OFFICIALS PROUD OF 'PENSION REFORM'

The regular session is over. But the General Assembly could be
called back to vote on several gambling matters.

PROVIDENCE -- The General Assembly headed into the start of a summer
recess just before 1:30 a.m. yesterday, finishing a session that may
well be known as the year officials agreed to overhaul the state's
public-employee pension system.

Other notable votes this year by lawmakers included the approval of
medical marijuana, new regulations to oversee the finances of nursing
homes, and the resurrection of a planned phase-out of the state's
much-hated car tax.

The year started out with questions over a divided House, split among
Republicans, dissident Democrats, and those loyal to House Speaker
William J. Murphy, D-West Warwick.

But until its final, testy hours, there was little of the infighting
that marked the previous year. And there were frequent proclamations
of harmony after the agreement between Republican Governor Carcieri,
Murphy and Senate President Joseph A. Montalbano, D-North
Providence, on the state's $6.35-billion budget for the fiscal year
that began Friday.

The centerpiece -- and most debated section -- of the budget was what
Carcieri and lawmakers dubbed "pension reform."

Carcieri and General Treasurer Paul J. Tavares both introduced plans
to trim mounting costs. In the end, the Assembly adopted most of
Carcieri's plan, incorporating some of Tavares' ideas and adding some
tweaks of its own.

The lawmakers instituted a minimum retirement age for the first time
since 1984; placed new curbs on the 3-percent, compounded
cost-of-living increases that state retirees get now; and reduced the
dollar value of each year of work in such a way that the maximum
benefit goes from 80 percent after 35 years, to 75 percent after 38.

The changes apply only to new teachers and state workers and those
with fewer than the 10 years needed to be vested in the system, a
group that includes about 4,300 state workers and about 7,000
teachers. The changes are estimated to save the state $25.5 million
this year and local school districts another $18.5 million.

UNION LEADERS were deeply unhappy. But Montalbano said legislative
leaders took "painstaking efforts to blunt the effect of pension reform."

"Unfortunately there was pain in this budget, and it did fall on
their members, and I did have sympathy for that," he said.

"But we all made a commitment -- the governor, the House and the
Senate -- on serious pension reform, and I don't think there is
anyone who will analyze it that won't say that was a serious
addressing of the issue."

ANOTHER NOTEWORTHY piece of the budget raised the exemption on the
state's motor vehicle excise tax from the first $4,500 of a vehicle's
value to the first $5,000.

The change, the first in three years, will result in lower car-tax
bills for residents around the state; the savings range from $4.88
per car in New Shoreham to $38.39 per car in Providence.

Carcieri has wielded his veto pen against a number of high-profile
measures, including the marijuana bill, which has already faced a
successful veto override in the Senate and is expected to be taken up
for an override vote in the House.

If the override succeeds there, Rhode Island would become the 11th
state in the nation to enact protections for people who use the drug
to treat symptoms of serious illness.

The governor also rejected a much-debated proposal to allow
home-based childcare providers to unionize and force the state to
negotiate with them over their work terms. That bill, passed by a
closer margin in both chambers, faces a more uncertain future.

Lawmakers must also decide whether to take an override vote on the
governor's veto of a bill that would have raised the state's minimum
wage, from $6.75 to $7.10.

And Carcieri has guaranteed he will reject at least one more bill:
legislation to allow Beacon Mutual Insurance Co., the state's
dominant workers' compensation provider, to expand beyond Rhode Island.

"I think that's a horrendous bill," the governor said Friday.

ABSENT FROM the forefront of legislative debate -- but still looming
throughout the building last week -- was the proposal by Harrah's
Entertainment and the Narragansett Indian tribe to build a casino in
West Warwick.

In May, lawmakers sought an opinion from the state Supreme Court
about the constitutionality of the latest casino bid. The court set
arguments for Aug. 15, forcing a delay of any legislative action.

House leaders were also still considering a plan, being pushed by
Carcieri and Montalbano, to facilitate the planned sale of Lincoln
Park to BLB Investors, a consortium of hotel and casino interests.

Carcieri and Montalbano agreed relatively early in the session on a
proposal that would allow BLB to expand the number of video slot
machines at the track from 3,002 to 4,752 and would lock in the
track's take on the machines for the next 18 years. In exchange, BLB
would invest at least $125 million in the aging facility.

BLB also pushed for a "parity clause" guaranteeing that no other
gambling company would be granted a more favorable tax rate.

The legislation cleared the Senate with ease, but the House delayed
action on the measure.

The track's current owner, British company Wembley plc, has scheduled
a shareholder vote for July 18 on the proposed sale. BLB told
lawmakers, during a rush of last-minute meetings last week, that it
needs the legislation to pass by July 15.

Murphy said that the House fiscal staff would start reviewing some
new financial data from BLB after the long weekend, and the House
Finance Committee would take the bill back up after that.

