PROVIDENCE — By a vote of 61 to 9, the Rhode Island House of Representatives on Thursday passed a $13.6 billion state budget after beating back a bunch of amendments proposed by outnumbered Republicans.
Representative David J. Place, one of 10 Republicans in the 75-member House, proposed suspending the state gas tax for 90 days, noting that gas prices have reached $5 per gallon and Connecticut has suspended its gas tax. He called for using future COVID-19 relief funding to pay for the tax break.
But House Majority Leader Christopher R. Blazejewski, a Providence Democrat, objected, saying the budget already provides targeted tax relief by eliminating the car tax a year earlier than scheduled. He noted Place’s proposal would only lift the gas tax for 90 days, while the excise tax would be eliminated permanently, and he said the state might need the COVID relief funding if there’s resurgence in future years.
Place contended that eliminating the car tax early would help those driving “a brand new Mercedes or a brand new BMW” — not the “poor person driving around in a jalopy.”
Representative Brandon C. Potter, a Cranston Democrat, said there is no guarantee that a gas tax suspension would result in cheaper prices at the pump.
But Place said his proposals would slap fines of between $500 and $5,000 on any gas station owner who failed to reduce gas prices by 32 cents per gallon during those 90 days.
Representative Teresa A. Tanzi, a South Kingstown Democrat, noted the latest American Automobile Association gas prices show Rhode Islands at $5 per gallon, while Massachusetts was at $5.03 per gallon and Connecticut was at $4.98 per gallon.
“We are going to take millions and millions of our coffers to give people 2 cents a gallon,” she said. “I don’t understand why we would want to put that money into the pockets of Big Oil and gas stations and not share that with residents.”
But House Minority Whip Michael W. Chippendale, a Foster Republican, said he lives near the Connecticut line, and he and others are getting their gas in Connecticut because it’s cheaper there. “So if we reduce our taxes, we will keep more people here,” he said.
The House ended up rejecting the gas tax amendment by a vote of 11 to 56. And Representative Robert J. Quattrocchi, a Scituate Republican, thanked Democrats opposing the amendment “for great campaign literature.”
Representative Patricia L. Morgan, a West Warwick Republican, proposed an amendment to cut a tax on electricity bills while taking money from a state film tax credit program.
Morgan said inflation is eating into people’s paychecks, and the budget’s tax cuts don’t apply to enough Rhode Islanders. “We picked winners and other people are losers,” she said. “We haven’t taken care of everybody.” But everybody uses electricity, including homeowners, renters, and businesses, she said.
The budget calls for increasing the annual cap on the film tax credit program to $40 million, up from $30 million this year. But Morgan maintained that studies of the movie tax credit program have found that it “really doesn’t provide much for the money we spend on it.” She said, “It actually loses us money.”
Representative Joseph M. McNamara, a Warwick Democrat who chairs the state Democratic Party, opposed the amendment, saying Morgan was citing past studies that failed to take into account the “multiplier effect” of the film industry in Rhode Island. For example, the industry boosts local lumber businesses and provides pay for Teamsters who drive trucks, he said.
House Minority Leader Blake A. Filippi, a Block Island Republican, said the budget represents a statement of values. “I would much rather give tax relief to everyday Rhode Islanders who are struggling to pay their electric bills,” he said.
But Blazejewski said Morgan’s proposal would throw the budget out balance because the tax credits don’t represent money that’s available today.
The House ended up rejecting Morgan’s amendment by a vote of 12 to 57.
While the budget faced criticism, it also received praise.
“This budget does a lot for working people,” said Georgia Hollister Isman, New England regional director of the Working Families Party. “This budget includes significant investment in creating more affordable housing, giving more families access to childcare, and supporting the workers who keep our economy going and care for all of us.”
The budget includes “new commitments that advance our values — from covering all undocumented kids through Medicaid, to making a busy bus line free, to piloting social housing and putting money in the pockets of struggling parents through a state-level child tax credit,” Hollister Isman said.
