11/12/09

$200 Million and Counting

Budget forecasters are now predicting a $200 million budget deficit for this fiscal year... and that's a conservative estimate! (The new figure is $219 million.) The General Assembly, in its cowardly practice of sticking the tough decisions with the Governor, passed a joint resolution during its whirlwind rump session last week calling on him to submit a "corrective action" plan by this coming Monday. Of course, that's not going to happen. What's needed, and as fast as possible, is a supplemental budget to deal with the growing deficit, which is being driven by the steep drop in state revenue.

Governor Carcieri has indicated he's not going to call for any tax raises. Instead he's probably going to further slash revenue sharing with the state's cities and towns. When the ship of state is sinking, throw overboard the passengers is his reasoning, I guess. It might ease the state deficit a bit by cutting more funding to cities and towns but it just makes their situation that much worse. A number of RI municipalities are at the breaking point already.

This is what happens when our politicians refuse to deal with the biggest problem facing us. This situation didn't come out of nowhere; it's been building up for several years now. All it took was an average recession for RI's finances to collapse, never mind an occurance like the Great Recession. Our recovery is a long way off.

In the meantime, things are going to get ugly. Reforming state government by downsizing and consolidating won't produce instant savings. Similarly, further squeezing state workers and pensioners will be met with significant legal challenges, meaning no savings will occur anytime soon. And because of the labor agreement that came out of the Council 94 settlement, the governor can't reduce the state workforce for the rest of his term. As the Governor recently stated, "There are no easy decisions. There's no low hanging fruit."

Again, the dread prospect of state insolvency, coupled with the collapse of some of our local town governments, cannot be ruled out in the future.

What do you think our politicians should do to close this $200 million gap?

5 comments:

  1. There are so many forms of waste that occur throughout this state every day. State government should get out of the way of private business. The state run landfill is one such example of wastefull state spending. Why can't a private company run the landfill? There is little or no motivation to correct coruption, these state contractors know there jobs are secure. Gross exapmles of massive coruption and the parties involved are suspended with pay ! We need to ask questions and keep a constant watch of state officals wasting our money.

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  2. I can't see where the state will get off without raising taxes of some kind. I don't think they can cut enough to offset the deficits they'e facing. Remember, this $200 million will be on top of the structural deficit we face each year.

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  3. The Feds are going to be raising our taxes too. There's no way the Feds can pay for healthcare and reduce the deficit without raising government revenues. Expect a VAT tax in the next couple of years.

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  4. This State was set for big failure many moons ago due its Government Structure. Rhode Island will be happy and rich only when big states make money with the benefits tricling down here benefiting first the rich and the well connected then the masses below. However, when big states get into financial troubles, the results should place RI at the very bottom. I am not at all surprised and not sure why everybody turns to blame the legislature and the Governor. It's you and me dummy !!!
    Think about RI Government system. It is almost similar to a 3rd world country or a communist system where the Government is the ultimate authority on making money and spending it. In addition the authority is built in a pyramid shape when decisions are made by "ONE" authority that sits at the very top. Ask anyone in state Government about how they purchase goods and services....! They all have to submit the paper requests to one place in Providence and must be authorized by one "MAN" at the top. I always wonder how much he/she knows about what the 12,000 programs are, let alone what they need?? Doesn't this remind us about Communist Russia where every decision had to be approved by Moscow? It's not quite that bad but it is close. The control freaks we have in the state don't want you to get control of your life. We have plenty of federal dollars from the Obama administartion stimulus program and plenty of federal monies in research and developmnet but we can't spend it because the control freak executives have decided to reject everything accross the board. I know for a fact that we can hire at least a dozen people all on a federal dollar, but yet we can't, again because the control freaks said NO, yet the unemployment rate is the 3rd highets in the country ??

    Just think about the report that came out on Tuesday.... It was "Mrs Galoogly" saying this and that???? With all due respect to Mrs. Galoogly, she is not the sole authority who can crunch the numbers to report to us the bottom line? I am not even sure there in one unit in this state who is able to tell us "exactly" what the bottom line is?? I am sure Mrs. Galoogly will agree with me that her figures are not all inclusives and that there are several forms of expendtures that do not get accounted for ?
    Empower people to make decisions for themselves and get rid of the bureaucracy to provide the right fuel to the free market machines to get us out of this mess.. It's not going to happen if we wait or the legislature to came back in January to fix the problems, because they are fed innacurate information compiled by the control feaks....!

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  5. Hello Anonymous,
    Thanks for taking the time! What a great expose. I so appreciate your taking the time to think about this, and I don't disagree with anything you said. It is so great to have people like you take the time to put these thoughs in.
    Thanks again,
    Johnny

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