RI lawmakers start new year without plan for balancing budget deficit, recession relief

RI lawmakers start year without talk of recession

PROVIDENCE, R.I. — Rhode Island faces a crippling economic crisis that has left almost 13 percent of residents unemployed, caused tremendous shortfalls in the state budget and threatened to slash funding for local schools and governments.

And little of it was mentioned Tuesday during the General Assembly’s first meeting of the new year.

Instead, House Speaker William Murphy and Senate President M. Teresa Paiva-Weed, both Democrats, took the rostrum and plunged into a swearing-in ceremony and overriding about a dozen vetoes without proposing in-depth plans for getting the state budget back in the black or offering relief to the jobless.

In interviews after the meeting, Murphy mentioned that the House Finance Committee was still analyzing a proposal from Republican Gov. Don Carcieri, who has proposed cutting $125 million in state funding to cities and towns to help close a $220 million state deficit for the fiscal year ending in June.

The state faces an estimated shortfall of around $400 million for the following year.

“It’s the first day of session,” Murphy said while eating an opening-day dinner in the House lounge. “So we will have a state budget sometime before July 1st. It’s not a problem that’s going to be solved overnight. We’re not the only state facing this economic mess.”

Rhode Island was among the first states to nose down into one of the worst recessions since the Great Depression, and economists fear it will be among the last to emerge.

It began in late 2006 with a burst in housing prices that crimped consumer spending and hurt the construction industry. The state’s already distressed manufacturing sector shed jobs quickly, while a financial crisis on Wall Street made borrowing difficult for the small firms that dominate the local economy.

Lawmakers have tried to spur the economy by forcing the state’s dominant energy supplier to buy power from a large offshore windfarm they hope will be built miles off the coast, creating construction and other green jobs. But they ended last year short on action and long on commissions and committees that are still studying the economy.

House Majority Leader Gordon Fox, a Providence Democrat who hopes to succeed Murphy as speaker, said he had proposals to revive the economy after an all-day economic forum on Dec. 1. So far, he has not announced his plans, though he has suggested expanding shipping ports in Providence and North Kingstown.

Paiva-Weed said Tuesday was spent tying up loose legislative ends from the previous year and added that she will probably speak about the economy Wednesday.

She expects that Senate panels will produce legislation this year cutting red tape for small business owners, eliminating state rules blamed for running up the cost of local government and addressing poorly funded pensions for municipal employees.

While the New Year marks the start of a new legislative session, it will be spent tackling old problems.

“It’s as if we never really left the building,” Paiva-Weed said.