Raimondo’s budget: 12 things you need to know

Providence Journal (RI)

Jan. 19--Governor Gina Raimondo unveiled a $9.25-billion spending plan Thursday that banks on collecting tens of millions of dollars more in sales tax from online purchases to pay for state programs.

The fiscal 2018 budget represents a 3.5-percent (roughly $300 million) spending increase over the plan the General Assembly approved last year. Here are some of the highlights:

1. Rhode Islanders would be forced to pay sales tax on many more online purchases.

Online retail giant Amazon.com announced this week that it will begin collecting Rhode Island's 7-percent sales tax on Feb. 1. The state is banking on many more online companies following Amazon's lead -- a move that would account for $34.7 million more in sales tax revenue next year.

Raimondo's plan would essentially coerce online retailers to start collecting and remitting sales tax. Under law they would have to force a pop-up box to appear on the screen when a Rhode Islander makes a purchase stating that there is a tax to be paid. Once a year, companies would have to mail customers a form for paying the tax. Other states, including Colorado, have adopted such laws.

"This puts the retailers in the position to step up and do the right thing," Department of Revenue Director Robert Hull said.

2. The budget includes no contingency planning for a repeal of Obamacare or any other federal cuts that could come from Donald Trump's administration.

"No," said Office of Management and Budget Director Jonathan Womer when asked if the governor's budget takes the new federal Republican administration into account.

"There's a of uncertainly coming out of Washington, but until we have more clarity around that, we couldn't anticipate it," he said.

3. Smokers would see a 50-cent hike in the cigarette tax.

Rhode Island currently has the third highest cigarette tax in the nation at $3.75 a pack. Raimondo proposes a 50-cent hike to $4.25 a pack. If approved, only New York's cigarette tax would be higher at $4.35 a pack.

The increase is estimated to produce another $8.7-million in revenue -- $2.5-million of which would go to an outdoor recreation fund. Last year, the governor proposed a 25-cent increase in the tax, which was rejected by the General Assembly.

4. Providing two free years of college tuition for Rhode Islanders at in-state colleges will cost taxpayers $10 million next year.

Estimates released Thursday then peg the cost of providing free tuition the Community College of Rhode Island, Rhode Island College and University of Rhode Island at $13 million in fiscal 2019, $18 million in fiscal 2020 and $30 million from fiscal 2021 onward.

University of Rhode Island President David M. Dooley said the plan addresses a major issue with college completion. He referenced estimates that more than 100,000 Rhode Islanders have earned college credits but have not received a degree.

5. The minimum wage and wages for home health care workers and developmental disability workers would all increase.

The budget proposes increasing the minimum wage from $9.60 an hour to $10.50 an hour as of Oct. 1, 2017.

Meanwhile it provides $11 million in combined state and federal funds to increase wages for home health care workers (roughly a 7 percent increase) and developmental disability workers (roughly a 5 percent increase.) Both classes

6. Medicaid reductions totaling more than $39 million would help to pay for the governor's spending plan.

The savings the state is counting on would be achieved by freezing reimbursement rates for hospitals, nursing homes and the administrative portion of Medicaid. Then, beginning Jan. 1, 2018, hospitals would take another 1-percent cut.

7. The Emergency Management Agency would be merged with the Department of Public Safety and overseen by a new public safety commissioner.

When Raimondo announced Colonel Ann Assumpico as the new superintendent of the State Police she also said she intended to create a new cabinet-level position in a director of public safety. Her budget creates that position, which would also oversee the state's emergency management operations.

8. The budget plans for a future cut in the car tax with the state reimbursing cities and towns, but wouldn't pay for it until fiscal 2019.

Raimondo's calls for reducing assessed value of vehicles by 30-percent across the board. The state would reimburse cities and towns some $58 million for the lost revenue. Because of the timeline in which car taxes are billed, the state does not have to account for funding that change in the coming year's budget.

9. Another $10.1 million would be added to the I-195 fund in the state's ongoing quest to lure developers to the land.

The fund was created by the Raimondo administration in 2015 with $25 million. More than $19 million from that fund will go to assist the building of a planned innovation center.

Asked if other developers are interested in money from that fund, Commerce Secretary Stefan Pryor said yes but did not elaborate.

10. The budget is silent on marijuana policy.

While the governor used last year's budget to make major regulatory changes to the state's medical marijuana program, Raimondo did not address marijuana policy at all in this year's budget.

Since Massachusetts voted to legalize recreational marijuana in November she has said the issue is one that will have be dealt with early in this General Assembly session. Not addressing the issue in the budget means it will be up to lawmakers to decide to take action.

11. Elderly and disabled bus-riders would see some relief with free 10-trip RIPTA tickets.

The budget includes $300,000 for free passes issued through the Rhode Island Public Transit Authority. It provides no funding for the same riders to avoid a 50-cent system-wide fare hike.

12. In an effort to reduce recidivism, the state will spend more on mental health services in prisons.

Raimondo's budget includes $410,000 to improve mental health services. That includes funding for new clinical social workers and improving discharge planning for prisoners with behavioral health issues.

Another $200,000 will provide 60 beds for for individuals with behavioral health care issues and criminal justice histories in 10 addiction recovery houses.

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