Montalbano said the House might shorten the length of the contract to
"about 15 years." He said he was also willing to bring the Senate
back to deal with the issue -- "hopefully before July 15; whenever
the House is ready to go."

AMONG THE MORE notable measures lawmakers did approve this session
were new tax breaks for movie- and television-production companies
that bring their business to the state, and a special income-tax
break for certain high-income workers -- a proposal backed by
Fidelity Investments.

They agreed to allow municipalities to install cameras at
intersections to catch people running red lights, and gave the
attorney general new powers to oversee the sale of any Rhode Island
public radio station, a proposal that resulted from an aborted plan
by Boston University to sell WRNI.

After years of fighting, advocates for domestic abuse victims won
passage of legislation that expressly gives judges in the state's
District and Family courts the power to order people subject to
restraining orders to surrender their guns.

And more information will be able to be distributed -- both online
and by police departments -- about the whereabouts of sex offenders
considered a moderate risk to the community.

Lawmakers delayed, until November, the implementation of a
much-debated lead-paint safety law, which would have taken effect Friday.

IN THEIR CLOSING hours, lawmakers fought several fierce battles over
firefighter contracts and a late-breaking bill to grant death
benefits to the "domestic partners" of police and firefighters.

Rep. Nicholas Gorham, R-Coventry, said he wasn't surprised the bill
would pop up, quite literally at midnight because "it's such a
terrible piece of legislation."

A former House labor chairman, Rep. Arthur Corvese, D-North
Providence, agreed the bill would hamstring cities and towns in
contract negotiations. Rep. Joseph Trillo, R-Warwick, denounced it
as an "an attempt by the public sector unions to get one more thing
out of this building."

But the former and current police officers and firefighters in the
House defended the legislation.

The "domestic partners bill" had been reintroduced and passed in the
Senate on Wednesday, after the House Judiciary Committee killed an
identical bill a day earlier. The new version went to the more
sympathetic House Finance Committee where it was approved 24 hours later.

Its emergence, after midnight, in the final hour of the session drew
angry rebukes from House Minority Leader Robert A. Watson, R-East
Greenwich, who shouted: "Have we decided our committee process is
defective? . . . Have we lost confidence in the chairman of House
Judiciary?"

"Hush," retorted House Majority Leader Gordon D. Fox, D-Providence.

But the cries of outrage coming from several others of the 48 or so
lawmakers who remained at that hour continued.

"This is a serious issue . . . that should be dealt with in the
light of day," said Rep. Laurence Ehrhardt, R-North Kingstown.

Facing this barrage, Fox reluctantly agreed to put off a vote
yesterday morning, with the understanding the debate would resume
when and if the lawmakers return in a few weeks for a veto-override session.

EARLIER, lawmakers settled on a way to make it easier for poor people
who have had their utilities shut off to get them turned back on by
making smaller monthly payments than currently required, after a
20-percent upfront payment.

And they gave final passage to a bill requiring people seeking
massage licenses to undergo criminal background checks and
fingerprinting. Anyone who has been convicted of sex offenses would
be denied a license, and businesses with unlicensed employees could
immediately be closed by the state.

The measure makes it easier to crack down on brothels calling
themselves massage parlors in order to take advantage of a
25-year-old loophole in state law that doesn't criminalize indoor prostitution.

But even as they headed home, for at least the next week, the House
and Senate left many issues undone, including legislation to remake a
series of state boards and commissions to remove lawmakers from their
ranks, in keeping with a separation-of-powers constitutional
amendment passed by voters in November. Scores of boards had been
addressed, including the state Lottery Commission, which would be
dissolved, but more work remained to go.

Carcieri said Friday he was still hopeful lawmakers would give him
the "secretariat" he has been trying to create to tie in and
streamline the operations of all of the state's major human-services
agencies. But Fox said the matter would have to wait until lawmakers returned.

"It's not over until it's over," the governor said. "I'm an optimist."

Carcieri was also continuing to push for the confirmation of Kathleen
Spangler, acting director of the Department of Mental Health,
Retardation and Hospitals, as the agency's permanent head.

Carcieri said a Senate hearing on Spangler, where she was blasted by
representatives of agencies serving Rhode Islanders with
developmentally disabilities, was unfair.

"You had a provider group come in on Kathy Spangler -- one of them
we're actually in suit on, to remove their license -- so for them to
come in to say she's not fit I think is completely inappropriate," he
said. The governor said, of the suggestion he intended to dismantle
MHRH: "Nothing could be further from the truth."

Montalbano said the Senate could still deal with the nomination when
it returns to vote on any veto overrides, the BLB legislation and
possibly the nomination of a traffic court judge to replace Aurendina
"Dina" Veiga, who resigned last week amid ethics and disciplinary inquiries.

He said the chief judge would like to see a replacement as soon as possible.