- Ted, welcome back.

Always good to see you.

So here we are.

We are approaching the home stretch of the annual legislative session at the Rhode Island State House, when the state budget bill is introduced.

- Yeah, it's like the white smoke at the Vatican.

It's how we know, as political reporters, that we're reaching the end of the session, because they finally pop the budget bill, and that sorta starts the sounding gun so that we know we're off to the races.

- I like that visual.

So the nearly $14 billion budget plan that was released by legislative leaders makes a host of changes to the one that governor Dan McKee proposed earlier this year.

For instance, there's no bond question to fund a proposed state archives building, no tax break for Citizens Bank, and there's a different plan for funding the reconstruction of the westbound side of the Washington Bridge.

As someone who's been covering the State House and the budget for many years, what do you make of these changes?

- Well, it's a huge document.

So you can focus on those changes.

There's all sorts of...

There's a million things you could talk about.

But at a high level, I think what surprised me, Michelle, was the size of the budget.

And that's because, just to remind people, Rhode Island's state budget has grown by almost 50%, five-zero, since the year before the pandemic.

Now, lawmakers have told us over and over "That's because of all the federal COVID aid, it has to do with the pandemic.

As that money dries up, you're gonna see the budget shrink."

Well, that money is now drying up.

- Right.

- And the budget is not shrinking.

It's up at about $14 billion.

So I think I've been surprised to see state spending staying at that level, even as we get further away from the pandemic.

- And Governor Dan McKee has praised many of the specifics in the budget bill, but he's also voiced some concern about the amount of money that lawmakers want to spend.

Let's take a listen to what he had to say.

- We're deciphering, quite frankly, you know, the additional expenses that have been put in, the additional line items.

We're trying to get our arms around, you know, what's that doing, potentially, long term to the structural deficit.

Those numbers on it aren't completely clear yet.

- And Governor McKee is not the only one voicing that concern.

- Yeah, General Treasurer James Diossa actually put out a statement, somewhat quietly, only on social media, late on the Friday night when the budget bill came out, warning that the pension changes contained in the bill.

Lawmakers have added a lot, a number of policies to restore some benefits to retirees, saying that those could actually jeopardize the state's bond rating.

But then when reporters caught up with Diossa to sort of press him on that, see what he thought, he said, "Oh, but I... You know, I support the budget, I support the pension changes."

But even though he said that, I think the fact that his office felt the need to give a little warning initially just shows how much additional spending went into this and how, at least for some folks watching, there is a concern about whether it's sustainable.

- Well, and lawmakers say, "Look, there's good reason to spend this additional money."

They point to their key priorities: healthcare, education, and as you said, those retiree benefits.

- Yeah, well, and each spending item, of course, has a case behind it, right?

You mentioned healthcare.

Providers say they need higher Medicaid rates in order to, you know, keep the healthcare system sustainable in Rhode Island.

School committees say they couldn't afford the less generous K-12 funding formula aid that Governor McKee wanted to do.

And retirees, they say that they've been very squeezed by inflation, and they needed lawmakers to revisit some of those pension changes Gina Raimondo put in place in 2011.

And so legislators were able to fund all those commitments because there was a pretty big surplus left over from the last budget.

The problem is this budget has no surplus built into it, which means next year's budget, they could find themselves with quite a gap to fill, to keep funding all these priorities, without a bunch of extra money to pay for it.

- And of course, you always have to factor in the unknown, I think, of the Washington Bridge, who could have foreseen that this time last year?

- Right, that's a half-a-billion dollar project, Michelle, that was not on anyone's radar screen a year ago, and still wasn't included at all in Governor McKee's budget plan in January.

- Yeah.

Thanks so much, Ted.

I appreciate it.

- Good to be here.