By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Governor Chafee says many of the cuts in aid for developmentally disabled Rhode Islanders that drew thousands of protesters to the Statehouse this week would have been avoided if lawmakers had approved his original budget proposal.

“It was a bold budget, but it did a lot of good,” Chafee told WPRI.com during a 30-minute interview in his Statehouse corner office. In addition to tackling locally run pensions and a transportation funding backlog, he said, the plan “didn’t make the deep cuts that now we have 2,000 people out here with legitimate, legitimate concerns about their children and what’s happening to them.”

The House and Senate balked at major portions of Chafee’s initial $7.7 billion tax-and-spending plan, particularly the complicated sales tax hike that led to an outcry from the business community. Lawmakers chose instead to rely less on additional revenue and more on cuts in spending. Chafee signed the budget in June.

The governor said human services are the only part of the budget left where major cuts can be ordered, because sharp reductions have already been made in municipal aid and other departments while safety-net spending continues to rise, particularly on health care.

“We want to address it, but it’s a tough area,” Chafee said. “You’ve got needy, expensive human beings that are going to be affected by these cuts. We’re always looking for efficiencies, but there are going to be ramifications here. And I’m willing to take some - that’s where we focused it.”

“These are the questions you’ve got to wrestle with,” he said.

New sales tax plan mulled

That’s one reason why next year Chafee may once again propose lowering Rhode Island’s sales tax rate while broadening its reach, two moves largely rejected by lawmakers last spring. The governor’s plan would have dropped the rate from 7% to 6%.

Senate President M. Teresa Paiva Weed has suggested repealing a portion of the small tax increase that did pass last year – specifically on sightseeing tours of sites like the Newport mansions – but Chafee argued that’s not the way to go.

“For a little added tax on a ticket to the Marble House, so that we don’t have to take the developmentally disabled and go back?” he said. “We’re going back to the Ladd School way of dealing with this, that we worked so hard to get away from.”

Asked what he would do differently next year to get the plan enacted, Chafee said: “Certainly, stressing the lowering part of it. … That seemed to get lost in the whole hubbub of last spring.” A lower rate, even if it taxes more items, would improve the state’s placement in national economic rankings while smoothing out ups and downs in state revenue, he said.

“The reason for that is when times are tough, people hunker down – they only spend money on exempt items, so we, the state, suffer in our revenues,” Chafee said. “And when times are good, and they’re all of a sudden spending money on things that are covered by the sales tax, all of a sudden we’re flush.”

Debt fight damaged economy

The governor said his administration has grown increasingly concerned about the economic outlook after new employment data showed a sudden reversal of Rhode Island’s already limited progress. “We saw those August numbers and just couldn’t believe what happened,” he said.

Anecdotal evidence from businesses led Chafee to think the turmoil in Washington played a key role. ”We heard a lot of people lost confidence after the debt ceiling crisis,” he said, paraphrasing the sentiment: “If Washington can’t do the minimum steps necessary to move the country forward, we’re just losing confidence. We’re going to hunker down. We’re not going to take those little risks we might have taken.”

Chafee said the level of partisan dysfunction in the Beltway has continued to worsen since he left the U.S. Senate in 2007. ”I mean, it really started back in 1994 when that crew came in – fighting and Gingrich and shutdowns,” he said, referring to the Republican Revolution of that year. “But it seems to be really just insoluble now.”

Closer to home, Chafee said he was dismayed to contrast how the University of Pittsburgh Medical Center managed to bring together 20 hospitals into a major medical district, while Rhode Island was unable to consummate “our little Lifespan-Care New England merger.”

“But the main thing to get out of our travails, is working together,” he added.

‘New standard’ in North Prov.

During his campaign for governor, Chafee frequently discussed “the ABCs” – using the state’s assets, fixing the budget, and cracking down on corruption. He said he sees progress on all those fronts, including the last one, in that case thanks to the work of the U.S. Attorney’s office, the FBI and the Rhode Island State Police.

“The North Providence police chief situation could have been pushed under the rug very easily, but there’s a new standard,” Chafee said. “To change any kind of reputation takes time. I think we’re changing that reputation.”

Asked whether after 10 months in office he still espouses a consensual approach to politics, Chafee was unequivocal: “Yes. Definitely. I’ve never wavered on that. I’ve just seen Rhode Island suffer from dissension” – citing labor strife that damaged companies such as Brown & Sharpe, Narragansett Brewery and Gorham Manufacturing – “and how unproductive that is for our state.”

“So despite blowback or whatever might have occurred, I firmly believe in the image of pulling on the oars together moves the boat forward in a much more efficient manner than everybody out of sync,” Chafee said. “That’s just what I’m really focused on – this has to be a joint effort of the House, the Senate, the labor leaders, the business community.”

As evidence, Chafee pointed to the relationships his late father, John Chafee, had as governor with lawmakers like House Speaker Harry Curvin. ”He was successful at working with the legislature – he really worked hard at that,” Chafee said of his father, who was governor from 1963 to 1969.

Horse of a different color

The governor later pointed to his days as a farrier to show he knows when to take a tougher line.

“I worked on the horse race track shoeing horses,” Chafee said. “I weigh 155, 160 pounds, and they weigh 800, 900 or 1,000 pounds. So you learn that you have to get along with them in order to get the shoes on. But there also comes a time, sometimes, when you have to take out a striper and stripe them a couple of times. But I really reserve that.”

Chafee said he thinks the way he governs will win people over down the line.

“I just believe … if we can fix the DMV, if we can fix Central Falls, if we can fix the pensions, if we can get the Knowledge District at least on the move … then the allies will come,” he said. “Just do a good job and fix things and focus on big, long-term goals … that all plays into what people want out of government.”

This is the second in a two-part series; click here to read the first part, which focused on pensions.