Governor Daniel J. McKee’s 2023 State of the State Address

Published on Tuesday, January 17, 2023

January 17, 2023

As Prepared for Delivery

Mister Speaker, Mister President, distinguished members of the Assembly, members of our Congressional Delegation, General Officers, Chief Justice and members of the Judiciary, municipal leaders, members of my cabinet and Rhode Islanders watching at home – good evening.

Just two weeks ago, I had the honor of being sworn in for my first full term as Governor. Governor of a State I love.

During my inaugural address, I told a story about a family looking to move to a new community – one that was kind and caring just like the community they were coming from. That story showed us a simple truth: You often get what you look for. After that story, I said that the majority of Rhode Islanders want to look for the best in their state and in their fellow Rhode Islanders.

That fictional story was told by Hall of Fame basketball coach, John Wooden, someone I have admired since I was growing up with my brothers and sisters in Cumberland. Coach Wooden’s story reminded me of another story from October 2021 – when a flight landed at our airport with some of the first Afghan refugee families arriving in Rhode Island.

Eagerly waiting at the airport was Jonathan – a Rhode Islander who works at Providence College. Jonathan had spent years communicating with a man named Amin, an Afghan translator for the U.S. military, but they had never met in person. Thanks to Jonathan’s help, Amin and his wife and children were able to flee Afghanistan. They are now here in Rhode Island and part of our community.

To Jonathan and Amin – who are both with us here tonight – on behalf of the State of Rhode Island, I want to thank you for being an example of the best of our state.

I also used my inaugural address to highlight that it is Rhode Island’s time, our moment, our turn. That’s why, as I stand here tonight, I’m proud to say that Rhode Island is ready.

We’re ready to raise incomes for families across our state. We’re ready to improve education outcomes for our students. We’re ready to build a healthier Rhode Island. And we’re ready to ensure that everyone benefits from this work.

With $1.2 billion in federal funding flowing into projects across our state – we have an opportunity right now like we’ve never had before.  

Over the past two years, we’ve laid a strong foundation by not only making short-term investments in our state’s families, small businesses, and workforce – but we’ve also put into place strategies and investments to ensure Rhode Island’s long-term economic success.

As I look out at this audience tonight, I am more optimistic than ever about Rhode Island’s future. And I hope you feel the same way too. I can say this with confidence because of what we’ve already achieved together, as one team.

We achieved the lowest unemployment rate in our state’s history, and our economic recovery was ranked the best in New England. Rhode Island has momentum – I never get tired of saying that. But what I’m most excited about – even more than the progress we’ve made – is the potential that’s still out there for us to reach.

To get Rhode Island ready to reach our potential, we focused on aligning our state behind a vision for how we would emerge from the pandemic and what we want to become in the years ahead. And to get us started, our Administration did what we pledged to do from day one: we brought people together.

We engaged in conversations with residents, municipal leaders, members of the General Assembly, nonprofits, and community groups to create Rhode Island 2030 – our state’s master plan. This is your plan, an interactive working document, and I encourage you to visit RI2030.com to take a look at our goals for the issues that matter most to Rhode Island families – housing, education, health, climate change, jobs, and much more.

These recommendations helped guide our budget last year and how we invested our $1.2 billion in American Rescue Plan funds. Whenever I talk about this federal funding, I have to take a moment to thank our Congressional Delegation. Rhode Island is so fortunate to have Senators Reed and Whitehouse and Congressmen Cicilline and Magaziner. And I also want to recognize former Congressman Jim Langevin for his service.

We’re using these once-in-a-lifetime funds to build housing, stabilize the childcare workforce, support small businesses, create capacity for the offshore wind industry, and train Rhode Islanders to succeed in good-paying jobs. And these dollars are already being put to work.

The budget that this General Assembly passed was truly historic – but passing that budget was just one of the many successes we had in the last session. I want to again thank the Speaker and Senate President for their incredible partnership during my first two years in office.

We worked together to pass and sign legislation to tackle climate change and put Rhode Island on a path to 100 percent renewable energy by 2033. We worked together to pass and sign common sense gun safety legislation. Our work in this area is not done – let’s follow the lead of other states and send a bill to my desk that bans the sale of assault style weapons. I’m ready to sign that bill into law.

Together, we made it a priority to Cover All Kids in Medicaid and extend coverage for new moms. And let's not forget – with one of the largest surpluses in the history of our state – we provided over $120 million in tax relief to Rhode Islanders. That’s in addition to the $100 million of relief on energy bills our Administration provided to Rhode Islanders.

As part of that relief, 110,000 child tax rebate checks went out to parents like Marisa and her husband who are here with their children tonight. I want to recognize Marisa for advocating for this relief. Marisa, thank you.

As part of our tax relief plan last year, Rhode Islanders no longer have to be burdened by a car tax bill in their mailboxes because, together, we eliminated it. Our seniors received an additional $4 million in property tax relief. Rhode Island Veterans, like Dora Vasquez-Hellner and her husband Dave who are here tonight, no longer have to pay the state tax on their military service pensions – because we ended that tax for good. Dora and Dave – thank you both for your service and for being here to represent Rhode Island’s Veteran community.

