Governor McKee Signs FY24 RI Ready Budget, Positions Rhode Island to Maintain Economic Momentum

Published on Friday, June 16, 2023

Budget includes dozens of Governor’s RI Ready proposals to make key investments in housing, economy, child care, and local businesses

PROVIDENCE, RI – Governor Dan McKee today signed the FY24 RI Ready budget, making key investments to ensure Rhode Island is ready to build on its economic momentum. The FY24 budget focuses on maintaining a trend of fiscal responsibility with no broad-based tax increases, while making key investments to strengthen K-12 education, bolster Rhode Island’s economy, increase access to good-paying jobs, and provide relief to local businesses.

“I’m proud of the budget that I signed into law today,” said Governor McKee. “I thank the Speaker, Senate President and the General Assembly for including the majority of initiatives that I proposed in January. This budget makes both short- and long-term investments that will help our state continue to thrive while at the same time maintaining fiscally responsibility.”

The RI Ready budget also continues to put the state on a path to meet its RI2030 goals: raising incomes for all Rhode Islanders, improving educational outcomes, and creating a healthier state.

"This budget includes several important priorities of the Long-Term Care Coordinating Council and the Small Business Advocacy Council, such as funds for accessible, affordable housing and tax relief for local businesses,” said Lieutenant Governor Sabina Matos. “I am grateful to Governor McKee, Speaker Shekarchi, Senate President Ruggerio, and all our state legislators for their work on developing a smart budget that meets the most pressing needs faced by everyday Rhode Islanders."

“This budget supports Rhode Islanders’ needs while responsibly preparing for our future. We worked hard, in collaboration with Governor McKee and our colleagues in the Senate to identify the most effective ways we can direct the funding 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-District 23, Warwick).

“This is a good and responsible budget for Rhode Island, and I am extremely proud that it includes many of the Senate’s top priorities. With this budget, we are addressing many critical areas of need, providing meaningful relief for Rhode Islanders, making essential investments in our future, and ensuring our state is on firm financial footing,” said Senate President Dominick J. Ruggerio (D-Dist. 4, North Providence, Providence).

“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,” said House Finance Committee Chairman Marvin L. Abney (D-Dist. 73, Newport, Middletown).

“Today we are passing a sound, innovative, and compassionate budget that helps Rhode Islanders now and positions our state for strong fiscal health in the future. We’re putting our resources where they are most needed – helping small businesses with relief from the tangible tax, preserving and expanding important programs for early childhood, and supporting a wide variety of initiatives to tackle the housing crisis – while also guarding our future with a new supplemental rainy day fund. This budget is the result of months of hard work by the Senate and House leaders, our two finance committees and staffs, and the Governor’s administration with the input of countless government leaders, advocates and concerned citizens, and it reflects the effort and cooperation that went into it,” said Senate Finance Chairman Louis P. DiPalma (D-Dist. 12, Middletown, Little Compton, Newport, Tiverton).

Key elements of the FY24 budget include:

Addressing the Housing Crisis

  • Creating a Statewide Low Income Housing Tax Credit (LIHTC) Program: Provides a tax incentive for developers to expand subsidized housing options for low-income households. Elsewhere in the Northeast, state LIHTC investments have proved to leverage additional federal resources and successfully close financing gaps needed to finalize development proposals and get shovels in the ground for new housing production. The new program will award tax benefits to developers through a competitive process and will be capped at $30 million annually.
  • Expanding Shelter Capacity: Adds $30 million to expand shelter capacity to better meet the needs of individuals experiencing homelessness.
  • Sparking Housing Development: Establishes a priority projects fund for competitive grants to address priority housing developments. Potential uses of this funding include permanent supportive housing for vulnerable Rhode Islanders or housing for special populations such as seniors, veterans, or people with disabilities.
  • Building a Robust Housing Department: Builds on the Governor’s goal to create a robust Housing Department to support the implementation of last year’s historic $250 million housing investment by adding 21 FTEs to the newly created Department of Housing.

