News & Event
PROVIDENCE — The leaders of Rhode Island’s quasi-state agencies warned of higher trash fees, a reduction in down payment help for first-time homebuyers and fewer local infrastructure projects if nearly $24 million is taken from their coffers as proposed by Gov. Gina Raimondo’s budget.
Members of the Senate Finance Committee were unimpressed by the proposed budget “scoops,” and, in what is becoming an annual rite, admonished the Raimondo administration for plugging holes in the state’s $9.9 billion budget with one-time cash.
“It seems like we are heading down a black hole with these scoops,” said Sen. Walter Felag, D-Bristol, who has introduced a bill banning the use of transfers from quasi-state agencies.
Over this year and next, the budget transfers would hit eight quasi-state agencies, ranging from the corporation that runs the Central Landfill to Rhode Island Housing, the Quonset Development Corporation and the infrastructure bank that helps finance municipal projects.
The largest transfer in the budget is a $5 million proposed scoop from the Rhode Island Resource Recovery Corporation, which operates the landfill where cities and towns in the state bring residential garbage.
Two years ago Raimondo proposed a $6 million transfer from the dump, but it was reversed by lawmakers.
Resource Recovery Executive Director Joseph Reposa said that, while the agency has a $27 million cash balance this year, in three years it projects negative cash flow. At that point, the loss of revenue could force an increase of 6 percent to 10 percent in the tipping fees charged to municipalities.
In a letter to the committee, the Rhode Island League of Cities and Towns noted that Resource Recovery raised fees for the past two years resulting, for example, in a $700,000 increase in Providence’s costs.
“While our members had serious concerns with the fee increases, they were told by [Resource Recovery] leadership that the funds were needed for capital improvements to enhance operational efficiency,” the League wrote to the committee. “While our members understand the need to extend the life of the landfill, they object to paying more to close the state deficit.”
The League also objects to the proposed $4 million transfer from the R.I. Infrastructure Bank.
The Infrastructure Bank said in its testimony that the scoop would reduce the amount it could lend to cities and towns for road and other projects.
Rhode Island Housing leaders told the committee Raimondo’s proposed $2.5 million transfer would result in fewer dollars “available to provide down payment assistance to Rhode Island first-time homebuyers.”
Additionally, “rating agencies have communicated that a reduction in RIHousing’s net assets could trigger a review of the corporation’s credit rating which could result in potential downgrade,” the agency said in written testimony.
Responding to the complaints, state Director of Administration Michael DiBiase did not dispute that using one-time revenue sources was regrettable, but said the alternative was cutting vital services, Raimondo signature initiatives or the car tax phaseout.
“We think they are not affecting their core mission,” he said of the impact of the scoops on the quasi-state agencies.
In the budget plan, the Raimondo administration told lawmakers that the quasi-state agency transfers should be the first things restored if new revenue becomes available.