PROVIDENCE – General Assembly leaders from the Democratic majority on Wednesday could not rule out the possibility of some tax hikes in order to tackle a projected $250 million fiscal 2026 budget deficit during The Greater Providence Chamber of Commerce 2025 Legislative Luncheon.
"Everything is on the table," said House Speaker K. Joseph Shekarchi during a conversation moderated by Chamber President Laurie White. “I don't get up every morning and ask how I raise taxes in Rhode Island. But I can never rule that out. We don’t know."
Complicating matters is the uncertainty in Washington, D.C., and whether expected funding will be clawed back or delayed
for projects like replacing the Washington Bridge or the annual dollars for grants to local colleges and universities will shrink enough to hamper the state's progress, said Shekarchi.
"What's happening in Washington will have a direct impact on what is happening in Rhode Island," he said.
The General Assembly is vetting Gov. Daniel J. McKee’s $14.2 billion fiscal 2026 budget proposal, which includes several proposals Shekarchi said will require “a lot of examination.” One example cited was the proposed 10% tax on digital advertising that the administration says would raise $20 million.
From Medicaid to colleges and universities, the uncertainty over President Donald Trump’s reductions in federal spending and personnel across a wide range of agencies have put Rhode Island's public and nonprofit on its heels, facing the loss of millions of dollars they depend upon for programming, according to Democratic panelists.
Senate Majority Leader Valarie J. Lawson, D-East Providence, said she found the cuts and funding freezes imposed by Trump “alarming" and worries it could negatively impact the state's public education system.
“It's extremely important that resources are available at every level to meet students' needs," she said. "In no world should be thinking about clawing back funds.”
On the other side of the Smith Hill political aisle, Senate Minority Leader Jessica De la Cruz said Trump’s executive orders have been polling well in the first months of his second term.
As a child of immigrants herself, De la Cruz said her party is often mischaracterized and the Trump administration is simply following the will of the American people, the majority of whom were swayed by a presidential campaign that promised lower taxes and less government.
"Americans voted for this overwhelmingly,” she said. “I'm actually very excited about what is happening.”
De la Cruz added that fears being expressed that the effort to downsize the federal government will hurt Rhode Island economically are overblown.
As for tariffs levied on Canada and Mexico, De la Cruz said she supported the moves because the two countries have failed "to be good neighbors," citing the ongoing southern border crisis.
As for the push by some Rhode Island progressives to tax higher earners in the state to fill the budget hole, House Majority Leader Christopher R. Blazejewski, D-Providence, couldn't rule that out.
“We don't have a printing press in the basement," he said. "We need to balance our budget.”
When prodded by White, Shekarchi said he has no plans to run for governor in 2026, instead pushing residents to lobby for what kind of state budget they would like to see during House and Senate budget hearings that mark the legislative session.
“For every piece of legislation, no matter how bad you think it might be, somebody else thinks it is good for them,” he said.
(UPDATED throughout with new details, comment; with minor edits.)
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
