PROVIDENCE – Striking a note of optimism in the face of future deficits and the absence of unprecedented federal dollars in recent years, Gov. Daniel J. McKee on Tuesday outlined several key policy and budgetary priorities for the 2025 fiscal year, including cutting red tape, shoring up Rhode Island's struggling health care system and raising individual income levels by $20,000 by 2030.
During his third State of the State address before the General Assembly in the House chamber, McKee called on lawmakers to craft a budget “without raising any broad-based taxes" and proposed reducing the minimum corporate tax to $350 from $400, a levy that “impacts our state’s smallest businesses the most,” and eliminating six “annoying fees,” including those on real estate brokers and liquor manufacturers.
The administration is set to release its official 2025 budget proposal on Jan. 18. McKee said within 100 days the administration will release a detailed plan for raising incomes, crafted with the help of Rhode Island League of Cities and Towns Executive Director Ernie Almonte and Bryant University economist and professor Edinaldo Tebaldi.
McKee also called for several statewide bond referendums to be placed before voters on the November ballot, including for a State Archive and History Center to display Rhode Island’s historical documents; a new life science school at the University of Rhode Island; a cybersecurity bond to grow Rhode Island College’s Institute for Cybersecurity and Emerging Technologies; and an additional $100 million bond for housing construction.
If approved by voters, McKee said the housing bond would create needed inventory, spur job creation and "help put young people on a path to homeownership in our state."
To assist in the administration's goal of having Rhode Island students from kindergarten through grade 12 reach Massachusetts-level test scores by 2030, McKee's proposal will include $15 million for math and English-language arts coaching for students and professional development for educators.
"We’re serious about improving RICAS [Rhode Island Comprehensive Assessment System] scores and closing the gap between Rhode Island and Massachusetts by 2030," McKee said. "Rhode Island began to move the needle this year and we want to ensure that progress continues."
McKee's budget will earmark $5 million toward the R.I. Department of Transportation’s Municipal Road Fund Program, and will include a more than $135 million investment to increase long-stagnant health care provider rates, while fully funding the Early Intervention rate increases recommended by the R.I. Office of the Health Insurance Commissioner and the R.I. Executive Office of Health and Human Services.
McKee said he also plans to issue an undefined executive order focused on “improving Rhode Island’s health care systems and planning work to ensure we have access to an efficient and effective health care delivery system aligned with our state’s needs.”
Calling on the General Assembly to balance the budget, McKee vowed to "continue the fiscal discipline" and "budget within our means ... so we won’t be forced to revise our budget and make disruptive midyear cuts.
“Rhode Island’s days of being an underdog are over,” McKee said.
Delivering the R.I. GOP response was House Minority Leader Michael W. Chippendale, who lambasted McKee’s polices for what he said were driving up the costs in areas the administration claims it seeks to address, from housing and education to energy, infrastructure and health care.
Citing data from the R.I. Department of Labor and Training, Chippendale said that since 2010, the state’s population has decreased in every age group under 45. And according to the U.S. Bureau of Labor Statistics, Rhode Island was the only state in the nation to see a net loss in average salaries in 2023.
Electricity costs have risen 46% over the previous 12 years, he said, and have jumped 24% for business owners.
“That is simply not how economics works,” Chippendale said. “Rhode Island Republicans envision a future where we lead by reducing dependency on government, properly supporting education, and empowering our citizens to create prosperity. These things are possible with earnest commitment.”
(UPDATE adds the last four paragraphs with comments from House Minority Leader Michael W. Chippendale.)
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.