Anchor Staff Writer
Governor Dan McKee unveiled his new budget plan for Rhode Island Fiscal Year 2022. The budget plan McKee proposed totals around $11.2 billion, down from the last budget that was $12.7 billion.
Under this McKee’s budget proposal Rhode Islanders can expect to see no increases in income or sales taxes. However, the plan does include an increase in taxes for larger Paycheck Protection Program (PPP) loans that were forgiven. According to the proposal, “Forgiven PPP loan amounts below $150,000 would be tax-exempt, but amounts above this would be taxable.”
McKee’s proposal includes a plan to legalize recreational marijuana. The Department of Business Regulation would regulate marijuana and the tax rate would be around 20%, which the McKee administration estimates could bring in approximately $1.7 million in revenue this year and $17 million in the next year. Other important initiatives included in the proposal are: increased beach fees in Westerly and Galilee, increased the real-estate conveyance tax for houses sold for over $700,000 and increased licensing fees for local hospitals.
The governor said, “The Fiscal Year 2022 budget protects Rhode Islanders through an unprecedented public health crisis and lays the foundation for a durable recovery.” McKee’s proposal includes targeted, short-term support for small businesses. This support includes $30 million in CARES Act funded grants in FY2021 for small businesses impacted by the pandemic and $1 million for the Small Business Assistance Program.
The state’s six-year car tax phaseout plan is expected to stay on schedule. However, continuing the car tax phaseout will cost the state approximately $175.3 million in fiscal year 2023 and $232.4 million in fiscal year 2024.
McKee asserted that the goal of his budget proposal is to maintain, “a strong focus on fiscal responsibility, equity, education and reopening our economy.”
Although the budget has been proposed, it has yet to be approved by the General Assembly. In addition, this budget does not include any federal relief money from the American Rescue Plan President Biden signed into law on Thursday. Due to this, McKee said that his budget proposal “still has the potential to evolve.”
The next fiscal year beings on July 1. General Assembly members are set to begin holding hearings on the proposal in the coming weeks.