Report: R.I. budget contains $225M in non-essential spending

THE RHODE ISLAND CENTER for Freedom & Prosperity has identified almost $225 million in what it calls wasteful spending in Gov. Lincoln D. Chafee's proposed FY 2015 budget. Mike Stenhouse, CEO of the center, said the new House leadership, including House Speaker Nicholas A. Mattiello, should consider acting to reduce this waste. / COURTESY RHODE ISLAND CENTER FOR FREEDOM & PROSPERITY
THE RHODE ISLAND CENTER for Freedom & Prosperity has identified almost $225 million in what it calls wasteful spending in Gov. Lincoln D. Chafee's proposed FY 2015 budget. Mike Stenhouse, CEO of the center, said the new House leadership, including House Speaker Nicholas A. Mattiello, should consider acting to reduce this waste. / COURTESY RHODE ISLAND CENTER FOR FREEDOM & PROSPERITY

(Updated, April 3, 3:20 p.m.)

PROVIDENCE – The Rhode Island Center for Freedom & Prosperity and the Taxpayers Protection Alliance released a new report Wednesday identifying nearly $225 million in non-essential government spending in Rhode Island that could be used instead to fund tax cuts and the repeal of the Sakonnet River Bridge tolls.

The “Spotlight on Spending” report, to be presented at a 3 p.m. press conference in the Statehouse Rotunda, attacks the “bloated and unwieldy” budget proposed by Gov. Lincoln D. Chafee for fiscal year 2015. The budget Chafee unveiled in January calls for $8.5 billion in state spending and an estimated $16.2 million in new tax revenue.

“Good government is about setting spending priorities [and] preserving opportunities in the state for residents who wish to succeed,” the Center for Freedom & Prosperity report stated. “Tax relief and job creation for Rhode Island families and reducing the crushing regulatory burden on the state’s business sector must be weighed against non-essential, sometimes wasteful, spending for projects that produce little benefit to the average resident.”

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The largest spending cut recommended in the report would roll back Chafee’s proposed $50 million expansion of the historic tax credit program. Last year, the R.I. Division of Taxation offered $34.5 million in transferable credits, but had to hold a lottery to determine which projects would receive the credits since there were applications for $54.5 million in credits.

The Spotlight on Spending report identified another $34.9 million in “government handouts” to be trimmed from the budget, including $2.5 million to build a sailing center at Fort Adams State Park, $10 million to fund tuition freezes at the state’s public colleges and university, $12.3 million to pay down the debt incurred by Curt Schilling’s collapsed video game company 38 Studios LLC, $3 million to pay for renovations at McCoy Stadium and $775,000 to support the Volvo Ocean Race.

The 38 Studios debacle was among the reasons cited in the report as justification for the elimination of the R.I. Commerce Corporation, formerly known as the Economic Development Corporation.

“No matter what name the General Assembly has given the government agency tasked with improving the local economy, the concept hasn’t worked,” the report stated. The Center for Freedom & Prosperity estimated $6.2 million in savings for the state if it shuttered the agency.

Other potential savings opportunities highlighted in the report included:

  • $30.2 million to eliminate state spending that replaces decreased federal funding.
  • $19.1 million to reduce state employee overtime expenses.
  • $15.2 million to eliminate the Unified Health Infrastructure Program.
  • $11 million to eliminate House and Senate legislative grants and community service grants.
  • $8.4 million to eliminate the Governor’s Workforce Board.
  • $3.4 million to eliminate the R.I. Film and Television Office and associated tax credits.
  • $2.8 million to reduce facilities management costs by encouraging telecommuting.
  • $2.3 million to eliminate state funding for the R.I. State Council on the Arts.

In its assessment of RISCA’s grant-awarding program, the Center for Freedom & Prosperity criticized the agency’s support of “questionable and widely offensive art projects” that some taxpayers would find “in conflict with their political, ethical or religious beliefs.” The report recommended defunding RISCA and transferring its functions to a private nonprofit.

RISCA issued a statement Wednesday morning in response to the report, pointing out that Rhode Island spends less than seven one-hundredths of a percent of its General Fund to support the arts and refuting the center’s claims of misuse of funds. Transferring support of the arts to a private nonprofit would result in the loss of more than $675,000 in federal funding, RISCA said.

“In a democracy we can have an honest debate on public support for the arts,” wrote Randall Rosenbaum, executive director of RISCA, in the statement. “That debate takes place in every state, every year, and it always comes out the same. For pennies on the dollar, public support for the arts makes sense economically, educationally and in promoting a high quality of life.”

The Center for Freedom & Prosperity aimed its sharpest critique toward the Governor’s Workforce Board, alleging cronyism among some board members and claiming there has been “little proof that the Governor’s Workforce Board has managed to create more-skilled workers or encourage job creation in Rhode Island.” The center recommended the agency’s elimination.

Rick Brooks, executive director of the Governor’s Workforce Board, said the report was an “unfortunate misrepresentation” of the board’s work.

“We survey employers on a regular basis, and we have industry partners that assist us from all major sectors so we know what the workforce challenges are in Rhode Island,” said Brooks. “One of the things we’re most proud of is how responsive our funding has been to Rhode Island businesses.”

Brooks cited the announcement last week that the Governor’s Workforce Board had awarded $1.5 million in Incumbent Worker Training grants to help train 4,775 employees at 68 companies in the state. The grants range in size from $5,000 to $40,000 and must be matched by the company.

In response to the report’s implication of cronyism, Brooks said it was the first he had heard of allegations that board members had directed taxpayer-funded grants toward businesses owned by employers, friends or other board members, and asserted that the accusations are baseless.

“All grant proposals are reviewed by external reviewers, not board members,” he said. “All board meetings and board votes are governed by strict conflict-of-interest rules, and board members are reminded of those rules prior to every board meeting.”

Although Brooks was not working for the Governor’s Workforce Board in 2010 when the alleged misdeeds supposedly occurred, he said he has “never seen or heard anything that would support that kind of allegation, and it’s not how we do business at all.”

In addition to highlighting examples of non-essential spending and agencies to be defunded, the Center for Freedom & Prosperity report also outlined wasteful practices in Rhode Island’s government operations and excessive personnel in the governor and lieutenant governor’s offices, in the General Assembly and in other state agencies.

The Spotlight on Spending report recommends creating an Office of the Repealer to advise the state on ways to reduce government waste and an Office of the Inspector General, which would carry subpoena power and be responsible for investigating state agencies, local governments and government contractors suspected of mismanaging public funds.

“Our report shows that major reforms are possible if we just set spending priorities,” said Mike Stenhouse, CEO of the Center for Freedom & Prosperity. “The new House leadership team has an opportunity to send a strong early message that it will be serious about following through on its stated intent to grow jobs and the economy.”

To view the complete report, visit www.rifreedom.org.

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2 COMMENTS

  1. One person or group’s “unnecessary” expense is another constituency’s investment in the future. Cutting our state budget to the bone just to cut taxes is not a wise path. Advocates for this strategy are either (1) wealthy enough not to benefit from these investments, (2) untrusting of our government’s judgement about what constitutes wise investments or (3) doesn’t believe in our collective power to improve where we live.

  2. This group is not inferring to “cutting the state budget to the bone” by cutting programs such as the “Governors workforce program”. The areas they are referring to cutting are areas that will not affect the average Rhode Island citizen, which they state in the article. The biggest problem in this State is everyone feels their issues or needs are THE most important and shouldn’t be cut, SO the budget continues to grow and no one is willing to make the hard choices.