$14 BILLION DOLLARS APROVED FOR 2024 FISCAL YEAR
STATE HOUSE – The House Finance Committee has approved a $14 billion budget for the 2024 fiscal year that commits funding toward addressing the housing crisis, supports business development and makes education funding more equitable while limiting the use of one-time revenue to one-time expenditures.
The budget bill (2023-H 5200A) now goes to the full House of Representatives, which is slated to take it up June 9 at 2:30 p.m.
“Our goal with this budget is to support Rhode Islanders’ needs while responsibly preparing for our future. Our top priority, of course, is addressing our housing crisis, and we have worked hard, in collaboration with Governor McKee and our colleagues in the Senate, to identify the most effective ways we can direct the funding we have toward solutions that will help create more affordable housing access.
This budget also strengthens our efforts to provide educational opportunities in K-12 and higher education and supports businesses, working Rhode Islanders, retirees and those struggling to meet their families’ basic needs,” said House Speaker K. Joseph Shekarchi (D-Dist. 23, Warwick).
“At the same time, we are being realistic. Given the end of the federal funding related to the pandemic, we need to plan not only for next year, but for the following years, when we are not going to have the level of revenue, we’ve been fortunate enough to have for the past few years.
We are spending our remaining federal COVID funding and our available revenue on one-time investments rather than creating long-term commitments that we can’t sustain.
This budget is responsible, and I especially want to thank the House Finance Committee, led by Chairman Marvin Abney, for their hard work studying every element of it to get us where we are today.”
Said Chairman Abney (D-Dist. 73, Newport, Middletown), “This budget was carefully crafted so that our residents, particularly our most vulnerable, retain the supports and assistance that they and their families need, so that our businesses have the ability and opportunity to grow, and so that Rhode Island is situated to withstand a very possible financial downtown that will affect both our state and national economies.
Responsible, compassionate and thoughtful decisions were made to create a budget that will benefit all Rhode Islanders and this budget positions the state to be as competitive as possible into the future.”
For housing, a top priority of Speaker Shekarchi, the committee recommended an additional $39 million to support housing development.
That includes $27 million from State Fiscal Recovery funds for a new program that allows the Secretary of Housing to target projects, including $4 million for transit-oriented development and $4.3 million to be transferred to the Infrastructure Bank to support infrastructure necessary for housing development, such as road and utility connections.
The committee also approved, subject to an annual $30 million cap, a Low Income Housing Tax Credit (LIHTC) program. The LIHTC program would provide a tax incentive for developers to expand subsidized housing options for low-income households.
States that make LIHTC investments have been able to leverage additional federal resources and successfully close financing gaps needed to finalize development and start construction on new housing. The new program will award tax benefits to developers through a competitive process.
The committee also approved $45 million from State Fiscal Recovery funds to increase facility capacity for individuals experiencing homelessness, three times the current level. Along with the increased funding is a change that allows the money to be used for homelessness prevention and stabilization programs.
In addition, the committee fully funded Housing Secretary Stefan Pryor’s request for 21 FTEs for the State Housing Department.
The committee did not include a proposal submitted in the governor’s housing amendments authorizing eminent domain powers for the Department of Housing.
The budget includes a $45 million investment into the life sciences sector. Funds would be used for the development of much-needed wet lab incubator spaces and support grants, loans, business development and incubation services to grow this sector. The budget also creates a new quasi-public entity to coordinate life science initiatives.
To help working Rhode Islanders, the budget increases the earned income tax credit from the current 15% to 16% of the federal credit. The bill extends for another year rebates for the 4% gross receipts tax on electric bills and the 3% gross receipts tax on natural gas bills, for a total of $35 million in relief.
To support business, especially small business, the budget includes a $50,000 exemption for all businesses subject to the tangible tax, as proposed in legislation by Sen. Melissa Murray (D-Dist. 24, Woonsocket, North Smithfield) and Brandon T. Voas (D-Dist. 57, Cumberland, Central Falls).
The exemption completely wipes out the tangible tax — viewed as an administrative burden for small businesses and for the municipalities that collect it— for 75% of Rhode Island businesses. The state will reimburse municipalities for the lost revenue.
The budget does not include the governor’s proposal to reduce the sales tax and corporate minimum tax or pause a scheduled $0.03 increase in the gas tax.
The bill increases funding for the Rhode Island Food Bank to help address food insecurity by $3 million.
Currently, retired public employees in the state’s pension system receive Cost of Living Adjustments (COLAs) every four years.
The budget does not increase the amount retirees receive, but spaces the COLAs out each year so retirees receive smaller adjustments annually.
In addition, the budget requests the Rhode Island General Treasurer conduct a comprehensive review of the impact of the 2011 pension overhaul and different proposals to reform the system.
In response to the struggles of school districts, the budget reforms the school funding formula by modifying poverty measures, increasing funding for multi-language learners and phasing in funding decreases due to declining enrollment.
The budget allocates $20 million above the governor’s request, including $6.7 million more going to multi-language learners and $5.2 million more for high-cost special education.
The bill allocates $4 million to the governor’s Learn 365 RI program for after school learning.
In higher education, the bill includes the creation of the Hope Scholarship, a pilot program proposed by Senate Majority Leader Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln) and House Education Committee Chairman Joseph M. McNamara (D-Dist. 19, Warwick, Cranston), to cover cost of two years of tuition and mandatory fees for eligible students during their junior and senior years at Rhode Island College.
The proposal is intended to increase educational opportunities and success for students, and to improve workforce development.
The budget also funds the proposed Institute for Cybersecurity & Emerging Technologies at RIC to be led by former Congressman James Langevin.
The Institute will position Rhode Island to lead the region in developing highly skilled Cybersecurity professionals through certificate, bachelor, and master’s level courses and programming while attracting leading researchers and education professionals to develop practical and policy approaches to current Cybersecurity challenges.
The state’s struggling hospitals will receive a $14 million injection of funds, $5 million of which will come from general revenue and $9 million of which will come from federal funds.
The budget will provide 15 FTEs for the Attorney General’s staff, including fully funding a new cold case unit, paid for by settlement funds.
And in anticipation of slowing economic growth in future years, the budget allocates an additional $55 million to a supplemental rainy day fund.
The budget reflects the May revenue estimate that was $61.2 million lower than projected last November.