The Community Provider Network of Rhode Island said it was grateful the budget invested more than $110 million in adult developmental disabilities services and early intervention services for children. That included $35 million to increase wages for direct care workers, an estimated $4 million investment in a 45 percent rate increase for early intervention rates, and $20 million for children’s services.
“Our elected officials have listened to the needs of Rhode Islanders with disabilities and responded with a historic investment,” network executive director Tina Spears said. “This is an investment in Rhode Island’s most vulnerable populations and gives a broken system a chance at repair.”
Representative David Morales, a progressive Providence Democrat, said the budget makes “historic and critical investments that are going to support and transform the lives of working people and families, from Medicaid recipients to those engaged in the care economy.”
For example, he said the state is increasing dental reimbursement rates so they are competitive with Massachusetts for the first time since the mid-1990s. “We’re fighting to make sure that working people on Medicaid are no longer denied the dental treatment they deserve because providers refuse to accept Medicaid due to low reimbursement rates,” he said.
Also, Morales said, “We’re comprehensively expanding Medicaid coverage to every lower-income child in our state and all new mothers, a significant achievement.”
The budget did not include $300 million, as proposed in a Senate bill, to launch a state Department of Housing that would buy and build homes in response to Rhode Island’s housing crisis. But the House did amend the budget to include a $10 million pilot program for low-income public housing.
“This program will demonstrate the viability of creating a state Department of Housing to develop mixed income public housing, which is what we need to solve the state’s dire housing crisis,” said Jordan Goyette, Reclaim RI political director. “Rhode Island is now at the cutting-edge of using the public sector to solve a housing crisis where the private sector has failed.”
Representative Brian C. Newberry, a North Smithfield Republican, said, “There is a lot in this budget I like.” But he noted the number of state budget articles has plunged from about 40 to 14 articles over the years. He said the budget document has become increasingly “opaque,” keeping the public from understanding exactly where the money is going.
Newberry cited the example of the $1 million that had been in the 2019 state budget for a Cranston chiropractor, Dr. Victor Pedro, for a “cortical integrated therapy” program. Then-House Speaker Nicholas A. Mattiello, a Cranston Democrat, pulled the funding after it came to light and he faced criticism.
Newberry proposed an amendment that would have deleted a section that says the Assembly may provide a written “statement of legislative intent” signed by the House and Senate finance chairs “to show the intended purpose of the appropriations” in the budget.
But Blazejewski said, “I completely disagree with the premise.” He questioned whether the state budget was more transparent 20 years ago or whether more budget articles meant more specificity. He said the House Finance Committee spends hundreds of hours in hearing and places thousands of pages of documents online.
That amendment failed by a vote of 10 to 58.
The House crafted the budget after Rhode Island received more than $1.1 billion in federal American Rescue Plan Act funds, and the state had budget surplus of $878 million for fiscal year 2022.
“Rhode Island has been making a very strong economic comeback since the worst days of the pandemic,” said House Speaker K. Joseph Shekarchi, a Warwick Democrat. “With a boost from the federal resources we’ve received over the last couple of years, we’re going to be able to help Rhode Islanders from all walks of life through this budget.”
Among other things, the budget provides $250 million for housing. “With this budget, we’re saying we hear Rhode Islanders when they say they can’t find housing they can afford and they are feeling the pinch of inflation,” he said.
While nine Republicans ending up voting against the budget, one voted for it – Representative Barbara Ann Fenton-Fung, the Cranston Republican who defeated Mattiello in House District 15. “This budget helps to fulfill a campaign promise – that the elimination of the car tax would continue despite my defeat of the previous Speaker – and we got it done a year early,” she said.
Fenton-Fung, who is married to former Cranston mayor and GOP congressional candidate Allan W. Fung, said, “It also eliminates the tax on military pensions, something my husband and I have passionately spoken about over the years. Additionally, it also gave over $5 million more dollars to Cranston in direct aid and over $2 million dollars more to our city’s schools than previously expected.”
Plus, she said, “The one-time child tax credits for families during a period of high inflation, reforming the way we approach services for those with home care and group home needs, and putting a profound investment in mental health services in this state made me believe that this budget largely reflected the values of the people of District 15.”
The state Senate is expected to take up the budget on Wednesday.