2020 -- H 8119

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LC005528

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2020

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J O I N T   R E S O L U T I O N

TO APPROVE AND PUBLISH AND SUBMIT TO THE ELECTORS A PROPOSITION OF

AMENDMENT TO THE CONSTITUTION OF THE STATE (LIMITATIONS ON STATE

SPENDING)

     Introduced By: Representatives Mattiello, and Abney

     Date Introduced: July 27, 2020

     Referred To: House Finance

     WHEREAS, The budget reserve account, also known as "the rainy day fund", was made

part of the state constitution through voter referendum in 1992 to ensure adequate cash and

budget reserves for unanticipated revenue shortfalls; and

     WHEREAS, The constitution limits appropriations for any fiscal year to ninety-seven

percent of estimated revenues and requires the three percent difference to be deposited into the

budget reserve account until the account reaches five percent of said revenues; and

     WHEREAS, Experience has demonstrated that the five percent cap results in insufficient

funding of the reserve account; and

     WHEREAS, The viability of the reserve account will be restored by limiting

appropriations from ninety-seven percent of estimated revenues to ninety-five percent of

estimated revenues and allowing the cap on the budget reserve account to be expanded from five

percent to ten percent of revenues; and, now, therefore be it

     RESOLVED, That a majority of all members elected to each house of the general

assembly voting therefore, an amendment to section 16 of Article IX of the Constitution of the

state shall be proposed to the qualified electors of the state for their approval in accordance with

the provisions of Article XIV of the Constitution, and upon such approval, the amended section

16 of Article IX, set forth below, shall be included in the Constitution; and that said proposition

of amendment shall be submitted to the electors for their approval or rejection at the next

statewide general election, and said proposition of amendment shall appear on the ballots and

shall be preceded by the following explanation and space to "approve" or "reject", all of which

shall be in substantially the following form:

     CONSTITUTIONAL AMENDMENT – BUDGET RESERVE ACCOUNT

     Approval of the amendment set forth below will increase the funding and restore the

viability of the budget reserve account, also known as "the rainy day fund", by limiting the

amount of estimated revenues that can be appropriated and increasing the cap on the reserve

account.

     APPROVE_________

     REJECT___________

ARTICLE IX

     Section 16. Limitation on state spending [Effective from July 1, 2021 until July 1, 2030].

     (a) No appropriation, supplemental appropriation or budget act shall cause the aggregate

state general revenue appropriations enacted in any given fiscal year to exceed ninety-seven

percent (97%) of the estimated state general revenues for such fiscal year from all sources,

including estimated unencumbered general revenues to the new fiscal year remaining at the end

of the previous fiscal year. Estimated unencumbered general revenues are calculated by taking the

estimated general revenue cash balance at the end of the fiscal year less estimated revenue

anticipation bonds or notes, estimated general revenue encumbrances, estimated continuing

general revenue appropriations and the amount of the budget reserve account at the end of said

fiscal year.

     (b) The amount between the applicable percentage in (a) and one hundred percent (100%)

of the estimated state general revenue for any fiscal year as estimated in accordance with

subsection (a) of this section shall be appropriated in any given fiscal year into the budget reserve

account; provided, however, that no such payment will be made which would increase the total of

the budget reserve account to more than five percent (5%) ten percent (10%) of only the

estimated state general revenues as set by subsection (a) of this section. In the event that the

payment to be made into the budget reserve account would increase the amount in said account to

more than five percent (5%) ten percent (10%) of estimated state general revenues that said

amount shall be transferred to the Rhode Island Capital Plan fund to be used solely for funding

capital projects.

     (c) Within forty-five (45) days after the close of any fiscal year, all unencumbered

general revenue in the year end surplus account from the said fiscal year shall be transferred to

the general fund.

     Section 16. Limitation on state spending [Effective July 1, 2030].

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     (a) No appropriation, supplemental appropriation or budget act shall cause the aggregate

state general revenue appropriations enacted in any given fiscal year to exceed ninety-seven

percent (97%) ninety-five percent (95%) of the estimated state general revenues for such fiscal

year from all sources, including estimated unencumbered general revenues to the new fiscal year

remaining at the end of the previous fiscal year. Estimated unencumbered general revenues are

calculated by taking the estimated general revenue cash balance at the end of the fiscal year less

estimated revenue anticipation bonds or notes, estimated general revenue encumbrances,

estimated continuing general revenue appropriations and the amount of the budget reserve

account at the end of said fiscal year.

     (b) The amount between the applicable percentage in (a) and one hundred percent (100%)

of the estimated state general revenue for any fiscal year as estimated in accordance with

subsection (a) of this section shall be appropriated in any given fiscal year into the budget reserve

account; provided, however, that no such payment will be made which would increase the total of

the budget reserve account to more than five percent (5%) ten percent (10%) of only the

estimated state general revenues as set by subsection (a) of this section. In the event that the

payment to be made into the budget reserve account would increase the amount in said account to

more than five percent (5%) ten percent (10%) of estimated state general revenues that said

amount shall be transferred to the Rhode Island Capital Plan fund to be used solely for funding

capital projects.

     (c) Within forty-five (45) days after the close of any fiscal year, all unencumbered

general revenue in the year end surplus account from the said fiscal year shall be transferred to

the general fund.

     RESOLVED, That the said proposition of amendment shall be submitted to the electors

for their approval or rejection at the next statewide general election. The voting places in the

several cities and towns shall be kept open during the hours required by law for voting therein;

and be it further

     RESOLVED, That the secretary of state shall cause said proposition of amendment to be

published as a part of this resolution in the newspapers of the state prior to the date of the said

meetings of the said electors; and the said proposition shall be inserted in the warrants or notices

to be issued previous to said meetings of the electors for the purpose of warning the town, ward,

or district meetings, and said proposition shall be read by the town, ward or district clerks to the

electors in the town, ward, or district meetings to be held as aforesaid; and be it further

     RESOLVED, That the town, ward, or district meetings to be held aforesaid shall be

warned, and the list of voters shall be canvassed and made up, and the said town, ward, or district

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meetings shall be conducted in the same manner as now provided by law for the town, ward, and

district meetings for the statewide general election.

     This joint resolution shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

J O I N T   R E S O L U T I O N

TO APPROVE AND PUBLISH AND SUBMIT TO THE ELECTORS A PROPOSITION OF

AMENDMENT TO THE CONSTITUTION OF THE STATE (LIMITATIONS ON STATE

SPENDING)

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     This joint resolution proposes to submit to the electors a proposition to amend the

constitution by increasing funding of the budget reserve account, also known as the "Rainy Day

Fund", and limiting state spending.

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