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General Assembly
The State House remains closed to the public at this time. Three Senate Committees are meeting to hold advice and consent hearings for Acting Director Brett Smiley (Thursday, Senate Finance Committee) and Acting Director Kathryn Power (Wednesday, Senate Health and Human Services) as well as some board and commission appointments of the Governor. The Senate Health and Human Services Committee will also hold a hearing on Wednesday at 4:00 p.m. The public will not be permitted to attend. Testimony can be submitted by email. Senate Bill No. 2525 BY Miller, Goldin, Valverde, Satchell, Goodwin ENTITLED, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE RHODE ISLAND HEALTH CARE REFORM ACT OF 2004--HEALTH INSURANCE OVERSIGHT {LC4557/1} (This act would have the health insurance commissioner adopt a uniform set of medical criteria for prior authorization and create required form to be used by a health insurer.) Testimony can be submitted at: SLegislation@rilegislature.gov Division of Taxation Extends Tax Filing Deadlines The RI Division of Taxation announced an extension for certain tax filing deadlines and payments including estimated tax payments, corporate taxes, bank excise taxes and public service corporation taxes. A complete list of filing deadline changes can be found at http://www.tax.ri.gov/Advisory/ADV_2020_11.pdf House Finance Committee Receives 3rd Quarter Update The House Finance Committee met May 20th. Just like the previous week, there was no public testimony at the hearing. The fiscal staff provided an overview of the May 3rd Quarter report. In many ways, more questions were raised than answered. A few new issues arose added roughly $50 million in unaccounted expenditures for the current fiscal year budget and the next budget, bringing the total budget gap to about $900 million for the two-year period. What are the new issues? The biggest one involves the Eleanor Slater Hospital. Between August of 2019, and February 11, 2020, The Hospital was unable to bill Medicare and Medicaid for its patients due to its non-compliance with federal law. The law prohibits state hospitals from having more than 50% of its patients in psychiatric beds. The noncompliance was discovered by the hospital administration and the decision was made to cease billing Medicare and Medicaid until the situation was resolved. Additionally, the hospital had about 100 “forensic” patients which is the term used for individuals sent to the hospital by the courts to undergo psychiatric evaluations to determine ability to stand trial. Medicaid does not pay for forensic patient services. Together these items increased the current fiscal year expenditures by about $35 million. The impact to FY2021 is difficult to estimate but is believed to be at least $30 million. One question that BHDDH could not able to answer was how much the Department will need to spend in order to ensure the hospital does not run afoul of the federal law again. The new Acting Director, Kathryn Power, suggested that the ongoing effort to comply would be handled in house, but then later stated that the agency was in the process of hiring a consultant firm to assist. The Third Quarter Report did reveal some savings for the current fiscal year: $7.9 million between the Department of Administration, Department of Revenue and Department of Business Regulations – mostly from turnover employment, but some in operating savings and debt service savings; DCYF saved $4.6 million through staffing efforts and some placement changes; and $600,000 was saved by not administering the Spring SAT test. Other smaller savings were realized in other agencies. Some expenses were also up. For example, DEM spent $400,000 more than budgeted for mosquito spraying to combat eastern equine encephalitis (EEE). Senate Finance Committee Asks NCSL for Insight Last Thursday, the Senate Finance Committee met to discuss the Coronavirus Relief Funding Sources, and they received insight from Congressman Cicilline and the National Council on State Legislatures (NCSL). So far, the federal government has passed four spending bills to address coronavirus issues:
As of May 18th, the Paycheck Protection Program has yielded 4,341,145 loans in the United States for a total amount of $513.27 billion. In Rhode Island, 15,857 loans were made amounting to $1.86 billion in approved dollars. Another type of loan – the Economic Injury Disaster Loan – is available to agricultural producers only. This loan has a maximum of $2 million, but applicants receive $10,000 as an advance grant just for applying for the loan. If the applicant is ultimately deemed ineligible for the loan, the $10,000 does not have to be repaid. As of May 8th, 10,758 loans were approved in Rhode Island amounting to $36.23 million in approved dollars. Following NCSL, Department of Administration Acting Director Brett Smiley provided a COVID19 update for the Committee. The big takeaway remains the unknown track that the virus will take throughout the summer and into the fall. But the Director did provide estimated expenditure ranges for past and ongoing COVID19 activity through December 30, 2020:
State Agencies Hold Carbon Tax Stakeholder Meeting As directed by the legislature last year, DEM, in conjunction with the RI Office of Energy Resources and the Department of Transportation held a virtual meeting to introduced the consultants hired to conduct a study of potential effects associated with a carbon tax or with a carbon cap and trade program (still a tax). The agencies have hired two companies – Cadmus and Synapse – to perform the work which is slated to be completed by the end of September. According to the consultants, 46 national and 31 subnational jurisdictions have implemented or scheduled carbon pricing initiatives. In the United States, the state of California has a program. 2020 charges per metric ton of carbon range from a low in Japan at $3 to a high of $123 in Sweden. California is currently at $18 per metric ton through its cap and trade program. Started in 2013, it is the broadest cap and trade program in the world – covering transportation, industry, heating and electricity generation. Roughly 85% of California’s greenhouse gas emissions are taxed. The program raised $9.3 billion so far. Emission have reduced 16%. Cadmus reported a 33.2% growth in advanced energy jobs in that state, but the consultant was unable to say whether jobs were lost in other industries. The two consultants asked for input on two models for the State of Rhode Island. The low model would start at $6 per metric ton in 2021 and increase 5% annually above the rate of inflation, with all revenues going to decarbonization programs such as electric vehicles and heat pumps in residential and commercial buildings. The high model would start at $25 per metric ton in 2021 and increase 5% annually above the rate of inflation. Some of the revenue would go back to Rhode Island residents and the remainder would go to decarbonization programs. The stakeholders participating in the meeting were asked to provide input about the specific items to be included in the models. The Chamber requested the inclusion of a cost/benefit analysis for various industry sectors – not just emerging technology businesses – in order to obtain a more complete understanding of the economic impacts of the programs.
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