PROVIDENCE – House lawmakers on Friday voted 69-5 to approve a $13.9 billion state budget for the fiscal year that begins July 1.
The spending package now goes to the Senate for likely approval before being transmitted to the desk of Gov. Daniel J. McKee.
House Speaker K. Joseph Shekarchi argued the revised package was a pared down document that prioritized the most needy residents in the face of expended federal funds and fiscal challenges on the horizon.
“We are emphasizing education at every level and supporting children ... while addressing our challenges, such as housing and health care," he said.
The revised budget is a $271 million increase over McKee’s proposal unveiled in January and goes without a late-session, Citizens Bank-supported amendment from the governor’s office to change the way banks are taxed by moving to a so-called “single-factor” methodology. Administration officials said that if enacted, it would have resulted in $7.7 million in lost revenue this fiscal year, growing to $15.6 million over the full fiscal 2025.
During a budget briefing on June 5, Shekarchi said he remains open to exploring alternative solutions to the bank’s concerns that can be voted on during the next year's legislative session.
The House budget makes changes to the state pension system by giving cost-of-living increases to beneficiaries who retired before 2012 and reduces the percentage threshold for all other beneficiaries. It also raises the pay retired educators can earn without losing benefits from $18,000 a year to $25,000. And provides the same pension benefits available to municipal public safety workers to their state counterparts.
The budget adds $1 million for small businesses financially impacted by the Washington bridge closure –
bringing the total to $2.6 million –
and increases funding to the R.I. Public Transit Authority by $5 million. There is $84 million toward the replacement of the Washington Bridge, now estimated to be roughly $400 million. The revised budget also adds $33.8 million over McKee’s proposal in state aid to K-12 public schools and provides free meals for students who are otherwise eligible for the federally reduced rate.
There is full funding to the tune of $160 million for Medicaid reimbursement rate increases that McKee had proposed addressing with a three-year phase-in.
The plan retains McKee’s proposal to raise the exemption on taxable retirement income from $20,000 to $50,000, which will cost $27.5 million in fiscal 2025.
The House also authorized several bond questions to be put before voters on the November ballot, including a $120 million housing bond, the largest in state history; an education facilities bond; and a $10 million arts bond for cultural facilities.
Figures from the May Revenue Estimating Conference projected a nearly $243 million surplus over the current fiscal year budget, with state revenue for fiscal 2025 exceeding earlier projections by nearly $60 million.
Other budget amendments include an increase in the time required to send notices of rent increases to rental tenants from 30 to 60 days. And 120 days for tenants over the age of 62. And the bill authorizes a two-year extension of the Hope scholarship program and adds $30.6 million to McKee's request of $30.3 million to fund increases in cost of providers contracted by the R.I. Department of Children, Youth and Families.
Before the vote, some House Republicans were critical of what they said was the budget's lack of support for the private sector.
Rep. George A. Nardone, D-Coventry, who supported many aspects of the final version, said it does "not do enough for the business community" in the form of tax or fee reductions, highlighting the removal by the House of the moderate $50 reduction in the corporate minimum tax that had been proposed by McKee.
"You pay [the tax] whether you make money or lose money in Rhode Island," he said. "But I guarantee you the business community created much of the surplus. They should have been paid more attention to."
(REWRITES throughout with final vote, comment.)
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
