Projo 7 to 7 News Blog

The Obama administration will transfer $93.5 million to Rhode Island on Wednesday as part of the state's share of the massive economic stimulus package signed last week.

The immediate funds, released by the U.S. Department of Health and Human Services today, represent an increase in the federal share of Rhode Island's Medicaid costs retroactive to last October. That essentially means that there are no strings attached to the money.

State leaders can do whatever they want with Wednesday's payment.

"There are no restrictions on the funds since they are retroactive," said Chip Unruh, spokesman for U.S. Sen. Jack Reed. "The idea is that the state has had to increase its budget deficit because program costs have increased because enrollment has increased with unemployment. These funds are meant to reduce that deficit so that Medicaid cuts to reduce the deficit aren't necessary."

The state is currently facing a budget deficit of at least $357 million. And while Reed's office said the money is meant to reduce that deficit, Rhode Island officials -- Governor Carcieri and the General Assembly -- will ultimately decide what to do with it.

Carcieri, for example, has suggested using it to pay for a tax cut.

The governor's spokeswoman, Amy Kempe, this afternoon confirmed that the state would receive approximately $93 million, but would not say whether the governor had any plans for the money.

"We will have a clearer indication by week's end of how this will be distributed," Kempe said. "But as a general rule of thumb, the state will look at each piece of funding, determine how it is to be distributed, follow all federal stimulus package rules and requirements, and start spending it as soon as possible."

The legislature has maintained that it has the legal authority to control stimulus spending, despite Carcieri's recently established Office of Economic Recovery and Reinvestment to manage the funds.

 Tags  Carcieri Medicaid Reed Rhode Island stimulus money unemployment

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