Shekarchi: 'We need to learn to live within our own state budget'

Rhode Island House Speaker K. Joseph Shekarchi is warning organizations facing money problems — from hospitals to big real estate projects to the mass transit system — not to assume the state will bail them.

In a wide-ranging interview Monday on next year's General Assembly session, Warwick Democrat Shekarchi said now that the windfall of federal pandemic aid is mostly a thing of the past, there's less to spread around to favored causes.

"So we don't have a billion dollars in ARPA money. We don't have CARES act money. We don't have infrastructure money," Shekarchi said. "So we need to learn to live within our own state budget, our own state funds."

That could be bad news for the Superman Building, if its owner expects additional state help to renovate it, or for plans to jumpstart development of the area around Pawtucket's under construction soccer stadium.

Families or school districts hoping Rhode Island will join the list of states who provide free lunch to all students also shouldn't hold their breath.

For some long-sought causes that don't involve spending money there is new hope.

Shekarchi said he thinks "this is the year" at least some change to the police officers bill of rights will pass that makes it easier for departments to discipline officers accused of misconduct.

And there could be a new plan to reduce litter, though not necessarily the one that advocates have been pushing for.

To be clear, the state is still projecting a $98-million surplus this year, and a chunk of the federal COVID money has not yet been spent, but Shekarchi sees clouds on the horizon.

Still, Shekarchi believes "there are several fiscal cliffs coming" for the Rhode Island Public Transit Authority, the state's hospitals and those seeking housing.

Is RI health care in crisis?

The failed merger last year of Rhode Island's two largest hospital owners — Lifespan and Care New England — followed by an intervention by Attorney General Peter Neronha into Prospect CharterCare's hospitals, has put new scrutiny on the financial health of all hospitals in the state.

"I'm very concerned about the long-term viability of our two [largest] hospital systems," Shekarchi said. "Care New England and Lifespan: They are in the black at the moment, or at least breaking even and meeting their obligations. But they're deferring a lot of long-term maintenance to get there."

Shekarchi said one problem plaguing the health-care sector comes from having a large number of residents enrolled in Medicaid, which pays lower reimbursements to providers than private insurance.

Another problem appears to be that private insurers pay less for the same services here than they do across the border, putting local providers at a financial disadvantage.

"Look, doctors can do an operation here in Rhode Island and get paid $2,500 and they go across the border in Massachusetts and get $4,500 for it," he said. "And by 'in Massachusetts' I mean Attleboro and Seekonk."

Shekarchi said he doesn't know what the best solution is to the payment problems and is awaiting recommendations from Neronha and an upcoming study from the Rhode Island Foundation.

"So we are losing doctors because they're coming out of medical school with high debt and they're looking for ways to pay it down," Shekarchi said. "We have a labor shortage across the whole spectrum of industry, including state government, all aspects of government. The answer isn't necessarily always money too."

Will pensioners get their COLAs back?

On the increasingly vocal campaign by current and retired public employees to scale back R.I.'s dramatic 2011 pension cutbacks, Shekarchi was non-committal.

He said he believes it is important to review what was done 12 years ago "to see if it's working, to see if there are any unintended consequences and to see if we can make any changes...Do we want to make any changes."

He said he has no pre-set notions of what can or should be done, and is waiting for the pension advisory group empaneled by state Treasurer James Diossa to finish its work. But he said he sympathizes with the people who were expecting a yearly COLA and didn't get one.

"When I look at this issue, I look at it not only for retirement benefits, I [also] have to look at it...from [the] lens for current state workers and for the taxpayers."

"Clearly," he said, "everything's all in the math. It's all about what we can afford as a state."

Will all students eat for free?

On another hot-button issue — free school lunches for all, regardless of family income — he is no more sold on the idea than he was during the last legislative session.

Some legislators are backing "free" lunch, others "free" lunch and breakfast with cost estimates ranging from "$20 million to $40 million annually out of the budget."

As with any other big ticket items, Shekarchi said the proposal needs to be "balanced" against other needs.

He said a number of districts already offer free lunch, but "some school districts don't want to fill out the forms or get the parents to fill out the forms" to take advantage of the money already available for students who qualify.

"That drives up the cost for the state taxpayers. So we have to look at this and see if there's a creative and affordable option."

His personal view: "For those who need it, we should help. For those who don't need it, then we can redeploy the costs and those taxpayer dollars to another area."

Will granny flats be legal or Airbnbs taxed?

In the previous legislative session, Shekarchi made housing his top priority and passed a dozen bills aimed at streamlining local land use permitting to make it easier to build.

