RI Gov. Might Scale Back Free Tuition Plan
Revenue Shortfall Complicates Budget Negotiations
A larger-than-expected revenue shortfall disclosed by state fiscal officials has complicated final negotiations between the Democratic governor and state legislators writing the budget for the fiscal year that begins in July.
Raimondo said she is willing to reduce the costs of her signature proposal, citing a “short-term revenue problem” and broader uncertainty surrounding the policies of Republican President Donald Trump.
“We have to be careful in general right now about getting over our skis on any new expenditures that are very large,” she told reporters. “I don’t know where Trump’s going to come out on the Affordable Care Act. I don’t know what’s going to happen with federal tax policy.”
“It is a period of uncertainty,” she added. “I need to protect Rhode Island. I need to protect the progress we’ve made. Our economic recovery is strong. We need to keep it going.”
Raimondo said she still wants to include some element of the tuition plan in the upcoming roughly $9 billion budget that legislators are expected to finish writing in the next month. She said boosting higher education is important in the long-term for the state’s population to adapt to a changing economy where good jobs require high skills.
But she said she would consider modifications, such as a means test limiting the benefit to families who need it most.
Her original proposal would provide in-state students with a full two years of free tuition at the Community College of Rhode Island or the final two years of a four-year degree at Rhode Island College or the University of Rhode Island. New York has since enacted a similar law, but with an income cap excluding wealthier families and a requirement that beneficiaries stay in New York for several years after graduation.
Raimondo’s plan has been lauded by business leaders and young people, including college-bound high school students. But the estimated $30 million-a-year proposal has received a lukewarm response from leaders of the Democratic-controlled legislature who have competing priorities. Further complicating the budget debate, fiscal officials concluded last week that tax revenue is expected to be nearly $100 million less than they had projected in the fall.
The lagging revenues also call into question Democratic House Speaker Nicholas Mattiello’s costly plan to phase out municipal car taxes. Raimondo, who has a more modest plan to cut the taxes, said she’s waiting to see Mattiello’s latest proposal. She said balancing the budget may also require some cuts to social services, but she said leaders can find a way to fill the gap without going backward.
“We’re 1 percent off,” she said. “This isn’t, ‘The sky is falling.’” Raimondo said many states are experiencing revenue shortfalls, and Rhode Island is in a better situation than several New England neighbors.
Massachusetts has a strong economy and high-wage jobs and “their revenue shortfall’s just over 3 percent compared to our 1 percent,” she said.