Last Friday, Rhode Island’s House Finance Committee passed a $13.9 billion budget for the fiscal year starting July 1. Political reporter Ian Donnis talked with two state representatives, Brian Newberry, a Republican from North Smithfield, and David Morales, a Democrat from Providence.
This interview and transcript have been edited for length and clarity.
Ian Donnis: The House budget adds $271 million to what was proposed by Governor McKee in January. That’s a relative drop in the bucket, but the state budget has grown by almost 5 billion since before the pandemic. Rep. Newberry, is the state spending too much money?
Rep. Brian C. Newberry: Well, the obvious answer is yes, but then the question is why. I mean, I’ve been in office for 16 years, and the budget has increased year after year after year for a variety of reasons. This is not a congressional debate, right? So, We’ve been given a lot of money over the last several years by Congress. Now, what I think of that is a different question, but as state legislators, we have to deal with the money we’re given and it would be foolish not to use it. The question is, how are we using it? Are we using it properly? But obviously in a state with a million people, a budget like this is way too high. But you also, people don’t understand you can’t just cut a budget like this dramatically You can’t cut it in half. It doesn’t work that way. Most of our expenditures are long term expenditures and are locked in. So if you want to reduce overall spending you need to do it the same way. It’s been ramped up over time. So the answer short answer is yes. Compared to last year’s? No.
Donnis: What do you say to the same question, Rep. Morales?
Rep. David Morales: I would say that this budget and previous budgets over time that have seen an increase in spending reflect the ongoing need that we’re seeing across our communities. And the need directly relates to a lack of affordable housing, the fact that our Medicaid rates are abysmal, especially in comparison to our neighboring states. And what happens as a result of that, is people are not receiving the essential services and resources that they should be able to, whether it’s to be able to make ends meet or support their families. So I think these budgets, with an increase in spending, are reflective of the needs of our communities.
Donnis: House Speaker Jose Shekarchi put the brakes on a request from Citizens Bank to change the tax code in a way that the bank says would put Rhode Island on an equal footing with Massachusetts. The Speaker says he’s going to try and work on this issue going forward. Was this the right move, Representative Morales?
Morales: Absolutely. Let’s be clear. We received an 11th hour budget request that came directly from Citizens Bank, but would impact virtually almost all financial institutions in the state and would reduce their tax burden significantly. And what was most concerning is that we, within the finance committee, within the rank and file legislators, did not have a clear understanding as to what the fiscal impact would be. And while I understand Citizens Bank is referencing Massachusetts and reforms that they’ve made to their tax code, we also haven’t seen what the result of that is, because that tax code change is not taking effect up until 2025. So it still remains unclear as to how Massachusetts is going to respond to that. So I think it was a responsible decision to hold off.
Donnis: The right move, Rep. Newberry?
Newberry: I think this is a classic case of you have to separate out the policy from the politics. The policy, I think I agree with Rep. Morales, the policy we’re still looking at, it’s still evolving. I mean, I understand, I’ve heard the pitch from Citizens. I understand what they’re saying, and it makes some logical sense to me. Citizens committed political malpractice here. Going in at the last hour and saying we’d like you to basically pass a tax cut for banks. I don’t care who you are, what party you’re a part of, whatever, that’s not an easy sell to people, even if it’s the right policy. And I think it’s a residue, frankly, and I told the Citizens people this directly, it’s a residue of the habit in this state of some of the big institutions, I’m not trying to pick on Citizens, they’re exhibit A in this instance, but this could apply to any number of large companies, of believing that, you know, they can just go straight to whoever the governor is, or whoever sits in the third floor, I mean the Speaker, the Senate President, and get what they want done if they want something. That’s not the way it works anymore.
Donnis: The budget includes new money for cost of living adjustments for teachers and public employees who were upset by the pension overhaul back in 2011. General Treasurer James Diossa has warned that this could adversely affect the economy. The bond rating for the pension fund. How do you each balance those two concerns? Let’s start with Rep. Newberry.
