view on the speaker’s plan, is expected to push for some changes to the plan.
The House budget removes money that had been included to expand the number of magistrates in the state, following a request from the two chief judges of Family and District court.
The spending plan also increased, with no discussion, the value of a tax credit for film and TV productions, from 25 percent to 30 percent of the cost. “Just trying to be competitive with other states,” Mattiello said. “There’s a lot of irons in the fire, nothing definite, we’re hoping to be competitive.”
With the General Assembly session expected to end next Friday, lawmakers paved the way for the instant introduction of bills by suspending legislative rules.
Republicans pressed efforts to create an office of inspector general and make broader changes to the state’s E911 program, but were easily outvoted by the majority Democrats in the House.
The Rhode Island Senate is expected to take up the spending plan in the coming week.
