Gov. Bruce G. Sundlun late Thursday signed into law a $1.4 billion balanced budget for Rhode Island's fiscal year 1993 that officials say provides for most existing services and will raise state revenues through a tax increase on the wealthy and a lottery.
Since June 30, the end of fiscal year 1992, the state has been operating on funds provided through emergency legislation.
One budget program that has raised the ire of Rhode Island's wealthy is a tax increase on married couples collectively making over $100,000. The measure will increase the amount after federal taxes that those in the upper tax bracket will pay to the state.
Michael O'Keefe, state budget officer, said the tax increase is designed to raise $16.8 million for this fiscal year and at least that for the next two years.
The state will take in additional moneys from the creation of a video lottery poker program that should generate more than $17 million this year and $22 million in subsequent fiscal years.
The budget is not without some deep reductions in spending.
Mr. O'Keefe said that changes in the way the state will fund mental health and human services programs will save the state $83 million this year.
Since the late 1960s, the state has provided funding through the human services departments and allowed additional dollars to go to state hospitals through Medicaid payments. The new program will make it easier to enforce tight spending controls.
"We were able to avoid the continuation of programs that only encouraged overspending and double-dipping into state medical pools," Mr. O'Keefe said.
One facet of the 1993 budget Gov. Sundlun was intent on maintaining was the state's reserve fund.
"We were able to leave 0.5% of the total budget outlay in a reserve fund that will build 0.5% each year until it reaches 3%," Mr. O'Keefe said. "After that, we will be able to create a capital programs fund and borrow from that."
Mr. O'Keefe said the state is planning $125 million of general obligation borrowing this fiscal year and $100 million in fiscal year 1994.
Senate majority leader John J. Bevilacqua, D-Providence, said budget passage was slowed, in part, by the Cross Bay Pipeline project controversy.
After more than $8 million of debt was approved by the voters in the late 1980s to fund the project, the Rhode Island Environmental Protection Agency voiced concerns about the project to the governor.
Gov. Sundlun told the legislature he would veto the entire budget if the environmental concerns were not addressed. Sen. Bevilacqua reported that those funds originally budgeted for the Cross Bay Pipeline will now be used to improved the existing water transfer system.