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Raimondo submits nearly $9.4B state budget plan to lawmakers

January 18, 2018

PROVIDENCE, R.I. (AP) — Rhode Island Gov. Gina Raimondo released a nearly $9.4 billion state budget plan on Thursday that cuts Medicaid programs and generates new revenue through sports betting and increasing access to medical marijuana.

The legislature will review the proposals and present its plan before the 2019 fiscal year begins in July.

The Democratic governor recommended a budget that’s about 1.5 percent higher than last year’s enacted budget. The $3.8 billion general revenue budget is 1.7 percent higher. It would close an estimated $204 million deficit.

Raimondo is asking for a $250 million bond for school construction, which is her top priority. She allocated $20 million for a second cut in the state’s car tax, the House speaker’s top priority.

Here are some highlights:

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CLOSING THE DEFICIT

The Raimondo administration is proposing to cut the budget for health and human services, which includes Medicaid, by about $100 million. It plans to save $28.5 million if the federal government reauthorizes a popular children’s health insurance program. Another $18.2 million would come from restructuring the current contract with the insurer who coordinates care for Medicaid and Medicare recipients, and from moving people from nursing homes to in-home and community-based care settings to get additional federal funds.

The budget also proposes adding copayments of up to $8 for certain services for adults using Medicaid, such as inpatient hospital visits, non-emergency visits to the emergency room and non-preventative physician visits. The administration wants to eliminate guaranteed profit margins for insurers for Medicaid beneficiaries to save $23.7 million and maintain current hospital rates, instead of raising them, to save $14.3 million. State officials say they’re cutting costs without cutting eligibility or making broad-based benefit cuts.

Raimondo also wants to divert millions from quasi-state agencies to help close the deficit and use Department of Motor Vehicles fees that would’ve gone to the transportation department.

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NEW REVENUE

The budget would authorize sports betting at the Twin River casinos, if the U.S. Supreme Court legalizes it. The administration is counting on $23.5 million in revenue from sports betting if it can start on Oct. 1.

Raimondo also wants to raise taxes on tobacco products and begin taxing cloud-based software services, such as iCloud storage. The tax wouldn’t include streaming services, such as Netflix.

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MEDICAL MARIJUANA

The budget would authorize 15 dispensaries for medical marijuana. State law currently allows for three. Massachusetts and Connecticut cardholders would be allowed to buy medical marijuana in Rhode Island and acute pain would be added as an eligible condition. The budget projects $5.1 million in revenue from increasing access.

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EDUCATION

Raimondo is calling for a $1 billion investment to fix the state’s schools. The budget proposes asking voters in November to authorize a $250 million bond for the first phase. State officials say it’s affordable because the state will have paid off old debt.

The budget includes $80 million for school construction. The administration wants to allocate $80 million annually for five years, or $400 million. Another $350 million is expected from municipalities, for a total of $1 billion.

Raimondo also added to the fund for the free tuition program at the Community College of Rhode Island to support the second year of the program and increase enrollment.

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ECONOMIC DEVELOPMENT

The budget would continue economic development incentives started under the Raimondo administration and make some more accessible to small businesses. About $3 million in new funding would be available to give loans, grants and tax credits to small businesses. The fund for tax credits for real estate development, one of the larger programs, is slated to get another $15.5 million.

Raimondo wants to add $1.6 million to a fellowship that helps graduates in the science, technology, engineering and math fields with student loan debt, and invest another $500,000 in a fund to help bring more routes to the state’s main airport.

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