“This is not a budget we rejoice in,” the governor expanded, “it's a difficult time in our state.”
Nonetheless, Carcieri hailed as “a major, major achievement,” the fact that Rhode Island has been “hauled back from the precipice” after staring into the abyss of a $425 million deficit, without raising income, sales or business taxes. “In signing this budget today, we are taking a major step forward to rein in the spending that has been exceeding our means to support it and at the same time save taxpayers money and put our fiscal house in order.”
Defending the policy of cutting payroll, employee benefits and social service programs rather than raise taxes or modify some of the recent tax breaks for the wealthiest Rhode Islanders, Carcieri said raising taxes “is not the solution. We have to put ourselves in a more competitive position” with neighboring states.
Conceding that those recent tax cuts have not shown immediate results in terms of jobs or other economic benefits, the governor said such gains take time to realize.
“You’ve got to let these reforms play through,” he said.
Carcieri lauded his recent agreements with state worker unions, for which the details have yet to be revealed, but admitted that they would not achieve the full $60 million in savings the budget anticipates. That does not mean the budget is out of balance, he explained, because changes in retirement benefits that will take effect later this year are expected to prompt a wave of state employee retirements.
To the extent that the union givebacks do not reach the $60 million level, he said, fewer of those vacated positions will be filled until the savings are accomplished.
“The budget allocates only so much money for personnel,” Carcieri told reporters after he signed the document. “We will have to manage to that level, the number (of employees) who won’t be replaced will grow.”
The governor suggested that 300-400 more state jobs may have to be eliminated.
Nonetheless, he said, after those union concessions are ratified, “we will have positioned ourselves for reforms that will pay dividends down the road.
House Speaker William Murphy called the budget “a big victory for working class people in Rhode Island.
Murphy said rank and file members of the House told leaders at a three-month succession of “listening lunches,” that, “the working class families and the middle class in Rhode Island had had enough. They did not want to see any broad-based tax increases. Our members stood thick and thin that the number one concern is that we were not going to raise taxes.
As a result, Murphy said, legislators were forced to make “tough financial cuts which I don’t think the House had seen in the 16 years I have been a member.” He conceded that, “the budget is not going to make everyone happy, but in my opinion it is going to put Rhode Island on its way to financial recovery.”
Murphy went out of his way to recognize Henry Shelton of Pawtucket’s George Wiley Center, the most visible advocate for low-income Rhode Islanders at the State House.
Shelton, he said, “has a valuable voice. Henry represents a segment of society that doesn’t have any high-priced lobbyists.”
Addressing the issue of social programs, Murphy said, “there is one thing we haven’t done enough of. We have to bring jobs to the state of Rhode Island. The best social program in the world is a good-paying job for a family who needs employment. We have to develop jobs.”
Senate President Joseph Montalbano continued along similar lines.
“People often say that government should run like a business, but the simple fact is that government is not a business. Government spends money on services and these services are relied upon by Rhode Islanders, including those in need, those who would utilize the highways, those in need of quality education and many, many more.
“We don’t make budgetary decision lightly because the impact of these decisions is felt by so many Rhode Islanders,” the Senate president said. “We were successful at holding the line on taxes, which we hope will aid in a quicker economic recovery and job growth and will not further burden Rhode Islanders already facing record high prices for their food and their energy.”