PROVIDENCE, R.I. — Gov. Gina Raimondo seeks to legalize sports gambling and expand Rhode Island’s medical marijuana program as part of a plan to balance a $9.38-billion state budget proposed Thursday, a plan that would raise expenditures by $135 million, or 1.5 percent, compared with the previous 12 months.
PROVIDENCE, R.I. — Gov. Gina Raimondo seeks to legalize sports gambling in Rhode Island and add up to a dozen new medical marijuana dispensaries to help plug holes in a $9.38-billion state budget she proposed Thursday.
The tax and spending plan for the year starting July 1 would raise expenditures by $135 million, or 1.5 percent, compared with the previous 12 months.
Big-ticket items include $20 million for the next scheduled phase of car tax elimination, $6.4 million for Raimondo's tuition-free community college program and a request for voters to approve borrowing $250 million for public-school building repairs.
"Our public school buildings are crumbling," Raimondo wrote in an introductory letter. "My budget includes a bold plan to make a generational investment in our school facilities."
The budget attacks $260 million in projected deficits this year and next with a combination of social service spending cuts, one-time transfers, an expansion of the sales tax, new and higher fees, more aggressive tax collections, gambling and marijuana sales.
Medicaid cuts play a huge role in Raimondo’s deficit-aversion plan. She is banking on an overall $165.6 million in savings in the ever-growing cost of the government low-income health insurance program that covers roughly a third of the state's residents.
That would include new co-pays ranging from $2.50 for a generic-drug prescription to $8 for a “non-emergency” visit to an emergency room. The thinking: that co-pays ”help eliminate unnecessary overuse of Medicaid services,’’ according to a budget summary provided by the administration that noted that 24 other states, including Massachusetts, require co-pays by their Medicaid enrollees.
And it would eliminate a 1.5-percent “guaranteed profit-margin’’ for managed-care organizations that take Medicaid patients: Neighborhood Health Plan of Rhode Island, Tufts Health Plan, and UnitedHealthcare Community Plan.
The budget books $23.5 million in new state revenue by allowing people to place bets on collegiate and professional athletic competitions at Twin River’s state-operated casinos — under the assumption that a pending U.S. Supreme Court decision legalizes the practice nationally. (Bets would not be allowed on any college games in Rhode Island or involving a Rhode Island school.)
Administration officials on Thursday said the move would protect Rhode Island gambling revenue as states across the country look to expand sports betting. Connecticut is one of four states that have passed laws allowing sports betting pending the Supreme Court decision, and Massachusetts is expected to do the same, they said.
The Rhode Island constitution requires voter approval to introduce new types of gambling to the state, but companion legislation introduced by Senate President Dominick Ruggerio Thursday says previously approved ballot measures would allow sports betting as long as it takes place at Twin River's Lincoln or proposed Tiverton casino.
Internet sports wagering, on the state's radar, but not included in the current plan, would require another referendum, Deputy Chief of Staff Kevin Gallagher said in a budget briefing.
Twin River’s new casino in Tiverton is scheduled to be open by the proposed Oct. 1 sports betting launch date, but due to past delays the gaming company has agreed to pay the state $2 million in compensation, Twin River spokeswoman Patti Doyle said.
Diving even further into the casino world, the budget proposes allowing so-called “stadium gaming,” which involves multiple players competing in front of large video screens, at Twin River’s casinos bringing the state an additional $4.1 million in state revenue.
In her latest bid to overhaul the state's medical marijuana rules, Raimondo proposes allowing up to a dozen new dispensaries on top of the three "compassion centers" open now. The medical cannabis rules, which include allowing Massachusetts and Connecticut cardholders to buy in Rhode Island and letting people with "acute pain" get a card, are projected to raise $5.1 million in new revenue.
Ruggerio said he was encouraged by most of the budget, but had some concerns about the dispensary expansion and amount of one-time revenue used to balance the budget.
House Speaker Nicholas Mattiello said he was happy to see the car-tax phaseout continued, but expressed unease that the budget relies on more than $50 million from decisions outside Rhode Island’s control, including the Supreme Court gambling case and Congressional reauthorization of the lapsed Children's Health Insurance Program.
"I think they should have included an alternative if, in fact, those law changes do not occur,” Mattiello said.
Despite the months-long effort to close the budget gap and ongoing state employee retirement incentive plan, the state will be hiring in this election year.
The budget boosts the number of authorized full-time state employees to 15,426 by adding 266 workers, among them, new corrections officers, state police recruits, DMV clerks and highway maintenance laborers.
Raimondo aides highlighted the fact that the budget doesn't raise any “broad-based taxes,” but certain people and industries will pay more.
Smokers would see a 25-cent hike in the cigarette tax, to $4.50 per pack. After a 50-cent increase last year, the new hike would give Rhode Island the highest state cigarette tax in the country, Paul Dion, chief of the office of revenue analysis, said.
The Department of Revenue estimates it can collect an additional $13.5 million by hiring more tax agents and creating a new collections bureau.
And Raimondo plans to extend the sales tax to armored car services and “software-as-a-service” products such as GoToMeeting, Office365 or SalesForce.com. The armored car tax is expected to bring in $9.7 million and software tax $4.4 million.
On the other hand, Raimondo decided not to extend the sales tax to streaming services such as Netflix or Spotify.
And some businesses with soft-serve ice cream machines would save a combined $80,000 from elimination of the $160 retail frozen dessert processor fee.
The budget "scoops" $18.6 million from five quasi-state agencies: Rhode Island Housing, $5 million; the Rhode Island Infrastructure Bank, $5 million; Rhode Island Student Loan Authority, $3 million; Rhode Island Resource Recovery Corporation, $3 million; and the Rhode Island Turnpike and Bridge Authority, $1.5 million.
It also diverts to the general fund $10.3 million in DMV registration fees slated to go to road repair.
Highway maintenance will get new money from another source, however, with the soon-to-launch truck-only toll network providing $4 million in the current year and $41 million in the year starting in July.
The $250-million bond for public school repair is one of four that Raimondo proposes asking voters to OK on the November ballot.
The others are the $45 million for work at the University of Rhode Island’s Bay Campus in Narragansett; $25 million for Rhode Island College’s Horace Mann Hall; and $48.5 million for a “Green Economy and Clean Water” bond.
— panderson@providencejournal.com
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On Twitter: @PatrickAnderso_
— kgregg@providencejournal.com
(401) 277-7078
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