PROVIDENCE – Rhode Island's revenue projections have been adjusted upward over previous estimates by nearly $80 million for the current and next fiscal years, according to the latest numbers adopted at the May 9 Revenue Estimating Conference.
The new numbers show a modest increase from the November 2024 forecasts that assumed a projected fiscal 2026 budget deficit of $250 million.
Current-year revenue is now forecast to surpass estimates by $60.7 million, primarily due to increases in tax collections, with the fiscal year beginning July 1 exceeding previous estimates by $19.3 million.
But in a statement House Speaker K. Joseph Shekarchi tempered expectations, saying the latest revenue outcomes "reflect the impact of a weakening U.S. economy, influenced by ongoing turmoil in Washington, D.C."
“While any short-term positive news is welcome, it is overshadowed by the significant uncertainty and numerous unresolved budgetary concerns,” he said.
The updated figures anticipate current-year revenue will total $5.6 billion.
In a joint statement, Senate President Valarie J. Lawson and Senate Finance Committee Chairman Louis P. DiPalma reiterated what they said were the fiscal challenges down the road.
“While we are encouraged by the relative stability of revenue and caseload estimates compared to November, we are facing a more complex budget landscape, necessitating tougher decisions than in previous years,” they said, vowing to pass a budget that will "balance the competing priorities and develop a responsible budget that best meets the needs of all Rhode Islanders."
“Should any further developments arise that require additional action, we will be prepared to respond accordingly," they added.
Among the swings in projections from November was the estimated collections from financial institutions being revised down by $27 million, with sales taxes trailing estimates by $22 million.
The General Assembly is reviewing Gov. Daniel J. McKee’s proposed $14.2 billion budget for fiscal year 2026. The legislature typically approves the state budget at the end of June.
Rhode Island Public Expenditures Council CEO and president Michael DiBiase on Monday said the current year estimates were “a pleasant surprise there is some extra money” given the worries over a possible near-recession expressed last month by economists with Moody’s Analytics.
However, DiBiase cautioned that the revenue growth rate seen between the current and next fiscal years- evidenced by the fact that the bulk of projected increases are occurring within a 2025 surplus, still portends a “tight” budget facing lawmakers come July 1.
”The increase [in bottom line revenues] is about 1.5%,” he said. “It’s a small growth rate. But these numbers don’t suggest any significant downturn.”
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
