A sharp debate on fallout from Rhode Island’s 2011 pension overhaul punctuated an otherwise placid and uncharacteristically fast budget debate, as the House of Representatives on Friday evening approved a $14 billion spending plan for 2023-24.
The budget won approval in under three hours, on a 68-to-4 vote, with four GOP lawmakers, Reps. Patricia Morgan of West Warwick, Robert Quattrocchi of Scituate, George Nardone of Coventry and Brian Rea of Smithfield, voting in opposition.
It was just the second time in recent memory that the House had passed a budget before sundown.
“Members were generally happy with the budget, and we had few amendments on it,” Shekarchi said in an interview after the vote. “I’ve had an extremely open line of communication with all parties who were interested, so I’ve been working very hard particularly after the last three, four weeks to listen membership and what they wanted, and making sure they understood why I had to say no a lot of issues, but I wanted them to know that everyone of their ideas and their requests were all fully considered.”
In a contrast from past budget debates, when Republicans have cited a lengthy list of concerns, House GOP Leader Mike Chippendale of Foster praised the budget and Shekarchi’s management of the budget process.
“The Fiscal Year 2024 budget process in the House was different than previous years for the House Minority Caucus,” Chippendale said. “When the governor released his budget in February, leadership in the House Minority worked collaboratively with leadership in the Majority to craft a better budget for Rhode Island citizens and small businesses.”
The $14 billion budget, boosted by a roughly $540 million surplus and federal aid, is the largest in state history. It expands education aid, creates a new cybersecurity center at Rhode Island College, includes more money meant to increase affordable housing, and raises a tangible property tax exemption for businesses.
But as Chippendale noted, the end of a windfall of federal COVID aid and shakier economic conditions will spell a more challenging budget climate in the future.
“Next year will present formidable budgetary challenges for Rhode Island, where we must maintain a keen focus on lowering the total budget costs going forward, as the one-time federal funds will no longer be available,” he said. “House Republicans are dedicated to building upon the good government reforms we championed this year and commit to continuing our fight for fiscal sustainability for the benefit of all our citizens, businesses and communities.
This time around, most of the 13 budget articles passed with little or no debate.
But the ghost of the 2011 pension overhaul spearheaded by then-General Treasurer Gina Raimondo, now U.S. Commerce secretary, still circulates at the Capitol.
Raimondo convinced lawmakers at the time that the overhaul was necessary to preserve the health of the pension fund for state retirees. Annual 3% compounded cost of living adjustments were eliminated until the pension plan is 80% funded, a goal that is still years away.
Rep. Charlene Lima (D-Cranston), who has moved in and out of leadership for years, was withering in her criticism of how the overhaul has affected state retirees. She said a smaller COLA, and plans in the budget to pay a quarter of it annually instead of every four years, amounts to peanuts in a $14 billion state budget.
“Bonded Vault was considered Rhode Island’s biggest heist, and I’ll tell you today, it was not,’ Lima said, referring to an infamous 1975 robbery of a place where mobsters stored their valuables. “The biggest robbery in Rhode Island history was Treasurer Raimondo’s pension vault robbery. That’s what happened here.”
Lima made two amendments meant to offer retirees a one-time $1,500 cost of living adjustment payment. Her comments sparked applause from some spectators in the gallery and a few other lawmakers joined in criticizing the impact of the 2011 pension overhaul that helped elevate Raimondo’s national profile.
But Rep. Jay Edwards (D-Tiverton), Shekarchi’s floor manager, led votes to table each of Lima’s amendments, meaning that representatives did not vote on the amendment. She called the move cowardly and an attempt to hide where people stand.
Asked later about Lima’s characterization of the pension overhaul, Shekarchi — who managed Raimondo’s 2010 run for general treasurer — said he sympathized with those affected, but said he was not a state rep at the time.
“I wasn’t here to listen to any of the testimony,” Shekarchi said. But 12 years later, “it is time to look at what we’ve done,” and to assess the impact against current standards. “I think it’s prudent to have a professional review by real actuarials and come back with the treasurer, give us recommendations.”
The budget includes a requirement for a commission to assess the 2011 pension overhaul and report back by March 1.
The budget is slated to go to the Senate Finance Committee on Tuesday.
The House of Representatives typically passes hundreds of bills in the week after the budget vote, and the chamber is slated to hold a rare Monday meeting as the chamber presses to conclude its session by the end of next week.
Ian Donnis can be reached at idonnis@ripr.org
