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The Associated Press June 12, 2012, 10:19AM ET

RI Senate passes $8.1 billion budget

The Rhode Island Senate endorsed an $8.1 billion state budget Monday that would impose new taxes on taxi fares and pet grooming while increasing spending on education and services for the disabled.

The Senate voted 30-7 for the spending plan for the fiscal year beginning July 1. It now heads to Gov. Lincoln Chafee, who is expected to sign it into law. The House approved the budget last week.

Supporters of the budget praised its investments in education and services for the developmentally disabled. They noted that it avoids some tax hikes that Chafee first proposed, such as an increase in the state's meals tax.

"While it's been said this budget is far from perfect, it's a budget that's bold," said Senate Finance Committee Chairman Daniel DaPonte, D-East Providence. "What we have here is a responsible budget. One that looks to the future."

Pet groomers and taxi cab owners mounted last-minute efforts to derail the new sales taxes. The budget also would place the 7 percent sales tax on items of clothing that cost $250 or more. More than a dozen pet groomers stood outside the Senate chambers before Monday's debate to urge lawmakers to reject the tax.

"They promised when we voted them in that they would support small businesses, but they have stabbed us in the back," said Anne DuPere, owner of a pet grooming business in Tiverton.

One lawmaker who voted against the budget said she couldn't support the new sales taxes, which would raise about $10 million a year.

"Somebody has to speak out against the taxes on new businesses," said Sen. Bethany Moura, R-Cumberland.

Lawmakers did not include Chafee's proposal to raise the state's tax on restaurant meals from 8 to 10 percent. The budget also would eliminate a sightseeing tour sales tax approved last year. Senate Majority Leader Dominick Ruggerio, D-North Providence, said lawmakers could repeal the new taxes if state revenue projections continue to improve.

"No one really wants to put a tax on pet grooming or taxi cabs," he said. "But we'll have to take a look at this next year."

The proposal also would restore nearly $10 million in state and federal funding for services for the developmentally disabled. Lawmakers cut $24 million in state and federal funds for the services last year.

Local schools would receive $31 million more than they're getting in this year's budget. Some $11 million of the new money would go to underfunded districts around the state. Several lawmakers said schools were the biggest winner in the budget.

"If our people are not educated and prepared for the challenges of the future then we will not get the jobs here in Rhode Island," said Sen. Paul Jabour, D-Providence.

The budget proposal also would authorize a toll on the Sakonnet River Bridge. Critics warned it could hurt tourism and burden residents in the East Bay.

"Make no mistake about it: a toll is a barrier," said Sen. Walter Felag, D-Warren. "A toll is something that says `don't come in here.'"

Cigarette taxes would rise by 4 cents to $3.50 per pack under the proposal. Rhode Island has one of the highest tobacco tax rates in the nation; the national average is $1.46 per pack.

The budget would place referendums on the November ballot, asking voters to approve several state building projects including $94 million in new facilities and renovations at the state veterans' home, $25 million for affordable housing projects and $50 million to renovate buildings at Rhode Island College.

The spending plan also would give $2.6 million to municipal retirees in financially troubled Central Falls to make up for deep pension cuts imposed by a state-appointed receiver.

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