By JIM BARON

PROVIDENCE — The budget passed Wednesday by the House Finance Committee is a “non-starter,” Gov. Donald Carcieri told reporters Thursday, because “it has no rationale, no coherence."

“I’m not going to say veto or not veto,” he added. “I have meetings set up with the Speaker (of the House of Representatives) to see what can be done here. This is not a good budget as far as I’m concerned. It is not cohesive in terms of any kind of strategy to move the state forward.”
Carcieri said the budget he proposed earlier this year was based on such a strategy. “It made investments in education, it made investments in economic development, it made investments in tax reform, it made bigger reductions in pensions and it had a bigger focus on local spending, which is what we have to get under control so that when we come out of this thing we’ve re-based the spending because a third of the state budget is nothing more than money we send to the cities and towns.”
Pointing to figures that will be officially released today showing Rhode Island’s unemployment rate exceeded 12 percent in May, up from April’s 11.1 percent, Carcieri said “we’re not through this recession and downturn.”
The governor was particularly critical of a provision in the House budget that extended a 5 percent cut in personnel and operating expenses across state government then imposed an additional 2.5 percent cut starting in June.
“To lob in a $60 million or $70 million placeholder to say just cut the state workforce when they have already been cut — state workers are taking home less money than they did last year because they got no  pay increase and they are paying increased co-shares” for health insurance, he said. “I think this is lobbing the whole budget on the backs of state employees when what they ought to be focused on is a plan. I tried to articulate a plan, a strategy. So I am hopeful, we have a lot of conversations still to take place.”
Asked if his administration could cut that addition $60-70 million, Carcieri said, “It’s going to be very difficult. Services are going to decline. There is no way we can do that without reducing compensation for state employees in some fashion.” He did not specify whether that would include furlough days, unpaid work days, layoffs or some other kind of reduction.
“We’re operating state government right now with 1,200 people who retired last year. We have almost 1,800 fewer than we had two years ago. All we are doing in this budget is saying keep on doing all the things you’ve been doing with no changes in the programming but take out another $70 million. I think it is going to be extraordinarily difficult. And I think frankly this is the wrong focus.
“I’m the first, and I’ve been doing this for years, to find ways to save money, and I’m happy to do that,” the Republican governor said. “But to lay all that burden on the state workers is not the right approach. Because the fundamental spending problem right now is at the local level.”
He said $3.2 billion dollars is being spent by the 39 cities and towns compared with $2 billion (in local dollars) by state government. “Until we get that spending at the municipalities re-based  by reducing the work forces, changing the benefits, all the things we’ve been doing at the state level, we’re not going to put the state in a position where we can flourish going forward.”
House Finance Committee Chairman Steven Costantino retorted that the governor submitted his budget before the May Revenue Estimating Conference identified an additional $200 million worth of red ink in the state’s finances.
“That put stress on the things the governor and the committee intended to do,” Costantino told The Times.