This year, though, the dynamics seem different.
There’s a better than even chance that the Democratic-controlled legislature will not reverse at least some of the Republican governor’s budget cuts, as they have in previous years.
To some observers, this means more than a re-jiggering of programs. What’s really at stake, they say, is Rhode Island’s historic approach to solving wrenching social problems, especially those involving children.
“This may be the year in which we see real erosion of the liberal-progressive model that always has been a hallmark of Rhode Island,” says Maureen F. Moakley, chairwoman of the political science department at the University of Rhode Island. (In Rhode Island Politics and Government [University of Nebraska Press, 2001], a definitive book on state government, Moakley quotes a former legislative leader as pledging not to take money away from poor children.)
“If these cuts go through, Rhode Island will be a less progressive state than in the past,” agrees Darrell M. West, a Brown University political scientist who closely watches state politics and oversees a Rhode Island opinion poll. “Rhode Island has been a leader in protecting children, and these changes will make it more difficult for Rhode Island to be in that position.”
As in the past, there’s a muscular and political savvy coalition of progressive groups fighting many of the proposed cuts.
Robert A. Walsh Jr., executive director for the National Education Association- Rhode Island, a teachers’ union, who also serves as spokesman for the labor confederation Working Rhode Island, says it’s still too early to tell how the legislature will respond. “I can’t imagine these programs aren’t coming back,” Walsh said of the DCYF programs. “I just can’t conceive of the General Assembly allowing them to be destroyed.”
But what Moakley, West, and others say is that many cuts may indeed take place with the forthcoming budget. So in addition to impacting thousands of lives, this could be the year that signals a major shift in state politics and in the underlying principles that shape them.
The hidden bite of tax cuts
Past budget battles have had a storybook quality to them. They begin when a Mean Governor threatens programs for the Littlest State’s children. The kids and their friends go to the Marble Palace to plead for help from kindly but overwhelmed senators and representatives. Just when things look hopeless, the Good Budget Fairy flies in. With the wave of her felt-tipped pen, she corrects overly pessimistic revenue forecasts; drops bouquets of federal grants; or, with a puff of smoke, produces millions of unexpected tobacco dollars.
But this year, according to economists, government analysts, and other State House watchers, there’s a new character — the Monster Structural Deficit.
In this new version, Rhode Island is faced with not one, but a continuing series of annual shortfalls, producing automatic deficits that get bigger every year.
Even before Carcieri administration budget-writers began drafting the new spending plan, it was $243 million in the hole. A year ahead, the forecasted deficit jumps to almost $380, sprinting to $450 million in the year 2012.
One way to gauge the magnitude of these projected deficits is to compare them to state revenues. The 2008 structural deficit is equivalent to seven percent of state revenues; the one in five years is 12 percent.
One reason, obviously, is that the cost of government is going up. In many cases, it’s rising faster than growth in the Rhode Island economy can put more money into the state hopper.
But the other reason — and this gets far less attention — is that a series of tax cuts, going back 10 or more years, mean that the state treasury has been collecting less money than would have been the case had the tax cuts not been enacted.
By some estimates, the total of these tax cuts is larger than the deficits. The liberal Poverty Institute at Rhode Island College’s School of Social Work outlines the cumulative impact this way: