An obscure Rhode Island disaster funding board will meet for the first time in 47 years to debate borrowing $300 million to cover the state's cash flow gap resulting from deferred tax collections amid the coronavirus pandemic.
Originally established in 1973, the Disaster Emergency Funding Board will convene for the first time on March 26 to consider Democratic Gov. Gina Raimondo’s proposal to borrow up to $300 million from either the federal government or private sources.
The board is composed of four legislators: House Speaker Nicholas Mattiello (D), Senate President Dominick Ruggerio (D), Senate Finance Committee Chair William Conley Jr. (D), and House Finance Committee Chair Marvin Abney (D).
In a March 23 news conference, Raimondo said the state's revenues are “way down” and there's a need to borrow to ensure continuity of government.
“The federal government pushed back the tax filing deadline from April to July, and I’m following suit. That of course puts serious revenue pressure on the state,” Raimondo said.
“This is extraordinary, obviously. We are looking at an emergency situation. It is also exactly what we should be doing. It’s what every business is doing. It’s prudent to line up liquidity so we can continue to operate, continue to pay the bills, so we can get back on our feet.”
In a March 23 letter sent to the board members, Raimondo said she determined that the demands placed upon funds regularly appropriated to state and local agencies to cope with disaster emergencies were too great.
The state currently has a little over $200 million in its rainy day fund, which the Rhode Island Republican Party suggested the governor use before borrowing.
“The Disaster Emergency Funding Board cannot ignore the state constitution’s restrictions on debt,” Rhode Island Republican Party Chair Sue Cienki said in a release. “In general, under Article 6, section 16, debt cannot be incurred without voter approval except in time of war. . . . Under our form of government, it is the voters not a handful of State House politicians who decide Rhode Island needs hundreds of millions in debt. There are constitutional ways to get through this crisis.”