Governor McKee Submits Plan for Rhode Island Rebounds: Immediate Investments in Rhode Island’s Families, Workers and Small Businesses

Published on Thursday, October 07, 2021

Budget amendment will highlight a 10 percent investment of the State’s $1.13 billion American Rescue Plan State Fiscal Recovery Funds to make a down payment on Rhode Island’s economic comeback

A 10 percent down payment allocation would still leave the State $1 billion in federal funding for long-term investments

“We’re writing Rhode Island’s next chapter now,” said Governor Dan McKee. “National assessments show that Rhode Island is, for once, a leading state as we emerge from the COVID-19 pandemic. If we invest soon and invest wisely, we can continue to lead rather than follow, creating opportunities for Rhode Islanders as a result. Rhode Island Rebounds represents a crucial, initial, short-term investment in Rhode Island’s families, workers and small businesses to keep our economic comeback going strong.”

“We have a once-in-a-lifetime opportunity to make a real investment in our state’s future,” said Lieutenant Governor Sabina Matos. “This investment in affordable housing, in small businesses, in tourism, and our child care workforce - will put Rhode Island on a path forward as we have never seen. The future of our great state is bright, and I look forward to the work ahead to build a Rhode Island that is equitable, inclusive, and representative of the diverse communities in each of our 39 cities and towns.”

“The State is navigating this crisis knowing that the wellbeing of every Rhode Island family, business and community depends on the quality and characteristics of every transaction and interaction,” said Jim Thorsen, Director of the Department of Administration. “Governor McKee’s down payment proposal is going to make a big difference as we work to build an economy that is more resilient, equitable, and prosperous for all.” 

Investing in the Future of our Small Businesses and Impacted Industries - $32 million

Rhode Island’s small businesses have been hit hard by the COVID-19 pandemic, and while both the federal and state government have provided a range of small business resources and supports, there are clear gaps and ongoing needs – especially as variants pose continued challenges to consumer confidence.

The Governor’s budget amendment proposes investing $32 million in the future of our small businesses and impacted industries. This includes $12.5 million for direct grants to provide immediate financial support to small businesses affected by the pandemic with the aim of delivering 20 percent of these funds to minority owned businesses, $10.5 million for technical assistance to support businesses in capacity building and upgrading technical infrastructure, $7.5 million for increasing outdoor activities, maintaining clean and safe business districts, and for public health improvements like HEPA filters and ventilation, and $1.5 million for outreach, reporting, compliance, and administration.

The State’s aggressive vaccination and public health responses have positioned Rhode Island as a leader as the country recovers from the pandemic. The recovery has been strong for many Rhode Island businesses and workers. In fact, the State reported a 7.5 percent increase in real gross domestic product in the second quarter of 2021, exceeding the growth rates of the United States and the New England region. Rhode Island has also ranked among the top 10 states nationally and led the Northeast in Moody’s Back-to-Normal economic recovery index for the last several months. In the most recent rankings, Rhode Island ranked fourth in the nation and first in the region. However, we know that there remain significant needs, especially for hard-hit industries that have been disrupted and as businesses gear up for the fall and winter as more activities go back indoors.

“As we emerge from the COVID crisis, many of our small businesses are still struggling — or are concerned that the colder months will bring renewed hardship,” said Rhode Island Commerce Secretary Stefan Pryor. “We need to make near-term investments in order to protect and support our small businesses and hardest hit industries. We thank Governor McKee for advancing our Administration’s down payment proposal for this purpose – and in order to address critical needs in the areas of child care and housing. We look forward to continuing our collaboration with General Assembly leaders on these subjects.” 

Targeting Support for the Hard-Hit Tourism, Hospitality and Events Industries - $13 million

The Governor’s budget amendment invests $13 million in federal funds from the state’s allocation of the State Fiscal Recovery Funds to support the recovery of the travel, tourism, and events industries. Of this amount, $8 million will provide direct grants to support tourism, hospitality/travel, sports/recreation, arts/cultural and event businesses that either could not take advantage of previous opportunities for federal funding or require additional assistance. Another $3 million will be used to fund subawards to intermediaries (including municipalities, chambers of commerce, business improvement districts, etc.) for placemaking initiatives (e.g., public art installations, main street improvements, public or co-shared dining spaces, outdoor performance venues, etc.), existing catalytic events, and the development of COVID-safe programming. The remaining $2 million will fund tourism marketing to be coordinated with the tourism regions and the Rhode Island Airport Corporation.

