Update: RI running short on cash, borrowing from TDI unlikely
5:23 PM Tue, Jul 28, 2009 | Permalink
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PROVIDENCE, R.I. -- The state may not have to dip into its temporary disability insurance fund after all to pay its end-of-the-month bills, including a promised school-aid payment to the cities and towns. Last week, Governor Carcieri put legislative leaders on notice that the state was almost out of money, and would need to once again borrow money -- up to $50 million -- from the $90.4 short-term disability fund financed by mandatory payroll contributions by private sector workers across the state. Workers pay 1.5 percent of their first $56,000 in compensation. In his July 22 letter to key lawmakers, Carcieri wrote: "All cash in the General Fund, including the payroll clearing account, has been or is about to be exhausted. The anticipated cash expenditures exceed the anticipated cash available... Our projections indicate that a transfer from the Temporary Disability Fund for the remainder of the fiscal quarter ending Sept. 30, 2009 would be warranted.'' The letter went to House Speaker William J. Murphy and Senate President M. Teresa Paiva Weed, among others. As of Tuesday morning, there was only $90,223,279.47 left in the state's General Fund, with $113 million in payments "going out at the end of the month, including $88 million in local aid,'' according to reports from state treasurer's office and budget officer Rosemary Gallogly. By mid-day, however, state Treasurer Frank Caprio's chief of staff Mark Dingley was issuing assurances the state would be able to pay all of its bills, without any interim borrowing, between now and mid-August, when the state plans to go to the money market to raise $350 million from the sale of tax-anticipation notes. The state is going to the market early this year to take advantage of favorable interest rates, Dingley said. In a joint telephone interview, both Dingley and Gallogly said the governor put the lawmakers on notice of the potential need to borrow from the TDI fund, because advance notice is required, and doing so gave him one more tool in the event the market sours or the state finds itself in an even tighter bind than it is in now. But Dingley said that was never the preferred route, because the state is required to repay any money borrowed from the TDI fund with interest equal to what it would have earned had it been invested, while TANs are sold at 11-month rates that state officials hope and assume will be lower. Added Caprio is a statement from his office: "TANs are used to cover operating costs in the state budget through the fall and winter months, until the larger corporate and individual tax collections arrive in the spring... In the past, we have been very successful in offering these bonds and they have proved popular with both local retail and the larger institutional investors.'' Caprio noted that the $350 million in TANs the state sold last year, at a rate of 2.2 percent, were repaid in full with interest on June 30, 2009. "The expected rate in August will be less than 1 percent, subject to market fluctuation, saving the state substantial interest expense," he said, noting the requirement that they too be repaid in full by the end of the current budget year. But the money-in, money-out balance will be very close. After paying all of its end-of-month bills, the state will begin the first Monday in August with little more than $1 million in its General Fund, and more specifically a projected $1,582,874. By the next day, however, the balance is likely to grow to $6.264.962, and each day after, by more, Dingley said. -- The Providence Journal has been following this story today as it develops. Our initial report was published at 12:30 p.m. 
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Is anything sacred anymore? Again, to feed the unions the TDI money is being raided. Maybe the sky is falling after all. I know, shut up and pay.
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Maybe if the crooks in Providence and the state and municipal unions didn't steal $100 million a year, we would have some extra money.
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Yes, let us raid TDI rather than layoff political hacks in no show or ocassional show jobs.
Quick way to balance the budget: Fire everyone whose job title includes the terms vice-, assistant, associate, acting, or temporary.
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municipal unions didn't steal $100 million a year..........pat get a grip,maybe if the gov.didn't hire all his friend with pay checks over 100plus.his wife niece at 60000 etc....worst gov ever.
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jay, denial is the first sign
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Dave said "jay, denial is the first sign"
Right on, Dave. I agree 100%.
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I agree with Jay-- this governor is horrible. A couple of years ago my niece got a State job thanks to her then boyfriend who was a State rep. It was a sweet position. But once this governor got into office my niece faced immense pressure to show up and do her job. She was even subject to supervision, like she was some private sector dope. This is outrageous. Patronage was never this way in the good old days. What's the point of a state job if you're expected to actually work?
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rhode island has a great governor its the general assembly that is horrible.every single state job opening the ga or the union heads decide who gets the job.this is one of many reasons why this state is so corrupt.take the power to hire away from the ga and the unions.create a personnel board independent of the ga and let them hire people.we got at least 5000 more state workers then we need lay them off.
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Sometimes these responses are so far off base I both laugh and cry at the stupidity. UNIONS have nothing to do with the State have a cash shortage at the 4th week of the new fiscal year. The Governor's appointed Directors run the State departments. " The anticipated cash expenditures exceed the anticipated cash available... "
The Directors and the Governor are on the hook for this. NOBODY ELSE !
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Im ashamned of all these democratic no good bums
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When are you people going to realize this IS NOT the Governors fault. It is the General Assembly's . You know the idiots you all voted for last November who could care less about you. The only debt they pay is to the Unions who support them and we provide the cash. The sooner the uniformed idiot voters get that then maybe change can happen, until then assume the position.
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Let's close the doors, turn off the lights and all go home.
The state is officially broke. Turn the keys over to the Feds and let them figure it all out. The dumb bells in the General Assembly are not capable of doing it.
It will only get more interesting as the fall comes around. They will be really sucking air then.
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You people keep voting in these immoral morons
notice Pavia Weed again she definitally has to go
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sgrant52,
The unions/state workers drain the state coffers of cash with their outrageous benefits packages/retire way early plans.
They're making the state unaffordable for decent ordinary people who have to pay the taxes to support this greedy feeding at the trough.
I have cousins who live like the idle rich in their middle age because they're retired state workers, meanwhile I can barely afford to keep a roof over my head with the astronomical property taxes. I guess I sure made a bad decision years ago, taking a job where I actually worked for a living.
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The buffoons in the General Assembly are to blame for the mess this state is in. Everything the governor tries to do, the idiots are negating. We must toss out all incumbents in the next election. It's a shame that the thinking voter has computers and researches issues, and the majority of people who vote those idiots in can be bought with clam cakes and chowder or coffee and donuts.
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The pension fund is flush; why not borrow from there? Or is that a sacred cow?
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If the TDI fund has so much money to borrow from, Why have they been sitting on the papers from my QHCP for 3 weeks instead of just paying so I can maybe buy some groceries...
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