1/27/10

It's All Up to the General Assembly (and that's scary)

Governor Carcieri's final budget address was long on rhetoric and short on specifics, which is a disappointment. The situation requires less words and more concrete action steps to get our dismal economy going again. I appreciate the Governor's commitment in principle to holding the line on tax increases; unfortunately, principles will be swept aside by a legislature that is less averse to tax hikes and is the final decider on how to solve a looming $400 million budget deficit. The Governor also called for cities and towns to cut salaries, as has occurred with state workers, but that's a community by community decision and, again, the Governor can only suggest. The major municipalities are attempting just that but they're hemmed in by contracts; some municipal unions are going along, as in Pawtucket and Cranston, but progress along that front will be uneven. Appeals to the General Assembly for relief will be met with more sympathy from legislators who, of course, represent those very same communities.

The centrality of the General Assembly in all this will be demonstrated by the way they handle the first crisis on their plate: the current operating budget deficit of some $200 million. If they reject the Governor's requests to local cut aid, which I expect them to do, then the next question will be what taxes will they be willing to raise.

The state's scorecard for the last seven years reveals a $2.4 billion increase in state spending during a time in which 32,400 jobs were lost and the state's "offical" jobless rate climbed by 7.6 percent. (And it has only been during the past two years that the state has slimmed its workforce down a bit.) Clearly, the state has not managed its spending well at all, and state spending continues to remain at the heart of its fiscal troubles.