BY JIM BARON

PAWTUCKET — Dealing with the General Assembly in this especially austere budget year, the local chamber of commerce is hoping to preserve the gains it has achieved in the last few years, while the city of Pawtucket just wants to avoid being bled by further cuts in state aid.

That was the dreary situation report the Pawtucket Advisory Group (PAG) received over lunch Tuesday from David Carlin, who lobbies at the Statehouse for the Northern Rhode Island Chamber of Commerce and the Rhode Island Chamber of Commerce Coalition, and from Pawtucket City Clerk Richard Goldstein, who buttonholes legislators on behalf of the city.
“Budget is everything for us right now,” Goldstein said, adding, “we know where it is going it is no surprise,” meaning that Pawtucket and every other local community is going to see its state revenue sharing money zeroed out by Gov. Donald Carcieri and the General Assembly.
He praised the work of the city’s legislative delegation from staving off the total elimination of the aid for the current year, which he said would have been “devastating” for the city in the last months of its budget year by restoring some revenue sharing funds in the supplemental budget.
Pawtucket had been relying on receiving the $4.6 million allocated when the budget was finalized last June, but ended up getting only $2.1 million in funds the legislature restored after the governor proposed wiping out the program.
“If it weren’t for that,” Goldstein told the business group, “we would be, well, I don’t know where we would be.”
When he testified before the House Finance Committee on the governor’s proposal to eliminate the revenue sharing, Mayor James Doyle said publicly that if none of that money came through, the city faced bankruptcy by April 15, when its bond payments came due.
Goldstein told PAG members that Doyle’s “top priority” this year is to get the lawmakers to make changes in
the so-called “Caruolo Act” that allows school committees to sue the communities where they are located if they determine that they can not adequately operate the schools on the budgets they have been allocated.
The major problem with that 1995 law, Goldstein said, is that if the schools are awarded additional funds by the court, all of it must come from the city’s property tax payers. “There is no help from the federal government, there is help from the state at this point,” to defray the new budget obligation.
On yet another budget-related item, Goldstein declared that “school funding is going to be crucial.” Pitching his argument to the businessmen in the room, he said, “we always talk about how we want to improve the business climate in the state,” but lowering taxes is just one aspect of that. “But unless we have a school system that is providing those businesses with people who can go to work in high-quality, high-education positions, they aren’t going to come here. We all know that. We have to find a way to fix that problem. That is probably the biggest problem that we have.”
All of the representatives and senators who have all or part of their districts in Pawtucket were invited to the meeting. Attending were three representatives, House Democratic Whip Peter Kilmartin, and Reps. Elaine Coderre and Elizabeth Dennigan.
Coderre, who served on the special pension commission that is still finalizing the amount of savings that could be achieved with different changes to the current system, said a list of changes will be selected and voted on in a second supplemental budget for the current year that will likely pass at the same time as the budget for the 2010 fiscal year.
She said the panel is looking at factors such as changes in the retirement age, the number of years of service required to collect a pension and disability pensions. “Every facet that was supposedly driving the pension system into the ground was handled,” Coderre told the group. “There was a laundry list of 15 items.”
She said they also studied the possibility of changing over from the current defined benefit pension to a defined contribution plan like a 401(k) or a hybrid defined benefit/defined contribution plan.
Since the nationwide financial crisis caused stock prices to dwindle, people are less enthusiastic about using a 401(k) plan as a pension, Coderre said, “the wind has been taken out of those sails.”
Dennigan told the PAG that there is a little known part of the federal stimulus package that allocates $11 billion for education that will go to the 10 states who made the best use of the first round of the education stimulus money. States that used the money to plug budget holes, as Rhode Island is doing, “wouldn’t be viewed favorably,” she warned.
Carlin said tax policy changes in the last three to four years, including reinstituting the automobile excise tax phase out, capping property taxes, lowering the estate tax and capital gains tax in creating the alternative flat tax for high income earners, have been “extremely positive. We have made a lot of progress as a business community because of the General Assembly’s vision on tax policy. We have made Rhode Island a more attractive place to come to do business and stay and expand a business.”
The chamber, Carlin said, “is mostly playing defense,” because there has been “tremendous pressure” applied by advocacy groups to reverse some of those tax policies.
“We are trying to keep tax policy as is,” he said.