12:51 PM EST on Thursday, January 26, 2006

BY KATHERINE GREGG, SCOTT MAYEROWITZ and ELIZABETH GUDRAIS
Journal State House Bureau

PROVIDENCE -- With House Democratic leaders expected to mount a major push for tax cuts, Republican Governor Carcieri last night told Rhode Islanders: no tax cuts unless we "control government spending."

In his last State of the State address before what is likely to be a rancorous election year, Carcieri promised to reduce the state's middle-management ranks, "reform" its "massive" welfare system and seek new constitutional caps on year-to-year increases in state and local spending.

Bemoaning the below-par performance of the state's urban schools, he proposed a longer school day for students, a longer school year for teachers, and combining Providence, Central Falls and Pawtucket into a "single metropolitan school district."

Carcieri said he will also seek to reduce the 5.5-percent ceiling on year-to-year spending increases at city and town levels.

"We all know that Rhode Islanders need more tax relief," he said. "But to do that, we must reduce the growth rate of government spending."

A small coterie of Republicans clapped and cheered often; the Democrats, less often. The only standing ovation followed his mention of the "huge heroes from a small state" who went to Mississippi and New Orleans to help restore order after Hurricane Katrina.

On the one hand, the 63-year-old, first-term governor painted a rosy picture of what has happened in Rhode Island during the first three years of his stewardship.

In a booming voice, he said: "Jobs are growing. Investment is booming. Incomes are rising. Tax relief is beginning. Educational results are improving. Parks and open spaces are increasing. Narragansett Bay is getting cleaner and our state's credit rating was upgraded to AA.

"The state of the state is vibrant and dynamic," said Carcieri, making what sounded to many like his case for reelection. Before leaving the podium, he and his wife, Sue, led the lawmakers in a rousing rendition of "God Bless America," that elicited a closing round of applause -- and a few smirks.

Switching gears, he talked about what continues to ail Rhode Island, including the state of its urban schools.

Carcieri said teachers can't solve the problems alone: "A strong two-parent family, actively engaged in their children's education, is a virtual guarantee of results. Less time in front of a TV and more time reading. That works!"

But he also cited Hope High School as an evolving success story that proves: "The state has a responsibility to step in when schools continue to fail."

He promised to create a panel of "community leaders to develop a plan" to put Providence, Pawtucket and Central Falls into a single school district.

The change would need voter approval in all three communities. In 1988, Pawtucket voters rejected and Central Falls voters approved a proposed merger of the two districts.

Carcieri anticipated the tri-city school district "would produce significant efficiencies in administration, transportation, standardized curriculum and infrastructure." He did not elaborate.

A concerned Majority Leader Gordon D. Fox, D-Providence, said Carcieri is proposing to join "three of the poorest communities" with a high number of students who speak English as a second language.

"That's a model that, right off the bat, draws questions about are you just taking the most difficult kids and warehousing them," Fox said. "And we all know segregation was outlawed in the 1950s."

The response from Carcieri aide Jeff Neal: "It is disappointing that the majority leader would condemn the governor's idea before even having a chance to discuss it. The governor is simply proposing an effort to help students in some of our most underperforming schools."

Carcieri also proposed "pilot projects to improve student performance by extending the school day, expanding the teacher year for additional training, re-evaluating middle schools and increasing the number of public charter schools."

A top aide said Carcieri believes the state should extend the school year to 190 days, over a five-year period. The current school year ranges from 180 days in Tiverton to 187 days in Barrington and Woonsocket.

Carcieri is proposing to share $150,000 in new grants among communities interested in studying the pros and cons of an 8 a.m. to 5 p.m. school day.

He will also ask the lawmakers, again, to lift the moratorium on the creation of any new publicly financed charter schools, but this time only in communities with at least 9,000 students: Providence, Pawtucket, Cranston and Warwick.

Carcieri did not rule out any new spending in the fiscal year that begins July 1.

He promised, for example, to back the University of Rhode Island's bid for voter approval to spend $140 million on three new buildings for its pharmacy, chemistry and nursing-school programs.

