PBN Staff

Calling 2012 “the year of the cities and towns,” Gov. Lincoln D. Chafee in his state-of-the-state speech last week proposed nearly $40 million in additional education funding to local communities.

The money would come from a 2 percent increase in the state’s meal and beverage tax, part of a series of tax increases designed to generate $75.3 million in new revenue.

“Cuts in state aid to cities and towns have not only led to higher property taxes and stifled job creation, it has also drawn resources from our schools,” Chafee said. “If we want our children to compete for the jobs of the future, they must have good schools.”

Many of the state’s municipal leaders are looking to Chafee and state lawmakers for help in dealing with the burgeoning costs of underfunded health plans.

Chafee’s budget proposal, which will now be considered by the General Assembly, did not address the issue. In his speech, however, he promised a plan to tackle “the municipal pension crisis.

“I will soon introduce legislation that provides a path to solvency for our underfunded local plans,” he said.

Chafee’s budget did announce creation of the Governor’s Jobs Cabinet, which he said would seek “to retain and expand existing businesses, attract and cultivate employers in high-growth industries and develop a skilled work force that meets business demand.

“We must make Rhode Island a state that is not only primed for job creation, but also supports its existing business base and helps it to grow,” he said. •