Rhode Island Announces 12 “Official Shutdown Days” in Attempt to Save Money, Close Budget Gap

~~By InsightAnalytical-GRL

States are suffering budgets problems these days, including New Mexico which is now in the process of cutting expenses. Locally, our school district is cutting, too.

Well, the state of Rhode Island has gone one step further.  Press relese from the Office of the Governor:

Governor Carcieri Announces Plan to Achieve $67.8 Million in FY 2010 Budget Savings

Governor Announces 12 Shutdown Days, Operating Efficiencies, Reduction in Local Aid

Governor Donald L. Carcieri today announced his plan to achieve the $67.8 million in unspecified savings in the FY 2010 budget passed by the General Assembly. The plan calls for 12 shutdown days of state government, operational savings, and withholding the 4th quarter of the vehicle excise tax from cities and towns.

“Over the past several years, framed by two recessions, the state has faced difficult budgets, resulting in nearly one billion in lost revenue over the past two years,” said Governor Donald L. Carcieri. “We have managed through this crisis with reductions in state spending, improved operating efficiencies, and without raising broad-based taxes. We have achieved equally significant savings through changes to our healthcare plan, major pension reform, a massive reduction in state employment levels, changes to social service programs, and some cuts to local aid.”

“Even with these efforts, we are faced with more daunting challenges,” continued Carcieri. “The state’s FY 2010 Budget requires my Administration to find $68.7 million in unspecified savings. With most efficiencies already attained, and staffing reductions already made, there are few options left to cut costs.”

“My Administration has developed a plan to reach the $68 million total, through a combination of shutdown days, operating efficiencies and cuts, and a reduction in local aid by withholding the 4th quarter vehicle tax payment.”

Shutdown Days

The Administration has identified 12 days in which state government will be shut down. The following days are designated as official shutdown days:

Friday, 9/4/09 Friday, 10/9/09 Friday, 10/30/09 Friday, 11/27/09 Thursday, 12/24/09 Friday, 1/15/10 Monday, 2/15/10 Friday, 3/12/10 Friday, 4/2/10 Friday, 4/23/10 Friday, 5/28/10 Friday, 6/11/10

The anticipated general revenue savings achieved from each shutdown day is approximately $1.4 million, $17.3 million in total savings for all twelve. In addition, the Higher Education system will achieve $4.3 million in general revenue savings in a manner consistent with the delivery of student services over the school year. A state employee who stays home on all 12 shutdown days, will take home about 4.6 percent less.

This brings the total savings to $21.6 million. These savings assume the cooperation and participation of all branches of government. “We are very well aware of the impact shutdown days will have on state employees and state services. For Rhode Islanders there will be inconveniences; for state employees there is sacrifice. I am asking everyone’s patience, understanding, and awareness that these steps are unavoidable if the State is to live within its means,” continued Carcieri.

The State has met with union officials for the past several weeks in hopes of reaching a consensual agreement to achieve the savings through pay reduction days, similar to the one day pay reduction implemented last fiscal year, rather than shutdown days. Pay reduction days would achieve greater saving days and afford the Administration more flexibility, while providing employees with an additional personal day to be taken at a later date.

While the Administration will continue to negotiate with labor and remains hopeful that an agreement can be reached, each day that passes puts at risk the ability for the state to achieve the necessary savings. “I look forward to working with the various unions to address this situation in another way, but we simply cannot wait any longer to act,” said Carcieri.

Operational Savings

The Department of Administration (DOA) has identified approximately $17.1 million in savings from several areas, including $5.2 million from reducing consultant contracts by 10 percent, and limiting or eliminating seminars, conference and training for state employees.

DOA has identified an additional $8.9 million from a heightened level of scrutiny on all non essential expenditures, including out of state travel, fees and subscriptions, printing, advertising and other departmental expenses. In addition, DOA expects the state to gain $3 million in health insurance savings.

Authority to Withhold Appropriations

“Even with the shutdown days, and the operating efficiencies, we are still far short of the $68 million we need,” continued Carcieri. “I intend to submit legislation for immediate consideration when the General Assembly returns in September that will grant me the authority to withhold appropriations. In these extraordinary times, I need the flexibility to withhold appropriations to properly manage the execution of the budget.”

Previous Governors have had the statutory authority to withhold appropriations. This power was stripped by the General Assembly in 1996.

Of the state general funds – approximately $3.1 billion – one billion of these state funds goes to our cities and towns. This is on top of local property tax and other taxes collected by municipalities – nearly $2 billion. The Governor intends seek authority to withhold the 4th quarter motor vehicle tax payment to cities and towns. This amounts to approximately $32.5 million.

“We cannot continue to funnel money to the cities and towns without their participation in the state’s budget conversation,” said Carcieri.

“While this plan will achieve the $68 million in the FY 2010 budget, we are not out of the woods yet. Since May, we have seen revenues continue to deteriorate. By the first of September, we will close the books on FY 09, and at first blush, revenues are expected to be off by an estimated $65 million dollars in May and June. The significant savings we have realized by this plan are being outpaced by decreasing state revenues, revenues that rely on everyday economic activity,” continued Carcieri.

Online: http://www.governor.ri.gov

Release date: 08-24-2009

Many, MANY moons ago, the State of New Jersey shut down for a day or two, but not for 12 days.

Many, many, MANY moons ago my family would spend a couple of weeks on the yet undiscovered Block Island in a house of a friend who was restoring it room by room.  She called it “Turnabout Cottage” …Let’s hope we can see some “turning about” of all the mounting problems from our financial turmoil.

I don’t see it happening anytime soon, so who knows how many states will start shutting down. And let’s hope essential services to those who need them won’t be at the top of the list for further cutting. Here in New Mexico, witih a large population of poor,  healthcare for those on Medicaid has already taken a hit…