Newberry: So I was here for the pension reform. I was one of maybe, I don’t know, maybe 14, 15 of us that were here who had to cast a vote on that. I voted for it. I don’t regret the vote for it. I think it was the right thing to do. It was also the toughest political vote I’ve ever had to make because you were hurting people when you did it. I think it was necessary. It was a necessary evil. It’s been 13 years, I think people who have been without a COLA for that long deserve some type of relief I’ve said that privately I haven’t made a big issue publicly, but I think this is probably a good compromise and I hear what the current general treasurer is saying I don’t really doubt that he’s wrong. I think it’s a step in the right direction
Donnis: How about you, Rep. Morales?
Morales: I’m, pleased that we are finally taking action after over a decade to be able to suspend and repeal the suspension of these COLA benefits especially to our retirees on fixed incomes because we have definitely heard the impact the economic impact specifically that this has had on hundreds and thousands of retirees across the state and they had an advocacy campaign over the recent years and it wasn’t up until this year following a study commission essentially that we were able to come to this compromise and agreement. At the same time I would also look at the concerns from the general treasurer’s office and ask for a more robust analysis as to how this may impact our bond rating as well because I understand that he came out with a statement relatively soon after this announcement was made within the house finance budget, but I would like to take a closer look at the numbers as to how this may impact us.
Donnis: Rep. Morales, I imagine you’re pleased the budget includes some additional money for cash starved RIPTA, the state’s public transit agency. It restores money for education in Rhode Island’s cities. Give me a minute or so on your best and worst things in this budget.
Morales: Absolutely. So I am pleased that RIPTA is going to receive the funding necessary to remain stable. However, I would have liked to see more funding directed towards RIPTA so we could actually focus on expanding services and improving transit, as opposed to simply just staying stable. But nevertheless, this is progress for public transit. At the same time, we have seen increased investments for multilingual learners across Rhode Island, which is going to be very important in terms of supporting, again, our diversifying student populations across the state. Because I want to be clear that multilingualism is not just A quote unquote “urban issue.” This impacts all of our school districts. And I would make the argument as well, the most significant investment within this year’s budget is increasing Medicaid rates across the board for behavioral health. Many of these rates have not been touched in years, some in decades. So now we are looking at ensuring that early intervention services are funded adequately so there isn’t a long wait list and there aren’t parents that are concerned.
Donnis: Let me stop you there so we can get Rep. Newberry in on his top likes and dislikes in the budget.
Newberry: My top like is that we don’t do anything to dramatically hurt the state’s economy with the broad based tax increases that a lot of folks, like Rep. Morales, I don’t pick on you specifically, but your allies are, have always been pushing, which I think is a bad idea. I think there’s a lot of stuff in that budget. We increased the road maintenance. budget, for example. I mean, little things like that are helpful. I actually agree on the Medicaid reimbursement rates. That’s a problem in the state. I know we didn’t extend it to general practitioners. I know there’s some other components in the budget to help with that, but we have a real problem in the state with keeping and maintaining medical providers because they just don’t, they can go right over to the border of Massachusetts and make more money. We need to address that. And I know it’s not always popular to say to people, Oh, well, we’re going to increase spending for Medicaid, but it’s not necessarily increasing spending for Medicaid. It’s increasing spending so we actually have healthcare providers in the state. So I’m actually a big supporter of that. Overall, to me, it’s a, it’s not the budget that I would have written. But, I can live with a lot of, there’s a lot of good in it. There’s a lot of things that I could criticize, like a lot of budgets to compromise from a lot of different people. So I’m sort of neutral on it overall, but there’s some things that are good.
Donnis: We’ve got to leave it there. I’ll look forward to spending some quality time with both of you gentlemen in the house of representatives chamber Friday afternoon into the evening. Thanks so much for joining us. State representative, David Morales, a Democrat from Providence and representative Brian Newberry, a Republican from North Smithfield.
Newberry: Thank you. Ian always happy to be on.
Morales: Thank you again for the opportunity, Ian.
