Senate OKs different budget from House

By Ted Nesi and William Hamilton
PBN Staff Writers

(Updated, 1 p.m.)

PROVIDENCE – The Senate on Wednesday passed a competing plan to close Rhode Island’s $220 million budget shortfall for the fiscal year that ends June 30, throwing a monkey wrench into efforts to deal with the deficit.

The Senate voted 27-9 to approve its own version of the supplemental budget for fiscal 2010, The Associated Press reported.

But the Senate made one major change to the bill passed earlier Thursday by the House when it got rid of a provision that would refinance the state’s long-term pension liabilities, increasing the state’s debt load.

Instead, the Senate would use $42 million from the state’s $110 million rainy day fund to balance the budget, an idea opposed by House Finance Committee Chairman Steven Costantino.

Gov. Donald L. Carcieri also opposed refinancing the pension debt, but he wanted lawmakers to make other spending cuts instead to balance the budget.

The Providence Journal reported it was the first time since 1976 that the Senate rejected a budget bill already passed by the House.

It remains unclear what will happen next, since the two budget bills need to be reconciled before being sent to Carcieri. Larry Berman, a spokesman for the House leadership, said it was unlikely the matter would be resolved before lawmakers return from next week’s recess.

In Costantino’s opinion, the Senate’s rejection of the House blueprint means “all issues may be back on the table,” Berman said in an e-mail. But negotiations between the two chambers are not happening at this point, he added.

Meanwhile, lawmakers also need to figure out how to balance next year’s state budget.

In February, Carcieri released a $7.5 billion budget blueprint for 2010-11 that would make further cuts to local aid, eliminate the film tax credit and use more federal stimulus dollars to close a shortfall estimated at $427 million.

Additional information is available at rilin.state.ri.us.