While this tax relief was historic – we know that Rhode Islanders are still dealing with rising prices at the grocery store, on utility bills, and at the gas pump. Gas prices are falling but not fast enough. And we know families have had to make difficult financial decisions because their dollar isn’t stretching as far as it used to.

That’s why, the budget I’ll submit to the General Assembly will propose a broad tax relief plan to help Rhode Islanders navigate inflationary pressures and make our state a more competitive place to do business.  

Here’s what that plan will look like – first, let’s reduce Rhode Island’s sales tax. Right now, Rhode Island is tied for the second-highest state sales tax in the country. We’re ready to change that. Rhode Island’s sales tax was increased during the banking crisis with the promise that it would be reduced when we were back on solid financial ground. That promise was never kept. Now is the time to make it right.

We’re going to propose a fiscally-responsible, incremental reduction of the sales tax. Let’s start by reducing our sales tax to 6.85 percent – approximately $35 million a year of long overdue relief – and if we continue to have discipline in our budgets and get to the same rate as Massachusetts. we would save Rhode Islanders $173 million annually.

Second, let’s stop the scheduled gas tax increase. Rhode Island law requires us to implement a three cent increase on the gas tax starting July 1. The budget I'll propose will stop this increase and provide nearly $25 million of gas tax relief to Rhode Islanders over the next two years.

Third, let’s give Rhode Islanders a tax rebate for the gross receipts tax on their energy bills this winter. This will result in over $35 million in relief for Rhode Island families and businesses.

Fourth, did you know that businesses across our state are required to pay a so-called litter tax? Here’s the kicker – the fees collected from this tax don’t even go towards cleaning up litter, and paying this tax is a big nuisance for small businesses. We need to improve our small business climate by doing away with fees like this. Let’s not only eliminate this tax, but let's also fund an initiative to tackle the litter on our streets, beaches and recreational areas.

In place of the litter tax, we’re going to create a dedicated line item in the budget to Keep Rhody Litter Free – this is a priority for our First Lady Susan McKee, and I encourage Rhode Islanders to join our effort to get rid of litter by visiting: LitterFree.RI.gov and take the pledge.

Our budget will also propose reducing the dreaded corporate minimum tax which affects our state’s smallest businesses the most. I know we have some small businesses in the gallery here tonight – I want to thank you and all of our small businesses for how you stepped up during the pandemic and continued to advocate strongly for the small business community.

As a former mayor, I know how important fiscal responsibility is. That’s why, in addition to having no broad-based tax increases, my budget will focus on maintaining a trend of fiscal responsibility.

We will propose increasing the state’s rainy-day fund as well as setting aside money for future obligations to reduce our reliance on debt.

Potholes are a problem and we all know that they exist. That’s why, I’m putting on my former municipal leader hat and proposing that we launch a new matching grant program to help our cities and towns repair local roads while we continue to do the work to repair state roads across Rhode Island, just like we did on 295, which I drive on every day.

Here’s the bottom line: the budget I’ll put forward this week will continue providing economic relief for Rhode Island families, invest in Rhode Island’s future, and continue making progress toward our Rhode Island 2030 goals.

Housing is one of the most critical issues facing Rhode Island today and over the next decade. That’s why our Administration proposed a once-in-a-generation, quarter-billion dollar investment in creating and supporting more housing at all income levels. And I want to thank the General Assembly for acting on that proposal last year. Since that historic investment was passed, our Administration has worked to put that money into action.

Right now, we have over $90 million in funding from the historic $250 million available for developers. And 39 projects have already been funded that are anticipated to create or preserve over 1,000 units of affordable housing. In addition, the General Assembly created a standalone Department of Housing that went into effect on January 1 of this year.

I am committed to building a capable Department of Housing that is up to the challenge and opportunity that this moment represents. My budget will create a robust state agency, with additional funding to help our unsheltered population and set them on a pathway to housing.

But one person, one department, or even one entire Administration can’t address this problem alone.

Our General Assembly has a role to play. Our cities and towns have a role to play. Developers have a role to play. Nonprofits and foundations have a role to play. Our institutions of higher learning have a role to play. Labor has a role to play. Our business community has a role to play. We must all come together and work as one team if we’re serious about addressing this problem.

Our economic future depends on creating room for population growth and upon providing cost-accessible homes to our workforce. We need to keep our children here in Rhode Island – not price them out of our state. And we need to make homes affordable to families of every income level – including families who are especially cost burdened.

Let’s work together to set and, over time, achieve meaningful but realistic goals for housing production and affordability. I know we can do it – and we will. I don’t believe there is one community in our state that doesn’t want to see this happen.

Now, there’s an old story that I want to share about a painter who sets out to paint the perfect sunrise. He wakes up early, packs up his pickup truck with his canvas, his easel, and his paint brushes and heads to the beach to wait for the sunrise. When it finally happens, he thinks to himself – this sunrise is beautiful – but maybe tomorrow will be better.

