Text of the Governor's speech

PROVIDENCE - A cigarette tax hike, more than $74 million in municipal and education aid cuts and a rollback in pension benefits for state workers and teachers who wait until after April 1 to retire are key pieces in Governor Carcieri's proposal for averting a potential $357.4 million current-year deficit.

The deficit-avoidance plan he unveiled during a televised address from his office tonight was a patchwork of tax and fee increases, state-spending cuts and one-time revenue boosters, such as the sale of three state-owned pieces of land - including a Cranston parcel eyed as the new home of the state motor-vehicle registry - to Rhode Island Housing for a quick infusion of cash. He is also banking on $27.5 million in Medicaid bonus money from the Obama administration.

"Tonight, I've taken the unprecedented step of speaking to you directly, because we are facing extraordinary circumstances,'' Carcieri said in a speech he prepared for a 7 p.m. address from his office, broadcast live on local television and radio.

"How we decide to cure this deficit will have long-lasting consequences for Rhode Island's future. We can avoid the tough decisions and drift into more troubled waters, or we can set a new course that leads to sustainable spending and a brighter, more prosperous future for us all,'' he said.

"I know there are some out there who believe we need to increase taxes to solve this budget problem. I am firmly convinced that raising broad-based sales or income taxes would be disastrous for our state's future -- it will merely prolong the economic decline, hasten job losses, and hurt more of our families.''

"The state doesn't want to raise taxes to bail itself out of its deficit hole, but it is willing to eliminate aid to cities and towns that was designed to lessen Rhode Island's over reliance on local property taxes," said Dan Beardsley, executive director of the Rhode Island League of Cities and Towns.

Among the highlights of the governor's deficit avoidance plan:

**A $1 hike in the state's $2.46-a-pack cigarette tax that will make the Rhode Island tax the highest in the nation. But the increase will not necessarily make the cost of a pack of cigarettes here any more expensive than it would be in Massachusetts because of the proposed repeal of a minimum mark-up requirement here that currently adds to the cost.

Even with the tax hike, state officials say, a pack of brand-name cigarettes would sell for an estimated $6.67 here, compared to $7.12 in Massachusetts.

*The doubling of motor-vehicle title fees to $50, with even steeper increases from $75 to $250 in the cost of reinstating a suspended license.

*A cutback in state aid to the 39 cities and towns, including the withholding of $55 million in promised revenue sharing funds, and at least $10 million in anticipated school aid.

*A projected $3.7 million hike in the gross premiums tax paid by health insurers.

*The imposition of a minimum retirement age - 59 - and the repeal of laws requiring the payment of automatic annual cost-of-living increases to all future municipal and state retirees, including judges and state police, who leave after April 1. In addition, the retirement plan would shift from a defined-benefit pension to a government-style version of the 401K retirement plans common in private industry for new employees.

"None of these changes, however, will apply to those already retired. And, even with these changes, state and municipal employees and teachers will still enjoy an extremely competitive retirement package that rivals the best in the private sector,'' Carcieri said. "For example, at age 59, and after 35 years of service, they will still receive a pension of 75% - 80% of their salary. In addition, they will receive health insurance with a 20% co-pay. Many of you watching tonight don't have retiree healthcare provided by your former employer.''

He said the potential state and local savings could reach a potential $100 million annually.

"I have also considered the possibility of closing all non-essential state offices for certain days,'' he said. "At present, I have chosen not to but it may become necessary.''

While slashing state aid, he acknowledged the state's taxpayers are already reeling under the weight of heavy local property taxes. He said "various studies show that Rhode Island's property tax burden is the 7th-highest in the country. That's because of the cost of municipal services and public education. Our school spending per pupil is the 8th-highest in the nation; spending for fire service is number one in the nation; and spending for law enforcement is number 13."

Carcieri acknowledged the mid-year aid cuts he is proposing will be difficult on our cities and towns. "However," he said, "to help offset this reduction in aid, I have asked the General Assembly to enact several changes that will lessen the burden and help our municipalities reduce spending.''

He is proposing, for example, a series of moves aimed at getting the cities and towns and local school districts to save money - maybe not immediately, but eventually - by signing on to statewide health, food service and transportation contracts, and requiring minimum 25 percent "co-sharing'' by their employees on the cost of the health coverage.

He also asked the General Assembly to create a "high-level Government Reform Commission to study the feasibility of consolidations and regionalization of services in our cities and towns - including public education,'' and said "this new commission, unlike others, will have special powers and the authority to make detailed recommendations to the General Assembly for a mandatory vote during the next legislative session. Following that, if necessary, it will be brought to the general public as a referendum during the next election.''

