PROVIDENCE – During his fifth “State of the State” address before the General Assembly in the House chamber, Gov. Daniel J. McKee on Tuesday outlined key policy and budgetary priorities he will pursue for the 2027 fiscal year.
McKee, who will be sending his sixth budget proposal to lawmakers on Jan. 15, vowed a budget plan that will "touch every household in our state."
From proposals of rolling back last year’s 3-cents-per-gallon increase in the gas tax to eliminating the income tax on Social Security and creating a $325-per-child tax credit, McKee said his fiscal year 2027 budget plan would focus on “affordability for all."
Designed to counteract what he called "the harmful policies from the Trump administration," McKee said his budget request will include $9.5 million to create the state’s first Marketplace Affordability program to support the roughly 20,000 Rhode Islanders at the greatest risk of losing their HealthSource RI coverage and direct $10 million in state and federal funds to hospitals to prepare for the increase in patients without health insurance.
McKee also wants to implement enforceable caps on health insurance costs, with unspecified penalties on companies that do not comply. His plan would also invest $20 million to ensure the state is in compliance with new federal rules on Medicaid.
"Together, these actions will ensure vital health and nutrition support continues to reach those who need it," he said.
Acknowledging that many families "are at their breaking point when it comes to energy costs," McKee will propose to "reform and reduce" the 25% of energy bills that now stem from state programs and taxes.
He said his plan would deliver more than $1 billion in energy relief to ratepayers over the next five years.
McKee is also calling for a total of $600 million in statewide bond referendums be placed before voters on the November ballot.
In addition to building a State History Center on Capitol Hill, these proposals include a $115 million economic development bond to expand maritime and defense infrastructure at Quonset Business Park and the 195 District to develop construction-ready sites; a $215 million higher education bond to support new or upgraded facilities at the three state schools; $50 million for upgrades to career and technical education classrooms across the state; and
another $120 million housing bond, with $25 million dedicated to increasing homeownership.
"It’s not time to take our foot off the pedal," he said. "It’s time to keep Rhode Island building and fighting for the housing we deserve."
He will also ask for lawmakers to make the Hope Scholarship permanent for every qualifying student regardless of income.
McKee also plans to close the R.I. Public Transit Authority's $14 million budget deficit. And in response to growing calls for reforms to the R.I. Department of Transportation since the closure of the Washington Bridge, his administration will seek additional oversight of engineering work managed by the agency "to review inspection reports and ensure an abrupt closure like this never happens again."
"I am asking the people of our state to join me, and together, we will continue to build the future Rhode Island deserves," McKee said. "Because Rhode Island’s future is one worth fighting for."
Delivering the R.I. GOP response, R.I. House Minority Leader Michael W. Chippendale said that years of Democrat-led state government has led to the very issues now vexing household budgets, with many residents now feeling "like they are swimming upstream."
While Rhode Island’s state budget ballooned from roughly $4.5 billion in 2000 to more than $14 billion today, over the same period real household income grew between 25% to 30%, average home prices have nearly tripled, and the government tab for private consultants across all departments has grown four-fold to more than $600 million.
“Democrat majorities have been approving annual budgets for decades that grow faster than the paychecks of the people paying for them," Chippendale said.
These outcomes aren’t the result of the Trump administration, Chippendale said, but rather “the types of policies we heard about from the governor tonight.”
“If spending alone was an actual solution, as our Democratic friends seem to believe it is, Rhode Island would be thriving. But it simply isn’t,” he said. “Government spending should not be allowed to grow faster than the ability of the people to pay for it.”
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
