Governor Dan McKee on Thursday proposed spending $12.8 billion next year in a state budget which seeks to lift Rhode Island out of its COVID slump with hundreds of millions of federal dollars to help businesses and build homes.
The tax and spending plan for the year beginning July 1 would not increase or reduce broad-based taxes. Unlike recent budgets, most state user fees, such as beach parking fees, would remain unchanged.
McKee wants to invest $168 million in the struggling Eleanor Slater Hospital system, including spending $108 million on a new hospital building in Burrillville.
He also wants to funnel $50 million in down payment assistance to potential buyers struggling to find homes.
And, yes, he is again proposing to legalize recreational marijuana sales.
Though awash in federal cash and blessed with a rare budget surplus at the start of the year, McKee’s budget largely avoids creating new permanent government programs or increasing public benefits.
Instead, he wants to use the surplus and $1.1 billion the state received from the American Rescue Plan Act for a series of large temporary cash injections to trigger economic growth, fight the climate change and alleviate the labor shortages plaguing many industries.
“We now have a historic opportunity to write Rhode Island’s next chapter, with $1.13 billion in federal funds and a surplus of more than $600 million available to invest in our state’s future,” he said. he declared in a budget introductory letter.
McKee earlier unveiled some of its proposals to use US bailout money, including $250m for a series of housing schemes, $95m to develop wind turbine relay ports in East Providence and Quonset Point, $37 million to help people install electric heat pumps. and $22.5 million for “academies of higher education”.
But there is much more, including:
$70 million to unidentified recipients in “blue economy” industries, including “ports, shipping, defense, maritime trades, ocean-based renewable energy, aquaculture, fisheries , tourism and leisure”. And McKee also wants to create a “Blue Technology Innovation Center” that turns research, including data from a sensor network in Narragansett Bay, into commercial ventures.
$47 million to the Rhode Island Convention Center, including $9 million to cover operating losses and $38 million for unspecified “facility improvements”.
$15 million to McKee’s “municipal learning centers,” a kind of after-school program he started as mayor of Cumberland and tried to introduce elsewhere.
-$45 million for a new round of small business grants.
$30 million to replenish the state unemployment insurance trust fund and avoid future payroll tax increases that fund unemployment benefits.
$46 million to rebuild Galilee Harbor pier and bulkheads in Narragansett
$30 million to build a “shared wet lab space” for the bioscience industry
-$28 million to tourism and hospitality industries
$3.3 million to connect adult correctional facilities in Cranston to the internet
$5 million to build restrooms, customer service windows and covered waiting areas at the Pawtucket commuter rail station under construction.
And a $150 million Public Health Contingency Account for unforeseen COVID emergencies
If they can find a home for sale in the state’s tight housing market, potential buyers could get up to $17,500 to put down towards their down payment.
The $50 million plan targets buyers in low-income and minority communities. Specific eligibility rules have yet to be drafted, but Commerce Secretary Stefan Pryor said they would target buyers with lower incomes and credit scores than traditional lenders work with.
Earlier this year, state lawmakers approved $15 million for affordable housing development through Rhode Island Housing, and McKee’s budget proposes to add another $90 million.
With the money, administration officials hope to build 1,000 new apartments for people earning no more than 80% of the region’s median income, and preserve another 500 units.
Also from the federal kitty, the budget proposes a $25 million grant program to purchase properties that can be turned into affordable housing, $20 million to “support workforce housing.” , $21.5 million to house Rhode Island’s homeless and $25 million for “the express with the goal of creating housing and community/commercial spaces that meet the needs of the community, as well as support essential home repairs.”
Office of State Management and Budget Director Brian Daniels said one of McKee’s main budget goals was not to spend money that would leave a giant hole when federal money would go away.
But it’s unclear what happens to some of the payments offered to social service providers after bailout funds run out.
McKee proposes $42 million in retention bonuses for child care workers; $12.5 million to increase the salaries of workers in the Ministry of Children, Youth and Families; $15 million to pediatric medical practices; $11 million to providers of early intervention for young children and $10 million to hunger relief nonprofits.
What happens when that money is spent?
“We’re keeping tabs on what’s happening with the Build Back Better Act,” Daniels said of President Joe Biden’s sweeping domestic spending bill. “It’s something that can address some of those costs.”
McKee is again seeking to legalize recreational marijuana sales. But in the absence of an agreement with General Assembly leaders on how legalization will work, his budget does not call for pottery shops to open until 2023 at the earliest.
Under McKee’s budget plan, the state would erase past marijuana convictions for offenses that no longer exist.
On a full-year basis, the budget estimates that taxes and fees on marijuana sales would generate about $17 million annually.
McKee’s budget would spend 2.2% less than the $13.1 billion budget passed by lawmakers for the current year and about 1% less than last year. However, this represents a 16% increase from the $11 billion in the 2019-20 fiscal year before the pandemic.
Eleanor Slater Hospital
McKee halted his predecessor’s controversial new construction and downsizing plans when he took office last March.
But he has now adopted several key elements of Gina Raimondo’s plan for the public hospital with campuses in Cranston and Burrillville, and is now proposing a $167.8 million investment in Eleanor Slater Hospital over the next seven years. .
In addition to his previously announced plan to renew the license of one of the buildings on the Cranston campus as a free-standing psychiatric hospital, he proposes to build a $108.2 million “acute long-term care hospital” at the sprawling Zambarano campus in Burrillville.
The new 100-bed hospital would be “designed to meet the needs of patients already served at the facility”, and others needing “services with limited availability in the state and…specialty populations”.
The plan that consultant Alvarez & Marsal devised for Raimondo assumed tens of millions in annual savings through a major reduction in Zambarano’s population – and unionized staff.
It assumed that the state could transfer patients with serious and long-term health conditions and injuries to other unidentified destinations. The goal: to reduce the population of a hospital with a capacity of 189 patients with health problems to 59 – and 84 actual patients at this time in 2020.
There is no mention of downsizing in McKee’s proposal, only new construction on the Zambarano campus as well as “essential upgrades” to mechanical and oxygen systems, for example, in the part of a $210 million investment in improving state buildings, including the State House ($45 million).
McKee has also earmarked $22.4 million to introduce electronic medical records at the state hospital, as has long been required and needed, according to teams of independent inspectors.
On a related front, McKee is proposing significant spending in the broader area known as “behavioral health.”
This includes $28.1 million to spur the creation within the state’s existing mental health network of behavioral health clinics designed to provide “deinstitutionalized supports, medical screening and monitoring, and social services to particularly vulnerable populations.” vulnerable with complex needs”.
McKee also proposes the creation, on a pilot basis, of a “mental health court” to direct defendants with mental illnesses to treatment programs, instead of prison or commitment to the public hospital. .
“Success may result in diversion, reduction of charges, alternative sentences or dismissal of charges.”
While key lawmakers have proposed building a separate mental institution for troubled girls under the care of the state’s Department of Children, Youth and Families, McKee appears to be considering a scaled-down version of 6 millions of dollars.
McKee is seeking to wipe pension debt off the state books that dates back to the financial and credit union crises of 1991-92.
Specifically, he proposes to pour $61.9 million of the state surplus into the pension fund to close the chapter on deferred taxpayer contributions that taxpayers have been paying since then, at a cost of about $6 million. dollars per year.
McKee says this will result in “annual savings for over a decade.” (The state long ago repaid $20 million actually borrowed from the fund.)