"The time has come to get serious and decide once and for all if we as a people have the will to come together, break down boundaries, and share our resources,'' he said.

The only silver lining, said Beardsley of the League of Cities and Towns', is if the legislature agrees to release the communities from a host of mandates including required bus monitors, mandatory minimum staffing levels and changes to the local pension systems.

But those are long-term solutions. Cities and towns more immediate concern is how to make it through the coming months.

"I have absolutely no idea how some communities are going to make it until June," Beardsley said. At least a few will be forced to raise taxes, he acknowledged. "But some [city and town] councils will have to force communities to live with these cuts. What that's going to mean? [Things like] garbage collection every other week instead of every week. It means that Fourth of July celebrations are going to be eliminated, and senior citizens programs are going to see a reduction."

And these were among Carcieri's more obvious proposals.

Buried within the piles of paper were less obvious attempts to cut the numbers of people enrolled in state subsidized health care, "customize'' the health benefits available to this low-income population, and steer the elderly away from nursing homes.

For example, one proposal would impose a new $10,000 "liquid resource test'' for the 41,000 adults currently enrolled in the state-subsidized health insurance program known as RIte Care, that would effectively eliminate anyone who owns a home and a car.

Department of Human Services director Gary Alexander said his agency has "found that there are some adults who own a nice home, have a car... [who] don't want to go to work.'' Alexander said the new resource test is aimed at rooting them out.

Carcieri said: "Unfortunately, some are under the misconception that we are going to remove people from nursing homes. Let me be very clear; we will not remove anyone from a nursing home unless they choose to be moved.''

To produce its share of the promised savings, Alexander said his agency will need to create a preferred pharmacy list to cut Medicaid-paid pharmacy bills, and to steer 196 people away from nursing homes and assisted living facilities to less expensive alternatives over the next six months, or cut short their stays after their release from a hospital.

Under the terms of an embargo dictated by the governor's office, state lawmakers, mayors, union leaders and social service advocates were unable to get details on the budget plan and make comments on it until after Carcieri officially unveiled his proposal.

Democratic Legislative leaders said they were only partially briefed on the budget, in short conversations with Carcieri -- not state budget officials -- yesterday morning.
"We have not yet had the opportunity to see the budget proposal in detail or digest its contents," said Senate President M. Teresa Paiva Weed. "He talked in broad streams, but I didn't even leave there with a piece of paper," added House Majority Leader Gordon D. Fox.

Lawmakers say they don't expect to see the complete budget bill until it is submitted to the legislature tomorrow.

"I'm waiting to see something in writing ... so we can make some sort of statement on this that deals with fact rather than what may or may not be," Fox said.

But Carcieri got a thumbs up from one of the Democrats hoping to replace him in two years, state Treasurer Frank Caprio, who said: "The budget correctly focuses on reductions in spending and not raising taxes. Rhode Islanders are taxed enough."

Of the proposed pension-benefit cuts, Caprio - who oversees the state pension fund - said: "The reforms proposed by the governor now lie in the hands of the legislature, who will be the ultimate judge of whether or not they are fair, reasonable and achievable. My office stands ready to ensure the viability and sustainability of Rhode Island's pension system."

CENTRAL FALLS -- Seven staff members of the Donald W. Wyatt Detention Facility are facing punishments ranging from reprimands to firing in connection with the death of Hiu Lui Ng last August while in Wyatt custody.

Ng, 34, a computer engineer from New York, died as a result of complications from advanced cancer; he also had a fractured spine. His lawyers said Ng's pleas for medical care were ignored.

The disciplinary actions result from a just-completed internal investigation that exonerates the Wyatt facility with regard to Ng's medical care.

The seven unnamed staff members are being punished for "specific failures to comply with facility policies and procedures during Mr. Ng's 25-day detention at the Facility," according to a statement from the Central Falls Detention Facility Corporation, which operates Wyatt.

"The CFDFC stands by its initial statement that Mr. Ng was provided appropriate and timely medical attention to diagnose the late-stage cancer which ultimately caused his death, both in-house and through the use of outside hospitals," according to the statement.

Neither the facility nor its staff, according to the statement, learned that Ng was suffering from late-stage cancer "until after Mr. Ng. was diagnosed at Rhode Island Hospital on or about Aug. 1, 2008. Mr. Ng remained in hospital care from the time of his cancer diagnosis until his passing on Aug. 6, 2008."

The statement says, "The CFDFC reiterates that the actions of the Facility's staff, including the actions of those staff members that have been disciplined, did not contribute to the cause of Mr. Ng's death." It noted that the state medical examiner's office determined that Ng. died of natural causes associated with metastatic liver cancer.