Investing in Our Economy and Supporting Local Businesses

  • Growing our Life Sciences Economy: Makes a $45 million investment in the life sciences sector which includes the development of wet lab incubator spaces. Establishes a quasi-public agency to coordinate life sciences investments.
  • Providing Tangible Tax Relief: Establishes a statewide exemption of $50,000, with reimbursement to cities and towns starting in FY25. Municipalities may not increase tangible tax rates.
  • Ending the Litter Tax for Local Businesses: Provides relief to local businesses by ending the litter tax. Under the current structure, the nearly $1 million collected from this tax is not directed to support litter or environmental initiatives. Instead, the budget funds a specific anti-litter initiative at the Department of Environmental Management.
  • Stabilizing the Workers Compensation Fund: Directs more than $4 million into the Workers Compensation Fund to prevent an increase in the premiums paid by Rhode Island businesses.
  • Improving Access to Capital for Small Businesses: Adds $2.6 million to the Small Business Assistance Program which connects businesses struggling to obtain lines of credit with community-based lenders.
  • Strengthening Rhode Island’s Workforce: Expands the Wavemaker Fellowship student loan forgiveness program to include teachers.
  • Delivering Utilities Rate Relief: Provides Rhode Islanders with a rebate for the 4 percent gross receipts tax on their electric bills and 3 percent gross receipts tax on their natural gas bills. This will result in $35 million in total relief for families and businesses.

Strengthening Education, Investing in Child Care

  • Preserving Crucial Pre-K Seats: Invests $7 million to preserve 800 Pre-K seats funded by an expiring federal grant and $1.3 million to prepare 35 new classrooms for the 2024-2025 school year.
  • Increasing K-12 Funding: Increases year over year K-12 education funding by $57.8 million which includes fully funding the multilingual learner categorical and the special education categorical.
  • Going All-in on Higher Ed: Establishes a Cybersecurity Institute at Rhode Island College and creates the Hope Scholarship program.
  • Provides $5 million in one-time funding for the Fresh Start Scholarship that will provide scholarships to adult students with some credits, but no degree, with a focus on students who left the Community College of Rhode Island before completing a degree.
  • Breaking Down Barriers to Higher Ed and Workforce Training: Provides support to the RI Reconnect program in the Office of the Postsecondary Commissioner (OPC), using $8 million to improve postsecondary degree and credential attainment among underserved, working-age Rhode Islanders. OPC staff will work with students to address barriers to education and workforce training completion, particularly among communities of color and in Qualified Census Tracks to enhance the economic stability of working-age Rhode Islanders.
  • Investing in the University of Rhode Island (URI): Continues the Governor’s commitment to addressing historic underfunding at URI. Invests $20 million for URI to implement a permanent water filtration solution to reduce PFAS concentrations. Invests $72.9 million for asset protection projects at URI. Invests $65.8 million to renovate the Meade Stadium East Grandstands, the Slade Outdoor Track, and other athletic complexes.

Fixing Rhode Island’s Infrastructure, Combatting Climate Change

  • Creating the RI Ready Municipal Road Program: Creates a $20 million matching grant program to help cities and towns make crucial infrastructure improvements.
  • Leveraging State Funds to Improve Rhode Island’s Infrastructure: Leverages $87.8 million in state funding to unlock additional federal dollars to improve Rhode Island’s roads and bridges. Leverages $28.5 million in state funding to unlock additional federal dollars for clean drinking water initiatives.
  • Addressing Climate Change: Provides funding to the Executive Climate Change Coordinating Council (EC4) to implement the Act on Climate efforts.
  • Investing in Energy Efficiency: Extends the State Energy Efficiency Program and the Renewable Energy Fund through the end of 2030; requires the Office of Energy Resources to issue a request for proposals for a potential administrator of the State Energy Efficiency Programs between 2025-2030.

Other Initiatives Funded in the RI Ready Budget

  • Increasing the Earned Income Tax Credit (EITC): Increases the EITC from 15 percent of federal amount to 16 percent.
  • Strengthening Rhode Island’s Rainy Day Fund: Contributes $55 million (approximately 1 percent of general revenues) to a supplementary Rainy Day Fund. Rhode Island’s current Rainy Day Fund is set to 5 percent of general revenues and is significantly lower than the 15 percent cap used by Massachusetts and Connecticut. A larger fund balance will better position Rhode Island to weather economic downturns and will be viewed favorably by ratings agencies.