Senator Caprio on Deficit, Welfare, Car Tax, and Gambling Casino(posted December 2, 2001)
Senate Finance Committee Chairman Frank Caprio, Jr. appeared on the WPRI-TV show "Newsmakers" today to discuss budget issues facing the state. Among the subjects covered included the following:
Budget Deficit-- Caprio said Rhode Island state revenues were expected to drop 1.5 percent this year from the estimated $2.5 billion that had been anticipated. The deficit for this year is expected to be around $70 million plus $100-150 million in the next fiscal year if no cuts are made this year.
Spending Reductions-- When asked where cuts might be made, Caprio said the General Assembly would have to "go where the dollars are". He pointed out that in terms of welfare expenditures, Rhode Island is an "outlier on the graph". Whereas nationally, there has been a drop of 55 percent in welfare caseloads, the drop in the Ocean State is 25-28 percent. According to the Senator, Rhode Island has much more generous welfare provisions than neighboring states. In Massachusetts and Connecticut, for example, welfare recipients exhaust their eligibility after 24 months. However, in Rhode Island, recipients can stay on welfare for 60 months, after which their benefits are reduced by just 15 percent.
Housing Assistance-- Governor Lincoln Almond has announced plans to cut $5 million in housing assistance for the poor, but Caprio said based on his conversations with fellow legislators that "there is a will to try to restore that money."
Car Tax Phase-Out-- The Senate Finance Committee chair predicted there would be some efforts to change the planned phase-out of the state's car tax. The tax cut already has cost $110 million and its costs would grow to $200 million if fully phased out. "We can only work with the revenues we have," Caprio said.
Gambling-- Caprio said the state "is in the gambling business in a heavy-duty way" due to the fact that lottery revenues have grown from $20 million to $225 million over the last decade. When asked about requests for additional video slots at Lincoln race track and Newport Jai-Alai, Caprio said "I am not going to take a position on that."
Proposed New Casino-- The Narragansett Indians have indicated they would like permission to place a casino proposal on the state ballot next year. Caprio said that they "have an uphill battle but it is one where they could get to the top of the mountain." The Finance Committee chief explained that the climate has changed since the last time a casino proposition unsuccessfully was put on the ballot in 1994. If there was a casino located in Rhode Island, he said "it may end up being very successful" and not draining revenues from the state lottery.
