Projo Politics Blog

PROVIDENCE, R.I. -- It's no secret that the Carcieri administration tracks tax revenue collections -- the state's primary source of income -- each month. But we can't recall any time in recent years that the governor's office issued a news release to announce its monthly numbers, especially when those numbers aren't especially unusual.

As of the end of March, revenue collections were down half of 1 percent, or $10.5 million, compared to budget officials projections of last November, according to the administration's announcement that reflects a heightened sensitivity to the state's finances.

The $10.5 million drop is hardly shocking news, given that the state will collect more than $2 billion this year, according to John Simmons, executive director of the Rhode Island Public Expenditure Council.

"It's a picture that isn't terrible, but it's not the best one either," Simmons said. "The question is whether it's a trend or not."

The Carcieri administration's revenue guru, Department of Administration director Gary Sasse [who was replaced by Simmons after leaving RIPEC], agrees with Simmons' assessment that this isn't especially a big deal.

"Despite the economic volatility, the decline in actual revenues is less than one percent from that of the revised estimates," Sasse said in the governor's announcement.

More interesting, Sasse said, will be next month's revenue report, which will reflect the the bulk of income tax payments, Rhode Island government's single largest revenue source.

The House fiscal office issued a separate report today suggesting that revenues were down by $13.8 million, just a bit more than the governor's analysis.

House fiscal adviser Michael O'Keefe was slightly more concerned about the data: "The trend in not a positive one," he wrote in his report.

"Both tax revenues and total revenues show a declining trend from estimates,'' O'Keefe continued. "Total revenues have gone from $31.3 million ahead of estimates in November ... to $13.8 million behind through March.''

Today's news could have been worse. But Simmons said not to get too comfortable: "The expectation is in the next three months, you're going to have a real fall-off in revenues," he said.

That means that budget deficits, already estimated at $357 million for the rest of this year and $450 million for the next, will likely grow considerably, putting heightened pressure on lawmakers to cut costs or raise taxes and fees.

 Tags  budget deficit Providence RI revenue

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