The Rhode Island Senate plans to vote on a $7.7 billion spending blueprint for state government on Wednesday — just two days before the new budget would take effect.
The proposal includes new taxes on non-prescription drugs, sightseeing tours, smartphone applications and videogame and software downloads. It also would require some families on Medicaid to pay higher monthly premiums.
Those adjustments — along with more than $100 million in spending cuts — would eliminate an estimated $186 million budget deficit.
The House easily passed the budget proposal Saturday. Senators who reviewed the legislation Monday called it a practical response to tough fiscal times.
“This budget puts us on the right path to the serious structural reform we need,” said Sen. Daniel DaPonte, D-East Providence and the chairman of the Senate Finance Committee.
In an attempt to save money in future years, the budget also would halt new school construction for three years and end automatic raises for state workers based on years of service.
It eschews a much more ambitious tax expansion that Gov. Lincoln Chafee recommended in March. Chafee, an independent, suggested lowering the state sales tax from 7 to 6 percent and imposing it on a long list of now untaxed goods and services.
Instead, the House lawmakers who wrote the proposal relied on many more spending cuts to eliminate the deficit. They suggested a much leaner tax expansion that would add a 7 percent sales tax to the purchase of over-the-counter drugs, some Internet downloads and sightseeing tours.
The decision to favor spending cuts over tax increases pleased several senators. “That was a tremendous accomplishment,” said Sen. Walter Felag, D-Warren.
The Medicaid changes would increase monthly premiums for families whose income places them above the poverty line. A family of four living on an income of $33,000 would see their monthly Medicaid premium rise from $61 to $91.
The budget increases funding for public schools by $17 million and adds $4 million in funding for state institutions of higher education.
During its debate on the budget, the House added a voter referendum that would ask voters in 2012 to approve table games at the Twin River slot parlor in Lincoln.
Lawmakers hope to recess for the summer this week. They’ll return to the State House in the fall to consider ways to reform the state’s public pension system.