Today RIPEC released a report encouraging an Investment-Based Budgeting process as a response to the proposed FY 2008 State Budget. The report provides a series of goals that RIPEC’s proposed Fiscal Get Well Plan incorporates. The goals of this plan include:
- A Three to Five Year Binding Cap on State Spending Growth. The Governor proposed a 6.2 percent increase on the spending cap, which needs to be considered along with Section 35-3-7 of the General Laws places a 5.5 percent spending cap on the budget the Governor submits to the General Assembly. RIPEC suggests that such a statutory cap be mandated for the next 3-5 fiscal years and apply to spending supported by all revenues, with the exception of federal receipts.
- Defining a Sustainable Safety Net. Simply limiting the growth in spending will not assure that necessary government programs can be sustained, delivered in a cost-effective manner, and are responsive to Rhode Island’s citizens. Therefore, concurrent with establishing a temporary spending cap there is a need to create a public process to help inform the Governor and General Assembly as they: Establish the priorities of government and the outcomes that matter most to citizens; Determine how much citizens are willing to spend; and Decide how best to deliver and sustain such services.
- Reduce Reliance on One-time Revenues. Periodically, one-time revenues have been used to balance State operating budgets. Approximately six percent of the revenues used to balance the Fiscal Year 2008 State budget would be generated by non-recurring revenues. The Governor’s FY 2008 budget includes approximately $210.5 in one-time revenues.
RIPEC believes that the test of the fiscal soundness of any budget plan is whether ongoing resources are adequate to support current operations, whether current obligations are appropriately funded and revenue realistically projected, whether expenditure priorities are responsive to the needs of citizens, and what the out-year fiscal implications of the proposed spending plan are.
The following RIPEC Comments not only outline the Governor’s FY 2008 Budget request and summarizes key policy issues, but also focuses on a Fiscal Get Well Plan that is needed to eliminate out-year deficits, enable investments in programs that will improve Rhode Island’s economy and maintain the State’s credit worthiness.