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State aid to communities to come under microscope

01:00 AM EST on Thursday, November 20, 2008

By Cynthia Needham

Journal State House Bureau

PROVIDENCE — House Speaker William J. Murphy and his top deputy are the latest voices to join the chorus calling for a review of the way the state dispenses local aid to cities and towns around Rhode Island.

“We’ve been very good at trying to give state aid –– whether school aid or local aid –– but [communities] are always very resistant to us dictating control on the expenditure side,” House Majority Leader Gordon D. Fox said during a legislative leadership panel this week. “It might be a good for us to start looking at this issue: If you’re going to take state money, here’s what you need to do to get it. One of those [requirements] may be being responsible with their health care.”

Beside him, Murphy agreed, saying he would ask the House Education and Welfare Committee to examine the matter once the session starts in January.

Their comments came days after news articles reported that educators in at least one community, East Providence, pay nothing for their health care. The teachers union in that city is now engaged in a protracted fight with local school officials who have accused them of “living large” at the taxpayers’ expense.

On Smith Hill, Murphy and Fox are not alone. In recent days, the Carcieri administration has also listed local aid financing as “one of the key pieces” state officials are examining as they craft a plan to cope with the $357.4-million budget deficit. The administration has thus far declined to specify what may be in store.

It was Carcieri who a year ago first recommended requiring cities, towns and school districts to join the state’s health-care system. The proposal got waylaid in the House Finance Committee amid concerns that some communities had already negotiated better deals than the state. (The General Assembly did, however, pass legislation prohibiting municipal health-care contracts from specifying a health-insurance provider.)

Yesterday, Fox called for the state health-care legislation to be resuscitated during the coming session, along with a review of what communities are doing to cut costs.

“At some point, the problems we are facing as a state are so big, it doesn’t make sense to have all these disparate groups running around in all directions,” the majority leader said.

Fox would not commit to plans to submit any specific legislation, and acknowledged that local communities must have a say in any proposals, but he stressed that the conversation needs to begin quickly given the scope of the deficit problems.

Dan Beardsley, executive director of the Rhode Island League of Cities and Towns, said he’s not surprised to hear the increased chatter surrounding local aid financing.

“I’ve gotten the message loud and clear,” he said. “It won’t be the first time cities and towns have come under a microscope, and I welcome the opportunity to discuss anything and everything that the legislature needs to do to balance the state’s budget.”

Beardsley said he’s heard whispers that if the state’s fiscal woes continue, education aid may also be targeted for cuts.

The League, he said, is finalizing a plan “to ask for tools to help us control costs we have no control over.”

He would not elaborate, but said the details should be made public in the coming days.

cneedham@projo.com

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