A $14.3 billion budget approved Tuesday night by the Rhode Island House Finance Committee funnels more money to healthcare, education and RIPTA, while steering clear of a tax hike for upper income Rhode Islanders.
The Finance Committee approved the spending plan, 11 to 3, on a party-line vote, after an hour-long presentation by House Fiscal Adviser Sharon Reynolds Ferland.
During an earlier briefing, House Speaker Joe Shekarchi said the drying of federal COVID aid and a more challenging fiscal outlook made this the toughest budget he’s overseen since becoming speaker in 2021.
He acknowledged that uncertainty about the effect of GOP budget plans in Washington could force lawmakers to return for a fall session to make revisions and deal with the fallout.
Shekachi cited that uncertainty as a reason for holding off on a proposal to boost taxes on upper income Rhode Islanders.
The budget does include a new tax on non-owner-occupied homes valued at more than $1 million – dubbed the “Taylor Swift tax” – with the escalating revenue earmarked for future redemptions of a low-income housing tax credit.
“While the budget as presented to us in January included some difficult gaps that we had to close before we could consider any new programs, I’m proud of the hard work that went into ensuring that the final product puts everyday Rhode Islanders’ fundamental needs front and center,” Shekarchi said in a statement. “The budget is always a statement of our values, and this one says that Rhode Island is committed to the health and well-being of every member of our community.”
The budget directs up to $45 million to raise the Medicaid reimbursement rate for primary care to the level of Medicare. That money comes from $15 million in additional state funding, with the rest coming from federal sources.
The spending plan also includes $38 million more for hospital reimbursement from what Gov. Dan McKee proposed in January, and an additional $18 million for nursing homes.
A two-cent hike in the gas tax will contribute toward a $15 million boost for RIPTA, the state public transit agency, which faces a deficit of about $32 million.
Assistance for people facing homelessness has increased by $8.5 million.
The budget also allows the developer behind a long-running plan to redevelop the so-called Superman Building in downtown Providence to use an additional state tax incentive while maintaining the existing cap on that program.
The budget moves to the House floor Tuesday.
