PROVIDENCE, R.I. — The Rhode Island Senate on Monday endorsed an $8.7 billion budget for the coming fiscal year that legislative leaders said makes bold changes to help the state economy, and sent it to Gov. Lincoln Chafee for his expected signature.
The Senate voted 32-5 in favor of the spending plan, hours after the Finance Committee endorsed it. The House passed it comfortably last week.
The plan includes several tax changes, including a cut in the corporate tax rate from 9 percent to 7 percent and an increase in the estate tax threshold to $1.5 million. It includes an increase in the gas tax and eliminates the Sakonnet toll as part of a plan to address transportation infrastructure statewide in the coming years.
It also contains $12.3 million for the next bond payment related to the state's backing of ex-Red Sox pitcher Curt Schilling's video game company. The company, 38 Studios, went bankrupt after receiving a $75 million state-backed loan.
Senate Finance Chairman Daniel Da Ponte, D-East Providence, called it a fair budget that protects the state's vulnerable but also makes bold investments, including in transportation. He said it sends a clear signal that Rhode Island — which has the nation's worst unemployment rate, 8.3 percent — is "open for business."
In a statement saying he intends to sign the budget, Chafee noted it includes many of his priorities, including bond referendums on the University of Rhode Island's engineering school, mass transit, and arts and culture, as well as authorization for a shared URI-Rhode Island College nursing education facility.
Chafee, a Democrat, also praised the increased spending for public education and $1.5 million for workforce development.
Some critics of the budget say it makes damaging cuts to the state's social safety net. The nonprofit Economic Progress Institute on Monday reiterated criticism over its elimination of property tax assistance for low- and moderate-income residents.
Sen. Dawson Hodgson, R-North Kingstown, was among those who voted against the plan, citing the 38 Studios payment. He called it disrespectful to taxpayers for Rhode Island to pay back the investors and, in his view, sweep the matter under the carpet.
The state remains responsible for $89 million in connection with 38 Studios.
Da Ponte argued that the potential consequences of a default, including a lower bond rating and higher future borrowing costs, are too great for the state.
"None of us take any pleasure in having to include this in the budget," he said. "None of us take any pleasure in what has happened."