PROVIDENCE – Governor Gina M. Raimondo convened a working meeting today in the State Room with mayors and officials from Rhode Island’s cities and towns to discuss the impact of the nearly month-long legislative budget impasse on local communities. In June, the House and Senate both passed nearly identical budget bills, but have yet to reconcile their versions. Because of that, the state has not yet enacted a budget for FY18 and the state is currently operating according to the FY17 enacted budget.

Mayors and town officials from 25 cities and towns attended the meeting.

“In January, I introduced a Jobs Budget. Unfortunately, the Jobs Budget is stuck in limbo because legislative leaders have been unable to resolve their differences,” Governor Raimondo said. “As we approach the one month mark of the budget impasse, students, parents and teachers, and our cities and towns could get hurt. Mayors, town managers and their residents are counting on members of the General Assembly to come back to work and finish their job.”

Most cities and towns passed budgets earlier this year anticipating FY18 levels of local aid and education funding. Additionally, local communities and Rhode Islanders expected car tax relief beginning this year–relief that many communities have been forced to delay because of the legislative impasse.

The Governor explained to the mayors and town officials that the state is scheduled to make several payments to local communities early next week: a monthly school aid payment, a quarterly reimbursement for the car tax exemption and annual PILOT payments. Additionally, she emphasized that because the state has not yet been able to implement some of the revenue enhancements included in the FY18 budget, there is no guarantee that cities and towns will receive retroactive payments if the impasse continues.

Education Aid

The FY18 budget includes record funding for K-12 education. July school aid payments next week will be $1.45 million less than what was voted on in both chambers. If the impasse continues for another month, the monthly gap will grow to nearly $4.6 million.

“We promised Rhode Island parents and students that we’d make a record investment in K-12 education. Every month that this impasse drags on means that millions of dollars we promised our students will never find its way into the classroom,” said Governor Raimondo. “Our students deserve a fair shot at a bright future. This impasse will force local school districts to make very difficult decisions to maintain the high-quality education we expect.”

Car Tax Reimbursement

The FY18 budget includes funding for the first year of a car tax phase out. Q1 reimbursements to cities and towns would have been $9.5 million and taxpayers would have seen over $7 million of car tax relief in that first quarter. Instead, according to the FY17 enacted budget, reimbursements to cities and towns will be less than $2.4 million this quarter.

PILOT

The FY18 budget includes $45.2 million in PILOT distributions to 16 cities and towns across the state. In accordance with the FY17 enacted budget, the state will only be able to make payments of $41.9 million, leaving cities and towns with a roughly $3.2 million gap. For example, Cranston will receive $377,000 less than anticipated and Providence will receive $2.37 million less.
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