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Carcieri '65 announces new budget proposal

Facing one of the largest budget deficits in Rhode Island history, Gov. Donald Carcieri '65 unveiled his plan for a balanced state budget Tuesday.

Carcieri's budget recommendations for the next fiscal year rely on funds from taxes and the federal stimulus package to fill the anticipated gap - more than $860 million over the next two years. He has also proposed to increase state spending by about 10 percent in 2010.

Under Carcieri's proposals, the state would spend a total of $7.62 billion in the next fiscal year. The governor's plan for the next two years also relies on more than $300 million from the federal government to cover the state deficit.

While the stimulus money includes $110 million from a "state fiscal stabilization fund" to be spent on education and aid to local communities over the next two years, the governor's proposed budget also eliminates a revenue-sharing program that gave $31 million in state aid to cities and towns in his revised 2009 budget.

The revenue sharing program, which started in the 1990s, sets aside a portion of state tax revenue for aid to cities and towns.

The governor's budget recommendations also alter the state's income tax structure, increasing the earned-income tax credit for low-income households while raising taxes for some Rhode Island couples and individuals making less than $75,000 annually.

Carcieri's proposed budget also includes a five-year phase-out of the corporate income tax. It would raise the state's cigarette tax by $1 and slash funding for RIteCare, the state's subsidized health insurance. Those cuts would leave 38,000 parents without dental coverage, according to the Providence Journal.

But Carcieri - whose approval rating among Rhode Islanders recently hit a low of 34-percent, according to a poll by the Taubman Center for Public Policy - will have to get his budget through the state's Democrat-dominated General Assembly. The legislature will debate the Republican governor's proposal over the next few months before creating its own revised budget for his approval.



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