PROVIDENCE – The R.I. House of Representatives on Tuesday approved a $14.3 billion state budget plan for fiscal year 2026 by a 66-9 vote, prioritizing funding to health care, education and public transportation.
The tax-and-spending package was approved by the House Committee on Finance on June 11.
“Despite the very significant challenges we face in this fiscal year, this budget reflects our commitment to our priorities,” said House Speaker K. Joseph Shekarchi.
The budget plan is a $500,000 decrease from the previous year's budget but $120 million more than Gov. Daniel J. McKee’s proposed plan unveiled in January.
Shekarchi said uncertainty at the federal level and slim revenue-to-expenditure margins pushed lawmakers to target the biggest needs for Rhode Island, including a $45 million infusion to fund increases in reimbursement rates for primary care doctors while addressing a projected $250 million budget deficit in fiscal 2026.
The plan expanded McKee’s proposal to add new registration fees for electric vehicles, including a $200 annual registration fee for battery electric vehicles, a $100 fee for plug-in hybrids and a $50 fee for hybrids.
The approved budget plan maintains the assumption that the state’s toll gantries for commercial trucks will be reactivated by the end of the year, which is estimated to generate $10 million in revenue.
The revised plan sets aside $22 million in additional funding for the Washington Bridge rebuild and includes roughly $12 million to go to nursing homes and $38 million to hospitals.
The plan also increases the gas tax by 2 cents to 3 cents per gallon and directs the additional revenues to the R.I. Public Transit Authority, which is facing a budget deficit in excess of $30 million.
The House-approved budget plan retains McKee’s proposal to expand the 5% tax on short-term rentals to entire homes – it currently only applies to single rooms and hotels. The plan also increases the real estate conveyance tax paid for properties more than $800,000 to 2%, up from the 0.92% that is currently assessed. The budget plan also implements a new fee on nonowner-occupied homes of about 50 cents per $1,000 of assessed value.
House Finance Committee Chairman Marvin Abney called the plan “one of the most challenging budgets to craft in quite some time.”
He added, ”The fiscal issues Rhode Island is facing are significant.”
For cities and towns, the House fully funded both library aid and the funding formula for state aid to education for a total of $59 million above the current year’s level of funding.
Following the vote, the Rhode Island League of Cities and Towns issued a statement in support of the budget’s “commitment to municipal fiscal priorities.”
“These funding commitments will provide essential support to municipal leaders as they navigate tight budgets and continue to deliver vital services in communities across Rhode Island,” said Randy Rossi, executive director of the Rhode Island League of Cities and Towns.
The House forwent a proposal to institute a “millionaire tax” on high earners, although Shekarchi said it remains an option that he would prefer to leave on the table for consideration should the state’s circumstances change at the federal level.
The Senate Finance Committee is scheduled to vote on the budget on Wednesday. If approved, the full Senate will then schedule a budget vote.
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