Last month, ICE abruptly removed all 153 immigrant detainees from Wyatt and transferred them to five other states, as a team of investigators from its Washington headquarters and elsewhere arrived to investigate Ng's death. That Dec. 8 mass transfer marked at least the third time since 2007 that ICE has moved all detainees out of a facility after a highly publicized in-custody death.

Bellini said, "We believe that ICE has just completed their investigation, but heretofore they have not offered a disposition on what status of detainees returning to Wyatt is, or are."

ICE regional spokesman Michael Gilhooley said that ICE "has referred the case of Mr. Ng to the ICE Office of Professional Responsibility, and beyond that we cannot comment."

MEANWHILE, the Wyatt has begun "across-the-board cuts" that include layoffs, the elimination of prisoner programs, and a freeze on new hires in the months ahead unless the prison gets an influx of new detainees.

The loss of immigrant detainees is costing the prison about $100,000 a week and officials have been forced to reduce expenses. That has led to this week's layoffs and cuts in services.

Bellini, the Wyatt spokesman, refused to provide any specifics about how many of the prison's staff of 204 administrators, guards and support staff have lost their jobs, which programs have been cut or how much the facility hopes to save each week.

The Providence Journal has learned that two top officials, including an associate warden, were let go this week. Their combined annual salaries were more than $100,000.

Others may be gone by week's end.

"We have put into place the contingency plan," Bellini said. "We still don't know what the final look of this is going to be."

Bellini said that those who have been laid off or may lose their jobs through the contingency plan have nothing to do with the seven staff members facing disciplinary action stemming from the internal investigation into the Ng's death.

The action could have a crippling impact on Wyatt, which is reimbursed about $100 a day for each prisoner housed there.

As of today, there were 512 prisoners in Wyatt, about 150 to 200 less than its normal population in recent years. Bellini said that the prison also has shut down two of its 12 pods. Each of them houses up to 100 inmates.

The cuts are also bad news for Central Falls, the financially-strapped city that covers one-square mile.

According to city tax records, Wyatt paid Central Falls $504,656 in lieu of taxes in fiscal year 2008. That was more than three times what any commercial property paid in taxes. Fewer prisoners means that the city will get fewer dollars.

PROVIDENCE -- The man found dead under an overpass on Eddy Street last Friday has been identified as 56-year-old Paul Langlais, of Coventry, according to a state health spokeswoman.

The R.I. medical examiners office found that Langlais had died of heart disease.

Langlais' body was found by a construction worker early Friday morning, after a night of frigid temperatures.

Langlais was known to people at the Crossroads Rhode Island shelter in Providence, where he'd last been seen two years ago. The police said they also knew Langlais; he had a long criminal record with charges related to alcohol abuse.

Correction: An earlier posting misspelled Langlais' name.

It's slated to air on Channels 6, 10 and 12 and, for radio listeners, on 630 WPRO-AM and 920 WHJJ.

Channel 12's Web site, wpri.com, and Channel 10's Web site, turnto10.com, will also Webcast the address.

The governor is due to speak at 7 p.m.

PROVIDENCE -- The city of East Providence must be allowed to join in legal arguments against the teachers' union, which wants the Superior Court to reverse a salary cut effective at the end of the current pay period, Jan. 16.

City officials say it is particularly urgent that they be permitted to intervene in the case in light of a cumulative $9.3 million deficit projected for the schools and the possibility that the city is facing bankruptcy.

"It's worse than broke," Mayor Joseph S. Larisa Jr. said at a City Council meeting Tuesday night.

"If we were to pay all of [the school district's still accumulating deficit], we would need a 20 percent tax increase, at least, in this economy," he said.

This afternoon, City Solicitor Matthew T. Oliverio said, "We can't sit by idly. We have to intervene and advance very critical arguments" that Judge Mark A. Pfeiffer must consider before he decides whether to grant the relief sought by teachers.

The School Committee is counting on a salary rollback of about 5 percent that would save nearly $3 million by the end of the city's current fiscal year, Oct. 31.

"We laud the School Committee for their position," Oliverio said after a conference in Pfeiffer's chambers, "but it is not enough."

The school department incurred a $4.2 million deficit in the last budget cycle and is expected to rack up an additional $4.1 million in debt by the end of October, Oliverio said.

PAWTUCKET -- Two families were left homeless after a fire ignited today in the basement of aa home at 42 Campbell St.

