PROVIDENCE – Gov. Gina M. Raimondo said Tuesday she will consider changing her proposal for two years of free state tuition, to make it less expensive, in view of a $100 million shortfall in anticipated state revenue.
Raimondo has made the free tuition proposal a centerpiece of her budget proposal. But in recent weeks, new estimates have lowered the anticipated tax revenues for both the current fiscal year and the upcoming year.
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As a result, Raimondo said she would consider a number of options to soften the financial impact of the tuition plan, including a phased-in approach over several years, or introduction of means testing, which would tie the benefit to family income.
She still wants to get something done this year, she asserted Tuesday, in a breakfast meeting with reporters.
The proposal, as originally introduced by Raimondo in January, would cost $30 million on full enactment. It would make all Rhode Island students eligible for a state scholarship covering two years of undergraduate work at either University of Rhode Island, Rhode Island College or the Community College of Rhode Island, regardless of family income.
“We have to be careful in general right now about getting over our skis on any new expenditures that are very large,” she said. “I don’t know where [President] Trump is going to come out on the Affordable Care Act. I don’t know what’s going to happen with federal tax policy. There is a period of uncertainty.”
“Now isn’t the time to take any actions where we say later, we should have gone slower.”
It isn’t clear why the revenues have fallen, although Raimondo attributed it to a combination of potential factors, including corporations pushing profits off to later years, possibly in anticipation of lower federal taxes under Trump’s administration.
While corporate tax revenue typically makes up about 3.4 percent of total state revenue, it accounts for 57 percent of the projected shortfall, according to the state budget office.
More than 30 other states, including Massachusetts, Connecticut and Vermont, also have experienced drops in revenue, Raimondo told reporters.
“Obviously, it’s a challenging situation. And somewhat disappointing. Our revenues came in softer than we had anticipated, although not at all surprising because it’s happening all over the country.”
Raimondo said she is still considering how to adjust the Rhode Island Promise proposal, but wants to maintain it in a meaningful form. Seventy percent of middle class jobs in Rhode Island require more than a high school diploma, but only 40 percent of Rhode Islanders have the skills to obtain them, she said.
Mary MacDonald is a staff writer for the PBN.
