The proposed FY 2007 general revenue request of $3.2 billion represents a 1.0 percent increase from the FY 2006 Revised Budget. If one adjusts this for deferring uncompensated care payments and converting a portion of the Judiciary budget to restricted receipts, the Governor’s budget would increase by 3.3 percent over FY 2006.
The following RIPEC Comments outlines the Governor’s FY 2007 Budget Request and summarizes key policy issues RIPEC has identified. In addition, as the state closes in on the May Revenue Estimating Conference, it is incumbent on policymakers to position the state so that its spending demands do not further outpace projected revenues.
The following highlights some of the comments contained in this report:
- The Governor has proposed a number of entitlement reforms to reign in the fastest growing component of the State’s budget. For example, Rhode Island’s per capita Medicaid expenditures are the second highest in the Nation. RIPEC believes it was necessary for the Governor to pursue entitlement reform and cost control.
- Another significant budget driver is the continued demands personnel costs place on the operating budget – which equal one-quarter of the state spending.
- If the May Revenue Estimating Conference estimates revenues in excess of November figures, RIPEC believes these resources should be used to close the existing budget and maintain the bottom line proposed by the Governor.
- The Governor has continued the recent practice of allocating a significant portion of the Rhode Island Capital Fund to support debt service rather than pay-go capital financing. While the Capital Fund has served as a relief valve when the state faces operating deficits, this is at the expense of pay-go financing to maintain state assets.