So, he packs up his things and goes back home. The next day, he wakes up early and goes back to the beach to wait for the sunrise. As the sun is rising, he again thinks to himself – maybe tomorrow’s sunrise will be even better than today.

When it comes to fixing Rhode Island’s education system, we can’t be like that painter. Instead of waiting for what we think might be better day in the future, we must stay the course, double down on our efforts, and tackle the challenges facing Rhode Island’s education system today.

Rhode Island, we’re ready to put the paintbrush to the canvas, and we’ll give a brush to anyone who wants to do the work with us. But when it comes time for change in education, we’ve waited long enough.

This education movement must happen in all 39 cities and towns and Commissioner Infante-Green is ready to work with each community to raise student achievement. When the State manages school districts it is not a nonchalant exercise. To be successful it must be intentional, it must be supported by state and local leaders. It must be supported by our teachers and union leadership, and it must be supported by parents and the community. Most importantly – it is not forever.

The state has intervened in two local school districts. One for too long and one for not long enough to get the job done. I want to recognize Providence Superintendent Dr. Javier Montanez who is already grabbing his paintbrush and doing the work to deliver results for Providence students. Javier, I know you’re watching tonight at home, thank you for stepping up.

Back in 2019, the Hopkins Report brought to light many issues in the Providence Public School system, including the condition of the buildings which were described with phrases like “dire condition.” Around that same time, there were $900 million worth of building needs for Providence Public Schools – with only $160 million available to fix this problem.

I have personally had my feet on the ground in every single Providence Public School and I’ve seen firsthand that the buildings are in a better condition – we’re no longer talking about all the same physical spaces that were described in the Hopkins Report. This is good news, and the work continues.

In Providence there are already eight new or like new construction projects in progress with additional new schools in the early planning stages. And I’m proud to say that soon, Providence will have 50 percent of its students in new facilities – a tenfold increase from 2017. This is progress and we’re going to stay the course.

And this isn’t just happening in Providence. Statewide, 22 major new school projects are currently under design or construction. I want to thank the leadership at the local level – our school committees and city and town councils – for helping us make this happen. Our students deserve this progress, and we’re using the $300 million that was approved last year by the voters and supplemented in our budget to deliver for them.

We know that the pandemic had a dramatic impact on our children’s education. And while we’re glad that our kids got back into the classroom as quickly and as safely as possible – we know that there are years of recovery ahead.

For the last three years, the state budget has held communities harmless for student enrollment changes during the pandemic. Since the pandemic, overall public-school enrollment has declined by about 5,700 students. If we as a state decide to revert to the regular school funding formula, this would result in a loss of approximately $30 million to traditional public schools.

It is time for us to make a targeted modification to the funding formula to improve outcomes and support students with greater needs. The budget that I will send to the General Assembly will invest an additional $57 million in K-12 education and another $4 million for out-of-school learning programs.

We will fully fund our multilingual learners and high-cost special education to address the needs of these students. And within the first 100 days of my full term, we will be outlining a plan to reach Massachusetts education levels by 2030. And as always, to achieve this, we will work with anyone who is willing to do the work both in and outside the classroom.

Some economists say that our economy may struggle in the coming months and years. That may or may not be true – but either way, Rhode Island will be ready. You’ve heard me say it before: the best way to lessen the impact of an economic downturn is to invest in J-O-B-S, good-paying jobs.

That’s why we’re making key investments in Pawtucket, in Providence, in Galilee – all around the state. We want to build on our momentum and do everything we can to make Rhode Island stronger economically. To that end, our administration has prepared the most significant capital budget in the history of the State.

The budget surplus and economic stimulus funding from the federal government has put us in a position to make a record-setting investment in Rhode Island and in the people of Rhode Island. In addition to economic development projects happening across the state through public and private partnerships over the next several years, we will also have 137 state infrastructure projects totaling nearly $2 billion moving forward.

But having these funds budgeted is not enough and it’s not enough to just have a lot of good ideas in the pipeline – we need to get these projects completed quicker. Accordingly, I have directed my staff to implement an accelerated project delivery strategy that will engage the private sector more comprehensively. This will result in job creation, operationalizing improved facilities, and a stronger economy.

We are making immediate investments to shore up the long-term economic success of our state. For example, this past year we broke ground on a new state health lab and life science facility in Providence’s Innovation District – thank you again to our Congressional Delegation for securing that funding.

We’ve always talked about Rhode Island being a hub of bioscience activity and over the last few years we’ve laid the foundation for this growing sector. It’s time to double down and make a major investment in Rhode Island’s life science sector. My budget will reflect this investment and I look forward to working with the Speaker on this key priority that we both share.

So Rhode Island – it is our time. We have momentum and if we keep up the tremendous determination we displayed during the pandemic, we will be ready to embrace the significant opportunity ahead.

We have the tools. And with all of us working together – we have the team to be successful. Let’s go write our state’s next chapter. Rhode Island is ready

Thank you.