Rhode Island has its best budget outlook in decades, thanks to a windfall of more than $1 billion and better than expected revenue, and Gov. Dan McKee said his latest $12.8 billion spending plan will help the state recover from the pandemic and move into the future.
The state has so much cash that budget officials likened their briefing on the plan for fiscal 2022-23 to being like almost three separate budgets: the use of $1.13 billion in federal pandemic assistance, a $618.4 million surplus from the current fiscal year, and the actual operating budget for the fiscal year starting June 30.
The laundry-list of spending items in the budget doubles as a potential political benefit for McKee, who faces a September primary against five rival Democrats.
In his introduction to the budget, the governor writes, “We have a comprehensive, fiscally responsible strategy that addresses pandemic-related health needs; builds more affordable and workforce housing; ensures every young Rhode Islander reaches their full potential; assists small businesses and revives our hard-hit hospitality industry; thinks big about bolstering growing sectors such as the blue economy and biosciences; invests in our workforce to get Rhode Islanders into more resilient jobs and sets the stage to help us increase the per capita income for every family across our state.”
The spending plan for fiscal 2022-23, with an $8 million surplus, is the first budget in more than 20 years to not present state legislators with the task of eliminating a deficit.
It avoids broad-based tax increases while anticipating the legalization of marijuana (details are still being worked out between the governor’s office and the legislature), and fully funding the state’s education funding formula.
McKee’s administration has presented a plan for spending the remainder of the state’s $1 billion+ in American Rescue Plan Act funds, following the approval earlier this month of an initial expenditure of $119 million. The money must be obligated by December 2024 and spent by December 2026. Budget officials said the biggest amount of money — $431 million — will be spent in fiscal 2022-23.
McKee proposes spending $250 million for housing, including $90 million for affordable housing; $50 million for down payment assistance for first-time home buyers, $26.5 million to help the homeless, and $20 million to create incentives for workforce housing.
Other priorities in the APRA spending: $212 million for economic and workforce development; $180 million to aid small business; $152 million for public health, $132 million for climate, and $119 million for children, families and education, among other uses.
From the surplus, McKee proposes using $108 million to build a new Zambarano Hospital, and to use $121 million for improvements at the Pastore complex in Cranston. As part of additional spending, $50 million would go to create electronic medical records for Eleanor Slater and to replace the mainframe for the state Department of Labor and Training.
The governor’s administration said his spending plan reduces Rhode Island’s long-term structural deficit, for example, from $379 million to $215 million for fiscal 2023-24.
Lawmakers hold months of hearings on the governor’s budget plan before passing a revised version, usually in June.
