The Rhode Island House Finance Committee approved a budget plan last Friday which would dramatically cut state aid to cities and towns and increase taxes on cigarettes and gas. The plan was proposed by Democratic leaders in the House of Representatives and Senate, and will go before the House on Wednesday for a full vote.
The proposal is an attempt to close the Ocean State's record budget deficit - $357 million for the fiscal year ending in June. And the problem will probably worsen in the coming months. The budget shortfall is predicted to be $504.3 million for the 2010 fiscal year, according to Providence Business News.
While the proposed budget plan would raise the state's budget to $7.2 billion, the majority of the increase will come from federal stimulus funding.
In an effort to decrease state spending, the plan will cut $55 million in aid to cities and towns.
The gas tax will increase by two cents per gallon to $0.33, sending "millions of dollars" to fix local roads and to the Rhode Island Public Transportation Authority, Finance Committee Chairman Steven Costantino told the Providence Journal on March 28.
The cigarette tax will increase by $1.00 to $3.46, the highest such tax in the nation.
The budget plan will also allow Rhode Island to tax unemployment benefits - a prospect that has drawn protest because the first $2,400 of unemployment benefits are exempt from federal income tax.
Providence Mayor David Cicilline '83 and the mayors of Cumberland, Johnston and North Providence held a press conference last Sunday to request that the budget plan return to the House Finance Committee for restructuring.
Gov. Donald Carcieri '65 has also spoken out against the plan.
"Simply put, I cannot support a budget that increases the broad-based gasoline tax, provides no help to our cities and towns, avoids necessary pension reforms and refuses to provide additional help to unemployed Rhode Islanders," Carcieri told the ProJo.
If Carcieri decides to veto the plan, both the House and the Senate could override his veto.
