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Gov. McKee releases FY24 budget proposal

Updated: Jan 19

Raymond Baccari

Editor-in-Chief

Image via Capitol TV

Gov. McKee released on Thursday his $13.75 billion state budget proposal that focuses on tax cuts, additional funding for housing, the K-12 education funding formula and more.


"My Fiscal Year 2024 budget proposal is aimed at making further progress toward our RI 2030 goals," McKee said in a letter at the start of the budget document. "There are three goals in particular that remain at the top of my mind: raising incomes for all Rhode Islanders, improving educational outcomes that meet Massachusetts levels by 2030; and creating a healthier state where we reduce chronic illness and improve health outcomes."


For fiscal year 2023, the project surplus is $610 million.


Here are highlights of the governor’s proposed budget:


Education:


  • The K-12 education funding is increased by $57.8 million, which will also see increased funding for the multilingual learner categorical and special education categorical.


  • $7 million will be earmarked to maintain 800 Pre-K seats that are “funded by an expiring federal grant.”


  • $7.9 million is included in the proposal that “Compensates school districts for enrollment losses to charter schools,” and $8.5 million for additional types of enrollment decreases.


  • $8 million in state fiscal recovery funds (SFRF) will go toward the goal of connecting Rhode Islanders “whose academic progress was disrupted during the pandemic with targeted coaching and wraparound services.”


  • For higher education, there will be $2.5 million in funding given CCRI to try and bring back students who obtained some credits, but left before obtaining their degree.


  • URI will see an additional $7.9 million in aid, with $1.5 million going towards “blue economy research and faculty.”


  • Rhode Island College will see a 5.8% growth in aid, $3.6 million, which includes $500,000 to implement a new biology and biosciences certificate program.


Taxes:


  • There is a proposed decrease in the state’s sales tax from 7% to 6.85%. Neighboring state Massachusetts’ sales tax is currently at 6.25%.


  • The planned three cent increase on July 1, 2023 will be waived, which the Rhode Island Office of Management and Budget says, “would save motorists approximately $24.6M across Fiscal Years 2024 and 2025.”


  • The budget also includes energy bill rebates for the 4% and 3% gross receipts tax on gas and electric bills.



  • The corporate minimum tax is being cut from $400 to $375.


Transportation:


  • $20 million in funding for municipalities for bridges, roads and sidewalks.


  • $70 million to restore lost revenue following the truck tolls being forced to shut off.


Housing:


  • Additional $30 million in SFRF to add more capacity in the state’s homeless shelters.


  • Increasing the number of staff who work for the state’s Department of Housing.


Rainy Day Fund:


  • $55 million in an additional fund will go toward supplementing the state’s rainy day fund, with the goal of increasing the fund overall.


COVID-19 response and Health:


  • $34.9 million in unspent funding from the FY23 budget’s $186.9 million in SFRF would be shifted to FY24.


  • $61 million reserved for Rhode Island’s COVID-19 contingency fund.


  • The Equality in Abortion Coverage Act, which would allow state funding of abortions for those who use medicaid and for those on the state employee health insurance plan.



McKee’s budget will now be subject to approval by the General Assembly, who, over the next few months will have hearings and make their own changes.


“At first glance, I am pleased that many of the initiatives proposed in the Governor's budget align with Senate priorities, including investment in education, providing tax relief for Rhode Island residents and small businesses, and taking fiscally responsible steps to ensure we are prepared for predicted economic downturns,” Chair of the Senate Finance Committee, Sen. Louis DiPalma, said following the release of the budget proposal. “Over the course of the next several months, the Senate Finance Committee will rigorously review every aspect of the budget proposal through a thorough and transparent public hearing process.”


House Speaker, Joseph Shekarchi, has not given any prejudgments on the proposal, but said that he has been briefed on some of the budget’s main proposals and looks forward “to seeing more details and how we can find common ground on shared priorities.”

“As always, we will rely on a thorough vetting of proposals through the House Finance Committee process. I am confident that effort will yield a final product we can all be proud of,” Shekarchi added.


To view the governor’s proposal in its entirety, click here.

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