PROVIDENCE –– Governor Carcieri last night signed into law a swath of budget cuts that target poor children, state workers, and cities and towns to help close the largest current-year deficit in nearly two decades.

The governor signed the $168-million midyear budget revision –– known as the “supplemental budget” –– privately in his office just minutes after the Senate approved the bill in a controversial vote that labor union leaders said did not meet the required two-thirds majority.

The flurry of activity capped four months of public testimony and negotiations on the spending plan that avoided tax increases, but left many General Assembly members shaking their heads.

“There are a lot of things here that I’m completely distressed about,” Sen. Stephen D. Alves, D-West Warwick, said during the 10 minutes of discussion that preceded the 25-to-11 vote (two senators did not vote). “However, they’re things that need to be done. They’re things that we can no longer afford.”

But the difficult votes have just begun.

The General Assembly now focuses on a budget hole more than twice the size of this year’s deficit for the fiscal year that begins in July.

“I can tell you just from the numbers that are coming in, they’re not looking very good at all. We’re probably facing a $400-million deficit for the next fiscal year,” Alves said. “So, today we think these are tough choices? Two months from now brace yourself.”

Carcieri released a statement praising the Assembly for taking “the first step to solving the state’s fiscal crisis.”

“Unfortunately, we have much more work ahead of us,” he said.

The supplemental budget signed into law yesterday scoops $12.5 million in aid to cities and towns that was supposed to be distributed last month. Municipalities were warned of the looming midyear reduction, according to Dan Beardsley, head of the Rhode Island League of Cities and Towns.

He characterized yesterday’s vote as “not unexpected, but still very disappointing and unfortunate.”

“It’s a sad prelude to their deliberations of the ’09 budget that will be dramatically worse,” he said.

The new law also cuts state-subsidized health care, known as RIte Care, from more than 2,800 “non-citizen” children. More than 1,250 are in the country legally, while the rest are undocumented, according to the governor’s budget office.

While those children technically lose health-care coverage today, the governor’s spokesman Jeff Neal said the state would first notify those affected in writing. And it would likely take “several weeks,” he said, to update the state’s computer system to begin denying coverage to the children.

The Assembly hopes to pass a provision in the coming months to funnel around $1.3 million to community health centers to offer basic health-care coverage to the children, according to House Finance Committee Chairman Steven M. Costantino.

A separate budget provision cuts welfare benefits as of Aug. 1 to the families of 3,400 Rhode Island children who exceeded the state’s five-year limit for cash assistance. State law previously allowed families with children to receive reduced payments indefinitely.

Sen. Harold Metts, D-Providence, was the only other senator, aside from Alves, to speak out prior to yesterday’s Senate vote.

“This budget has added pain and torture to many people who are hurting,” he said. “I’m horrified.”

Metts did not specifically mention deeper human-service cuts already on the table for the coming fiscal year. The governor has proposed cutting subsidized health care for 7,400 adults and eliminating all welfare benefits for families after two years, instead of five.

Several top labor union leaders watched the Senate vote from the public gallery above the chamber. Without success, they lobbied hard against a provision to reduce retiree health-care benefits for state employees who retire after Sept. 30.

State officials are preparing for as many as 2,500 state workers –– about twice the normal number of annual retirees –– to leave their jobs before October because of the change.

Labor unions continue to discuss a separate “furlough” plan with the governor’s office to save approximately $14.8 million. Carcieri proposed in January forcing all of the state’s 15,000 public workers to take off six unpaid days before July.

With just two months left in the fiscal year, however, it is unlikely that the savings –– which are budgeted in the plan signed into law yesterday –– will come from furloughs alone.

AFL-CIO secretary-treasurer George Nee said several options are being discussed behind closed doors, but would not discuss them publicly. He also said that organized labor likely wouldn’t volunteer to give up much more.

“I think the labor community has already given up a lot, has already been subject to a lot of layoffs, a lot of job insecurity; this retiree health thing, that has a real impact on people’s lives going forward,” Nee said. “I think we’re already in the process of taking quite a few hits.”

Meanwhile, some questioned whether yesterday’s Senate vote and the governor’s subsequent signing were legal.

“Technically, it did not pass,” said Robert A. Walsh Jr., executive director of the Rhode Island chapter of the National Education Association.

The state Constitution states that a vote of two-thirds “of the members elected” to each chamber is required “to pass local or private appropriations.” Yesterday’s Senate vote narrowly passed with two-thirds of those senators who voted.

The Senate parliamentarian, John M. Roney, however, said the constitutional article did not apply in this case.

Other proposals passed in the supplemental budget include:

•Giving prison inmates, with the exception of sex offenders and those serving life sentences, extra days off their sentences for good behavior and participation in rehabilitation and treatment programs.

•Capping the population at the state’s Training School at 148 males and 12 females.

•Taking $26 million from Rhode Island Housing, the independent state agency that lends money and provides grants for affordable-housing projects.

•Allowing the state and local governments to post notice of rulemaking activities on the Internet, instead of in newspapers.

•Increasing the fines for drivers of all vehicles with more than two axles that cross the Pawtucket River Bridge or the Sakonnet River Bridge.

speoples@projo.com