By JIM BARON

PROVIDENCE — Nearly half of all departments and agencies in state government — 20 out of 45 — overspent their budgets last year and nearly one-third of all revenue appropriation line items in the budget — 57 of 160 — were overspent, the House Finance Committee learned Monday.

There are numerous reasons for the spending overruns — delay in implementing initiatives designed to save money or their failure to save as much as hoped; inaccuracies in estimating how much various departments and line items will need; unexpected costs, or expected federal revenues that don't come in and have to be replaced with state tax dollars — but together with predicted revenue shortfalls in the current budget year that ends June 30, they are creating a deficit of $367 million, House Fiscal Analyst Sandra Reynolds Ferland told the panel.
“The message here, basically, is that too many agencies are overspending and too many line items have been overspent,” Finance Chairman Steven Costantino told reporters after the second of four meetings called to examine the state budget deficit in advance of Gov. Donald Carcieri presenting a revised budget for the second half of the year and the General Assembly reconvening for its 2009 session in January. “That is a statement I am very comfortable with.
“Ultimately,” Costantino noted, “the enforcement of the budget and its implementation is really the administration's responsibility.
Department heads and other administration figures will appear before the committee today to answer the committee's questions about the budget process and why so departments exceed their budget allocation in so many line items.
Among the things the legislative overseers hope to learn, the chairman said, is “what are their management systems? How do they monitor their own directors? Make sure their line items are not overspent.”
He said legislators understand there are unanticipated expenses, such as an arbitrators settlement with prison guards that will cost $10 million more than budgeters expected, and an additional $10 million settlement in lawsuit arising from the 2003 fire at The Station nightclub in West Warwick that killed 100 concertgoers.
“There are things that pop up,” Costantino conceded.
He said overruns in the Department of Human Service budget have to be considered because the budget is so massive that even a small percentage of overage amounts to millions or tens of millions of dollars, but added, “I would be more concerned about departments that consistently overspend, year after year after year.” He cited the Department of Environmental Management and the state's colleges and universities as two examples.
In the end, he said, “it is the administration's responsibility to monitor its own budgets with its own directors. Our role is to provide the kind of oversight and the pressure points to make sure that kind of monitoring is happening.”
Carcieri spokeswoman Amy Kempe said Monday that the directors of departments and agencies will answer the committee's questions today. Asked about departmental and line item overspending the committee raised Monday, she said only, “All department budgets are being looked at closely and carefully.”
East Providence Rep. John Savage, a Republican, asked: “when we are passing a budget, are we not ourselves systemically creating a problem for ourselves? Are we being unrealistic in the process that we follow?”
For instance, he said, the committee earlier this year budgeted for personnel savings proposed by the governor that did not occur or did not occur when they were expected to. “Wouldn't it be better not to book those savings, have them occur and then create a surplus?”
Costantino responded that the personnel savings calculated into the budget were a signal from the legislature to the governor that “we expected those personnel savings to occur. We gave the flexibility on how to do that within the departments. If we didn't do that, would they ever even attempt to do it?”
Savage allowed that was “a valid question,” but pressed, “we're trying to create a state budget that is true and honest and doable. We are not creating a state budget to force issues that may or may not happen.”
House Fiscal Advisor Michael O'Keefe, said the solution to the problem raised by Savage is the supplemental budget prepared by the governor, that often includes cuts and other savings. “You have a series of hearings on that budget. A department head will come in and you will ask, can you really achieve these savings. Pretty much, they will say, 'Yeah, we can do this.' Then you get to the end of the year and it didn't happen.
“It would be one thing if the departments came in and said, 'That might be what the governor thinks I can do, but there is no way I can do this,'” O'Keefe continued. “We ask the questions. When everyone assures you they can and they don't, what are the options?”
Savage retorted, “We have to be conscious when we are developing our budgets that when savings are being projected, that there is a better than even chance that they will not be achieved, or they will not be achieved in a timely fashion.”