But his pledge to "reform" the state's "massive human-service entitlement programs" set off immediate alarm bells.

Details will come in his budget proposal to lawmakers. But he hinted at plans to reduce the time someone can remain on welfare in Rhode Island.

Carcieri is also looking to reduce the number of parents eligible for state-subsidized health care through the RIte Care program. Currently, parents earning up to 185 percent of the federal poverty line -- $29,767 for a family of three -- are eligible.

"We will put more Rhode Islanders to work faster, encourage self-sufficiency and promote healthier choices," Carcieri said.

The backdrop: Rhode Island allows people to stay on public assistance for up to 60 months, the maximum allowed by the federal government. Many states allow less.

Rhode Island families spent, on average, 38 1/2 months on welfare three years ago, according to the U.S. Department of Health and Human Services. But, no other state kept families on assistance that long, according to data provided by the Carcieri administration.

In the last decade, there has been a dramatic drop-off in the number of people on welfare here -- from 63,000 in 1994 to 31,000 in 2004 -- but that 51-percent decline pales in comparison to 70- and 80-percent drops in other states.

With the state facing a potential $220-million to $240-million revenue-spending gap next year, Carcieri said: "The growth rate of these programs is not sustainable."

Initial reactions were a mix of anger and fear, with Ocean State Action director Marti Rosenberg denouncing Carcieri's comments about two-parent families as a "gratuitous slap" at single parents. "I was insulted. I was insulted on behalf of any single parent who's working hard, making sure their kids learn in school, don't watch television, read books."

Questioning Carcieri's priorities, she asked: "Are you going to have a decent investment in the lives of Rhode Islanders, or are you going to make the cuts that will starve the people at the bottom? When the cuts happen, the people who get harmed are the most vulnerable Rhode Islanders."

Carcieri also raised the specter of another heated battle with the state-employee unions over unspecified "reforms" to the state's personnel system, which provides automatic salary increases for longevity and almost inviolate job-protection for employees with 20-year status.

Acknowledging he would need the Democrat-controlled General Assembly's acquiescence, he said: "We will reduce the number of middle managers in state government and run our operations more efficiently," but "to do that, I will need your help."

With respect to tax cuts, he said: "To keep our children here and to attract the businesses to employ them, we need to reduce our tax burden . . . I am committed to working with you to create long-term systemic tax relief."

But "to lower taxes, we must control government spending," said Carcieri, calling for new spending restraints at the state and local level.

Local property tax increases are already capped, in most cases, at 5.5 percent annually. Carcieri is proposing to lower that cap to something "more in line with personal income growth," which in the next fiscal year is a projected 5.1 percent, according to the state's revenue estimators. He is also backing a constitutional limit on year-to-year increases in state spending, not yet specified.

Carcieri also used his televised half-hour to rail against a proposal to change the state Constitution to allow the proposed Harrah's-Narragansett Indian casino in West Warwick. He called it "a travesty."

On two of the biggest political issues of the year -- rising health insurance and energy costs -- Carcieri said he would have more to say soon about "a new affordable health plan for small businesses and individuals."

But he used his moments in the spotlight to highlight the state's progress so far in meeting his first-year pledge to add 20,000 net new jobs over four years. To date, he boasted: "We are on track, with 14,000 through November." (An analysis of job growth during Carcieri's first three years in office shows that the state during that period has gained about 13,200 jobs.)

Said Carcieri's likely Democratic challenger, Lt. Gov. Charles J. Fogarty: "I think Rhode Islanders would have preferred to hear how the governor is going to fulfill the promises of the last three years, that he's made at these speeches, that haven't been done rather than a series of new promises."

With reports from staff writers Lynn Arditi and Jennifer Jordan.

kgregg@projo.com / (401) 277-7078

smayerow@projo.com / (401) 277-7513

egudrais@projo.com / (401) 277-7045

EXTRA: Find the full text of Governor Carcieri's State of the State speech, and give your own assessment of how Rhode Island's doing, at:

http://projo.com