Fire Capt. Timothy Noiseux said the firefighters on Engine 6, the first responding company, quickly knocked down the fire, but a 17-year-old boy living in the house was taken to Memorial Hospital for smoke inhalation. The Rhode Island Chapter of the American Red Cross was called to offer temporary shelter and assistance.

The Red Cross has had a busy winter in responding to house fires. In November and December, the Red Cross handled 33 house fires and assisted 229 people with food, clothing and shelter, said spokeswoman Marisa Albanese.

According to the complaint, which was filed yesterday with the Rhode Island Commission for Human Rights, Senesco Marine's employment application form, which is also posted on its Web site, requires all job applicants to attest that they are "physically and mentally capable of performing the essential job duties of the above position for which [they] have applied" and that they "have no need for changes or adjustments in the essential duties of the job in order to allow me to meet the demands of the position."

However, the ACLU complaint notes, "By well-established law, an employer must provide an employee with disabilities 'reasonable accommodations' that would allow the employee to perform the essential functions of the job. In purpose and effect, Senesco's attestation operates to bar persons with disabilities from applying for a job unless they first waive their legal right to request reasonable accommodation."

The complaint also alleges that Senesco's application form falsely warns applicants that if it turns out that they do require reasonable accommodation due to a disability, they will forfeit their right to workers' compensation benefits if they are injured on the job. The complaint calls this warning a "deliberate and blatant misrepresentation of applicable law [that] is intended to deter persons with disabilities from applying for a job if they would require reasonable accommodation."

But Senesco said in a statement today that it is "an equal opportunity employer which has always followed state and federal laws prohibiting discrimination in hiring and employment, as is attested to by the richness of diversity of Senesco's Quonset Point, Rhode Island workforce."

The statement adds that Senesco, "having been alerted to potentially ambiguous wording, in its employment application acted quickly and responsibly to clarify it" to accurately state what was intended all along. Senesco says it did so upon advice of employment counsel.

Senesco is "confident that it acted professionally, responsibly, fairly and in accordance with the spirit of all applicable laws, and that at no point did it engage in unlawful discrimination."

-- projo.com staff

A Prudence Island mother said today that a coyote attacked her 7-year-old daughter in their backyard and might have dragged her off into the woods if their family dog hadn't fought off the wild animal and saved her from harm.

If accurate -- no adults actually witnessed the incident and it remains under investigation -- it would be the first known attack on a human in Rhode Island since coyotes first arrived here nearly 50 years ago, according to Charles Brown, principal wildlife biologist.

"It's an extremely rare occurrence," he said. "We've never had a case like this."

Denise Allard said that coyotes have been seen with increasing frequency the past couple of years on the sparsely-populated island off Portsmouth in the middle of Narragansett Bay. On Dec. 30, her daughter, Lauren, went to play outside with Kelly, their yellow Labrador, just as it was getting dark.

When Allard went out to check on her daughter, at about 4:15, "I heard the dog barking frantically and Lauren screaming," Allard said.

Her daughter had gone across a narrow street behind her house to a wall that borders state-owned woods. Now, she was hysterical and running home with Kelly.

The girl said that a dog by the wall had suddenly lunged at her and grabbed her arm with its mouth. The animal was tugging on her until Kelly jumped into the fray. The girl thought Kelly bit the other animal and that Kelly might have been bit, too.

Allard, who hunts deer with a crossbow and has seen coyotes lurking in her neighborhood, immediately figured it was no dog that attacked Lauren. She's confident it was a coyote.

Once inside, Allard could find no bite marks on Lauren's arm. And Kelly, who was up to date on her vaccinations, only seemed to have a slight mark under her chin.

Allard reported the incident to the Portsmouth Police and its animal control officer. The state Department of Environmental Management was also notified. Volunteer firefighters tended to her daughter, but Allard declined having the Portsmouth paramedics visit by boat. Instead, she consulted with Lauren's physician.

The state recommends that any dog that has been vaccinated immediately receive a booster shot and be quarantined at home for 45 days, according to DEM spokeswoman Gail Mastrati, speaking on behalf of the state veterinarian. Allard said her veterinarian directed her to quarantine Kelly and not to bring the dog in for a booster until afterward.

WARWICK -- Today's storm did not find the School Department with the same staffing problems that left it lagging behind the rest of the state in clean up in December.

But the early morning use of an automated phone system notifying parents of a delayed start of classes today did leave some parents bleary-eyed and unhappy.

Phones started ringing at around 4:45 a.m., startling many people who rushed to answer what they thought were family emergency calls, only to receive a recorded message about the start of school.

A second round of calls notifying parents of the cancellation of morning kindergarten sessions went out around 6 a.m.