Another package of that size is unlikely next year, but Shekarchi will make a renewed push to pass legislation to legalize accessory apartments, sometimes known as "granny flats," which has died in the Senate the past two years.

And he said there are likely to be new housing affordability bills coming out of two House commissions that have been studying the issue for two years.

Housing Secretary Stefan Pryor has asked for $100 million in borrowing to pay for housing programs and construction. In addition to that, or in case it doesn't happen, Pryor also supports levying hotel tax on short-term vacation rentals.

Shekarchi said he is waiting for a recommendation from a commission led by Rep. Lauren Carson of Newport on short-term rental taxation.

"There are people who have a lot of Airbnbs and there's some people that have one Airbnb or one in a part of their house," Shekarchi said. "I think she's trying to find either a happy medium or an exemption if you just have one."

Will RIPTA run out of money?

If RIPTA advocates and administrators are counting on a major infusion of state dollars to keep the buses in the state's public transit system running, Shekarchi threw cold water on that.

"Most if not almost all of RIPTA's money comes from the federal government. So this is going to be a federal issue," Shekarchi said.

Yes, he acknowledged: "We're implementing these bigger and bolder mass transit plans to help the environment, to help business and help congestion in the roads...[But] this needs to be looked at [as a] federal issue."

In the meantime, Shekarchi said: "Every other agency has to live within this budget...They have to live within their budget."

"We don't run these agencies. We don't get to hire anyone there...They have to prioritize just like every other department that's hurting."

As for what that means for the campaign to make RIPTA fare-free, Shekarchi also appears lukewarm. "I mean, they need to get their ridership up so that these buses are running with a higher capacity."

Will the Law Enforcement Officers Bill of Rights be repealed?

Reform seemed certain during the last legislative session after another spate of stories about cities and towns finding themselves unable to discipline or fire police officers who had gotten into serious trouble.

But nothing happened until the Senate birthed a potential rewrite of the state's "Law Enforcement Officers Bill of Rights" in the final hours of the session, and House leaders balked at passing anything that big, that late.

On Monday, Shekarchi gave the Senate credit for creating a study commission, passing a bill aimed at striking a compromise. But "they passed it on the very last day of session ... I really didn't think it was fair to my membership or to anybody for us to move a bill like that to the floor without public hearings and without input."

He said he asked three House members — including a current police officer, a former police officer and the former chairman of the Providence civilian review commission — to look at the Senate's bill and continue to work with the opposing sides over the summer.

While calling the resulting draft "a work in progress," Shekarchi said he thinks "this is the year." (He didn't reveal the specifics.)

What will happen to the Cranston Street Armory?

Shekarchi said he has not received a request for funding to renovate the Cranston Street Armory, but expects that Providence Mayor Brett Smiley will require state money if the city is going to take over the decrepit landmark.

What should the former National Guard castle become?

"I believe it should be a city solution because, even though the Armory is owned by the state, all the land and the parking area is owned by the city," he said. "It is really more of a neighborhood and more of a Providence endeavor."

Does the Superman Building need more money?

Shekarchi said he understands the underway conversion of the Industrial Trust tower into apartments will need additional money, although he doesn't know how much.

"Because of the economy and interest rates there's a shortfall or a gap," he said. "I can throw out numbers, but I'd be guessing."

He said the owner of the Superman Building might want to look into new funding available by the federal Inflation Reduction Act for housing near transit.

He added that he thinks it would be "very difficult" to get enough support in the House to approve additional state funding for the Superman Building.

Moving to another big construction project, Shekarchi said he has not received any request from or heard about any need for additional money for the underway Pawtucket soccer stadium project.

Will there be a bottle bill?

Despite the ongoing efforts of environmental groups intent on reducing plastic pollution, chances that the Assembly approves a deposit on beverage bottles are bleak.

"We need to look at other states and what's working and what's not working," Shekarchi said. "In the last 10 years, not one state has passed the bottle bill, because it doesn't work. And as a matter of fact, one state even repealed the bottle bill."

Instead of a deposit, Shekarchi said a "producer tax" on the makers of all beverage containers might be the answer on litter and pointed to the experience of Maine and Oregon.

Under these plans, he said, the tax revenue is used to pay for recycling.

Promises by the beverage industry to create a new kind of miniature liquor bottle, or "nip," have not come to pass.

"They gave us a song and a dance," he said.

This article originally appeared on The Providence Journal: In wide-ranging interview, House speaker says federal pandemic aid is mostly a thing of the past.