The Rhode Island House of Representatives Friday evening passed a $13.9 billion budget that increases money for education and Medicaid providers while offering the first partial restoration of pension benefits suspended by the state in 2011.
The spending plan was approved on a 69-to-five vote, with four of the nine Republicans in the House in support.
The budget restores pension cost of living adjustments, or COLAs, for participants in the state plan who retired before 2012 and makes a series of other changes to partially increase pension benefits.
There are no broad-based tax increases in the budget, although it raises the cigarette tax 25 cents, to $4.50 a pack.
The debate on the spending plan took about three and a half hours and concluded by 6:30 p.m., a far cry from the common practice more than 10 years ago when the marathon discussion typically extended into the wee hours of the morning.
Lawmakers from both parties praised a number of elements in the spending plan, including how it contains about $34 million more in education aid than what Gov. Dan McKee proposed in January. With Providence getting almost $12 million of that, state Rep. David Morales (D-Providence) said the city should call back dozens of laid off teachers and social workers.
Another issue attracting bipartisan praise was a $163 million increase for some providers paid through Medicaid, the program for low-income individuals. Rep. Teresa Tanzi (D-South Kingstown) said reimbursement rates for primary care providers will be reviewed next year.
House GOP Leader Mike Chippendale (R-Foster) was among the Republicans voting for the budget, and he praised House Speaker Joe Shekarchi and members of his leadership team for being accessible and willing to listen to the GOP caucus.
But some lawmakers, particularly Rep. Patricia Morgan (R-West Warwick), who is running for the U.S. Senate, said the budget doesn’t do enough to foster a stronger economy in Rhode Island.
Rep. Enrique Sanchez (D-Providence) praised the plan for a $120 million ballot question in November to create more housing, but he said that’s a small amount in the context of an almost $14 billion budget.
Other ballot questions propose borrowing $87 million for a life sciences building at URI, $73 million for a cybersecurity institute at Rhode Island College, and $10 million to support arts organizations.
The budget now goes to the state Senate, which typically does not make significant changes.
The pension turnabout — after the General Assembly approved a pension overhaul spearheaded by then-General Treasurer Gina Raimondo in 2011 — is all the more striking since Speaker Shekarchi managed Raimondo’s 2010 campaign for treasurer.
“It doesn’t make my head spin,” Shekarchi said after the budget vote. “I just think it was time. I mean, I’ve been speaker for four years. I didn’t do it in the first three years because I didn’t think it was time. I didn’t think the system was healthy enough, I didn’t think it could really withstand it. I think this system can.”
Thirteen years ago, Raimondo changed the equation around what was once considered the third rail of Rhode Island politics by arguing that the level of funding in the pension plan posed a potential catastrophe for future retirees. Retirees and current employees howled, but the legislature went along with a plan to suspend COLAs amid other changes.
Over time, retirees and current workers gained more traction by making their case with state lawmakers, including Rep. Patricia Serpa (D-West Warwick). During the budget debate, she called the partial uptick in benefits a first step and said lawmakers will deliver more in the future.
Shekarchi, however, would only promise an open door and to listen to future arguments about pensions.
Asked about his process for finding the line between helping those hurt by pension cuts and blowing up the unfunded liability for the pension plan, Shekarchi said he thinks this budget strikes the right balance.
“You know, I still am getting a lot of criticism from a lot of people for doing this, for helping these people, but if you look at the budget, everything in the budget … is to help people. And these people needed help … The people that we helped in this budget in terms of COLA, these were people who retired and got out of the workforce with the expectation of having a COLA regularly.”
Shekarchi said he remains in talks with Citizens Bank about a proposed tax change that the bank wants to put Rhode Island on the same footing as Massachusetts. With the House expected to recess next Thursday, he said lawmakers could return to take up the issue later in the year.