School Supt. Peter P. Horoschak, who had been up through the wee hours of the morning monitoring the weather, said he is still learning the computerized phone network and had not intended to launch the first call as soon as he recorded it. "I thought there would be a step that allowed me to set the time," he said. "Trust me, I was surprised as anyone when my own phone rang right after I recorded the message."

Typically, he said, messages should be sent around 6 a.m. He and other school officials noted that they have to walk a fine line in deciding when to send out the calls. They don't want to alarm people with pre-dawn calls, he said, but also have to be early enough to give people time to make alternate arrangements.

The court ruled that the case is moot because the records are already in the hands of Connecticut officials and said any ruling by the Rhode Island court system would not be binding on Connecticut courts.

John S. Remington Jr., whose age and address were not listed in the Supreme Court decision, was involved in an accident on Sept. 18, 2006 in Stonington, Conn., according to the court ruling. Remington's motorcycle struck the back of another vehicle after a party at Misquamicut Beach in Westerly, the court said, and he was knocked unconscious.

Remington was taken to Westerly Hospital, where medical personnel took blood samples.

Suspecting that Remington had been legally drunk, the police in Stonington enlisted the help of the Rhode Island Attorney General's office to obtain the results of the blood test. When the Office of the Attorney General issued a subpoena for the test results, Remington filed a motion to quash it. The Rhode Island Superior Court denied the motion, ruling that it had been filed in an untimely manner. The Superior Court later allowed the Office of Attorney General to obtain the blood test results, which were then turned over to the Stonington police.

"Now that the medical records are in Connecticut, this Court lacks the authority to tell our sister state what to do with them," the Supreme Court decision declared.

And, the court said, because any decision by it on the merits of the case "will not have a practical effect on the underlying controversy, the case is moot."

Read the court's order.

The hearing is scheduled for 2 p.m. before Judge Mark A. Pfeiffer.

The teachers' union is asking the judge to bar the School Committee from unilaterally cutting salaries and imposing payroll deductions to recoup 20 percent of the cost of health-insurance premiums. East Providence teachers currently do not contribute to the cost of health insurance.

The School Committee has voted to scale back the teachers' base salaries nearly 5 percent to their levels more than two years ago and reduce longevity and advanced-degree bonuses. The teachers are also to pay 20 percent toward health-insurance premiums. Also, the district will eliminate a buyback clause that had paid teachers up to $5,100 for not taking the city's health insurance.

Pfeiffer said he would rule on the issue before the changes hit teachers' pocketbooks on the next payday, Jan. 16.

Chafee was hit by a New York-bound train at about 3:35 p.m. on Jan. 3 at the South Attleboro train station. She was pronounced dead at the scene..

The police say they are investigating whether it was an accident or suicide.

The Massachusetts Medical Examiner's Office had not yet issued a report on her death, according to Joe Pesaturo, a spokesman for the MBTA.

PROVIDENCE -- The proceeds from last year's $20-million settlement over potential corruption charges against Blue Cross & Blue Shield of Rhode Island are going to help fund a key part of the state's health care system that insurers are often accused of underfunding -- the doctors, nurses, dentists and others providing primary care; the routine medical exams; and initial visits designed to prevent illness or send patients to medical specialists.

Neil Steinberg, president and CEO of the Rhode Island Foundation, announced at a press conference this morning that more than $800,000 will be distributed annually to doctors and clinics providing so-called primary care.

Also, to help encourage more medical people to enter the field, about one quarter of the fund's annual proceeds will anchor a first-in-Rhode Island program to cover school loans for doctors and other medical practitioners specializing in primary care.

Steinberg said the new medical programs were recommended by a consultant and medical experts across the state.

The $20-million settlement from Blue Cross was invested in securities whose value has dropped to $15 million, Steinberg said. But Steinberg said the remaining funds should be helping Rhode Islanders for decades to come.

Joining him at the press conference were U.S. Attorney Robert Corrente, who negotiated the settlement, and Lt. Gov. Elizabeth Roberts.

The new schedules will go into effect on Jan. 17, according to RIPTA spokeswoman Karen D. Mensel.

The new flex zone will help RIPTA passengers who have relied on Bus 9 in the past to get to the Zambarano unit of Eleanor Slater Hospital in the northwest corner of Burrillville. That bus line, which was in danger of being cut altogether, will no longer run all the way out to Zambarano.

The new Bus 9 schedules -- both inbound to Providence and outbound -- have also been posted on RIPTA's Web site.

The flex zone will also allow passengers in the Burrillville and North Smithfield villages of Pascoag and Slatersville -- and points in between -- more flexibility in getting places by bus than they have currently had, according to RIPTA.