PROVIDENCE, R.I. - Governor Gina M. Raimondo's Fiscal Year 2016 budget is a forward-looking, balanced budget proposal rooted in the belief that every hardworking person deserves the chance to make it in Rhode Island. Her budget offers significant investments in growth and has no broad-based tax increases despite closing an inherited $190 million deficit.
"If we rebuild this economy and create middle class jobs for Rhode Island families, everything is possible," Raimondo said. "And if we don't, nothing else will matter. Our economic engine has run out of gas, and we have been in decline. Now is the time to spark our comeback."
Good, stable jobs are the lifeblood of a thriving economy, but right now there are not nearly enough opportunities for families to succeed. Rhode Island remains among the last states in the nation in unemployment and in job growth. Per capita income is more than 20 percent lower than both Massachusetts and Connecticut.
In order to spark a recovery, Raimondo announced a budget that focuses on helping students and workers build the skills they need for a 21st century economy, attracting companies to invest and grow in the state, and fostering innovation to deliver more efficient and effective government for citizens. The strategic choices outlined in the budget will put Rhode Island on a path to becoming a place where new businesses want to start, where existing businesses can grow and expand, and where every family knows they can succeed.
The budget Raimondo introduced makes progress on the structural deficit in two principal ways. First, the efforts to reinvent Medicaid are designed to control the amount we spend on our largest cost-driver, while improving the quality of care and protecting the most vulnerable citizens. In addition, the focused investment in economic development-including renewed emphasis on education and skills training-are designed to reinvigorate our economy and create jobs, which will lead to greater revenue growth.
"No longer can we lurch from year-to-year cutting and trimming to scrape by," Raimondo added. "We must be bold. But we must also recognize our problems were not created overnight and will not be solved overnight. We must come together to place the state on a path of growth and opportunity for everyone. We can only move forward together."
Highlights of the Raimondo Jobs Budget:
BUILD SKILLS: The JOBS budget takes bold action to educate our children and train our workers
• Makes record investments in K-12: $35.5M increase over last year
• Funds full implementation of all-day kindergarten across Rhode Island
• Supports expanding the number of state-sponsored Pre-K classrooms in RI from 17 to 60 by 2019
• Establishes a state School Building Authority to put people to work modernizing school buildings
• Invests in dual enrollment - if a student wants to go to college, or start a career right after high school, Prepare RI will make getting a degree or an industry certification more affordable & attainable
• Creates last dollar scholarships for students by eliminating a redundant state agency
• Establishes loan forgiveness program for graduates who stay in Rhode Island to work in priority fields
• Aligns job training with businesses' needs so we train people for jobs that exist
ATTRACT: The JOBS budget invests to attract new businesses & help grow our existing businesses
• Reduces regulatory burdens/fees by eliminating unnecessary licensing requirements that hurt job creation
• Funds the new Office of the Secretary of Commerce, and invests an additional $3.85 million in the Commerce Corporation, reversing years of cuts & restoring agency funding to 2001 levels
• Cuts the commercial sales tax on energy & begins to eliminate "nuisance" taxes that make RI an outlier
• Creates a robust & aggressive set of economic development tools to make Rhode Island competitive with our neighbors so that we can attract companies to create jobs, invest in construction, invest in the I-195 land, and foster an innovation economy
• Expands our investment in a statewide tourism effort to boost our economy by attracting more visitors
INNOVATE: The JOBS budget enhances accountability and delivers value to taxpayers
• Lays the foundation to reinvent Medicaid:
o Medicaid accounts for approximately 30% of the budget & RI has the 2nd highest cost per enrollee of any state in the nation (60% above the U.S. average)
o We are implementing reform so the system delivers better care -- without harming the most vulnerable among us -- and so the system will be sustainable for taxpayers
• Modernizes antiquated personnel rules for state employees, and achieves personnel savings for taxpayers
OPPORTUNITY: The JOBS budget provides relief to families who are struggling
• Puts people to work on infrastructure projects by creating a School Building Authority; establishing an Infrastructure Bank (a plan with the Treasurer to complete energy efficiency and renewable energy projects); and fully funding the Municipal Road and Bridge program
• Raises the minimum wage to $10.10
• Expands the Earned Income Tax Credit to 15% in two years
• Exempts Social Security benefits from state income tax for lower-income seniors
• Increases funding for Meals on Wheels so seniors can stay healthy and nourished in their homes
FISCAL RESPONSIBILITY: The JOBS budget makes progress on eliminating the structural deficit
• Closes a revenue shortfall in a balanced way with no broad-based tax increases: of the $190 million shortfall this year, nearly 2/3 of the deficit closing is from spending reductions
• To address the structural deficit, the Governor (a) will achieve significant savings from restructuring our greatest cost driver (Medicaid); (b) will work with state employees to achieve savings on personnel costs; and (c) will invest in economic development to spark a turnaround and grow the economy
###