RI lawmakers tap rainy day fund, federal COVID money to balance budget

Lawmakers on Rhode Island's House Finance Committee passed an $11.8 billion supplemental budget Tuesday night, sending the measure to the full House for a vote Thursday.

Rhode Island's Senate Finance Committee also discussed the bill Tuesday but plan to vote on the measure Thursday, with a possible vote in the full Senate to immediately follow.

"The General Assembly has, I think, under very challenging circumstances, has done the most it can to protect the citizens and provide a foundation for what's going to be a very challenging 2021 budget," said Sen. William Conley, D-East Providence, who chairs the Senate Finance Committee.

The supplemental budget is nearly $2 billion more than the budget enacted by the General Assembly last June, mainly due to the additional $1.5 billion in federal aid for COVID-19.

"We're looking at increasing the budget so drastically," said Rep. Robert Quattrocchi, R-Scituate, who voted not to move the bill out of committee. "Where do we go from that point?"

The new proposal closes a $250 million funding gap for the fiscal year that ends on June 30 by tapping $120 million from the state's rainy day fund, a move that hasn't been done since 2009. The money will have to be paid back next year.

Lawmakers also proposing to use $50 million from the state's $1.25 billion in federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding to help school districts, with much of the money going to those with high concentrations of low-income students. The budget will replace nearly $40 million of the state's obligations to local school districts with $41.7 million in CARES Act funding already earmarked for schools.

"That's a great help for cities and towns, who as you know right now, are trying to do their own budgets," said House Finance Committee Chair Rep. Marvin Abney, D-Newport.

The supplemental budget also taps unspent funds from some agencies, including $17.8 million from the Rhode Island Infrastructure Bank, $300,000 from the Department of Environmental Management bond issues, $500,000 from forfeited assets collected by the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, and $15 million from the Rebuild RI tax credit program.

"We don't really like to take money from those, but they are there for use," Abney told NBC 10 Tuesday.

As the weeks go on, lawmakers have continued to receive estimates of increasing revenue loss at Eleanor Slater Hospital. The House Fiscal Advisor told the committee the hospital was not in compliance with federal Medicaid rules from August until February, so patients could not be billed through Medicaid or Medicare as expected. That resulted in a $50.1 million in revenue loss, on top of unresolved prior billing issues due to the UHIP computer system, which account for another $14.6 million. The state could face an additional $12.2 million in costs if the Executive Office of Health and Human Services does not meet a June 30 deadline to address the billing issue.

"$65 million is 65 bucks out of every Rhode Islander's pocket," Filippi told NBC 10. "That's a lot of money."

Filippi, who also voted not to move the bill out of committee, argues the process is moving too fast and says lawmakers should have more time to review the proposed changes.

Some lawmakers said the process is moving too fast.

"No one knows what's in it," he said. "This could be the best designed plan possible or it could be filled with holes. The point is, the members of this committee don't know before they rubber stamp the Speaker's budget."

Other lawmakers said this is the best solution.

"We protected cities and towns, you didn't see any major cuts to any of the most important agencies that serve the most vulnerable in the state," Conley said.

Lawmakers said they will likely hold off on passing the next budget for fiscal year 2021-2022, which begins on July 1, until later this summer.

Abney said the state is hoping to receive more help from the federal government to help balance that budget, which faces an estimated shortfall of $617 million.