Investing in our Children, Families and Social Supports - $38.5 million

Addressing the Child Care Workforce Crisis and Supporting New Family Child Care Program Providers

High-quality, safe child care is essential to the wellbeing of children and their families. Unfortunately, the child care industry has been hit hard by the pandemic and is struggling to attract and retain workers due to low wages driven by a longstanding lack of public investment. Child care educators and providers continue to do heroic work supporting young children and ensuring families can re-engage with the economy, and the staffing crisis threatens child care’s ability to provide enough capacity for every family needing a child care seat. The Governor’s down payment plan calls for investing $13 million to provide retention bonuses to supplement baseline wages for over 8,200 childcare workers, as well as assistance to new family child care providers entering a market that needs expanded capacity. Specifically, the Governor recommends $12.7 million to provide retention bonuses of $1,000 per child care educator every six months, up to $2,000 annually per recipient to full- and part-time staff of state-licensed child care providers in FY 2022. These bonuses are intended to increase attraction and retention of staff in the child care field as well as recognize the ongoing efforts of this frontline workforce. The remaining $300,000 would provide startup grants to cover some initial costs and in-depth technical assistance to providers seeking to open new family child care sites. This investment will help ensure more capacity in child care for families and stabilize the child care sector, which in turn will benefit the economy as a whole.

“Governor McKee’s down payment proposal invests directly in the early education and direct care workforce,” said Womazetta Jones, Secretary of the Executive Office of Health and Human Services. “This is a piece of our larger health and human services investment strategy, and it is the piece that needs to be implemented now as health and human services providers continue their response to COVID-19 and its aftereffects. Working as an early childhood educator, social worker, or direct care staffer is a high-skill, but unfairly low-wage job. The majority of this workforce is made up of women – and many are women of color. Additionally, all of our children and families deserve high-quality care options in their communities that meet their cultural and linguistic needs. This is an equity issue.”

Supporting DCYF Workforce Stabilization

Additionally, the Governor recommends investing $12.5 million in federal funds for the purpose of providing workforce stabilization payments to the direct care and supporting direct care staff of the service provider organizations contracted by the Department of Children, Youth, and Families (DCYF). These funds will provide for one-time (FY 2022 only) supplemental wage payments to recognize the extraordinary demands placed upon these essential workers during the pandemic as well as to incentivize retention and recruitment. Without investment in this vital workforce, children in DCYF care may not have access to the services and supports they need due to staffing shortages. There are currently 37 DCYF-contracted service provider organizations employing up to 1,500 direct care workers. Only employees earning less than $75,000 would be eligible for supplemental wages. The proposal provides for a payment equal to $694.50 per month per eligible staff member and allows eligible employees to receive a full 12 months of payments including retroactive payments to the beginning of FY 2022. As a result of this investment, the State anticipates stabilized capacity in DCYF-contracted services to address the needs of children and ensure the right placement options are available at the right times.

Investing in Pediatric Healthcare Recovery

As a result of the public health emergency, many children could not access regular preventative primary care. This has led to delays in routine vaccinations for children, developmental screenings, lead screenings, and other vital preventative care that ensures healthy development. Data from the last year shows racial disparities in access to pediatric care, which must be addressed. In addition, the trauma of the pandemic has created and exacerbated behavioral health needs among children. Pediatric care is the front door to many services and supports to address children’s health and wellbeing, and if these needs go unaddressed, vital early development and health could be permanently impacted. Finally, as we approach likely authorization of COVID-19 vaccines for children under 12 years old, we want to make sure our pediatric practices have the resources to support that vaccination effort. This initiative will repeat the success of the CARES Act-funded pediatric programs to catch kids up on care. The Governor’s budget amendment provides $7.5 million in federal funds for the purpose of this pediatric relief programming. The funds will provide for stabilization grants and a pay-for-success program to pediatric primary care practices to retain staff, implement extended hours, conduct enhanced outreach, and bring on additional family supports, such as social workers, to address the crisis and ensure all families are caught up on care.

Supporting Early Intervention Recovery

Early Intervention provides essential early childhood development services that support healthy outcomes for children. Due to the pandemic, Early Intervention providers faced significant losses due to the current rates, and today are struggling to hire and retain the staff needed to provide services to all children needing Early Intervention programming. As of today, four of nine Early Intervention providers are closed to referrals. The Governor’s proposal invests $5.5 million in federal funds for the purpose of assisting Early Intervention providers to mitigate the economic impact of the pandemic, recruit and retain workers, avoid further closures, and provide continued services to children with developmental needs. Of the funds, $4.5 million would be used to provide immediate stabilization grants, and $1 million would provide performance-based bonuses. Stabilization grant award amounts would consider revenue losses in FY 2021 and FY 2022 and account for the increased cost of service delivery and workforce needs. Uses of this grant would include activities such as funding for staff salaries and bonuses, technology for outreach and engagement, and COVID-19 safety supplies. Performance bonuses would be based on targets/metrics that include retaining staff and reducing disparities in program engagement for Medicaid families and families of color. 

Investing in Affordable Housing and Housing Stability Supports - $29.5 million

Supporting Affordable Housing Production and Site Acquisition

Rhode Island is experiencing a housing crisis and while the State has taken major steps to address it during this past legislative session, more must be done. The Governor’s down payment plan would invest $15 million to incentivize the development and renovation of affordable housing. The investment would be targeted at assisting individuals with an income below 80 percent of area median income. Additionally, the Governor’s plan would invest $12 million for a property acquisition grant program. The funds would provide for a grant program administered by Rhode Island Housing that would finance the acquisition of properties for redevelopment as affordable and supportive housing. This initiative intends to increase the supply of quality affordable and supportive housing while strengthening our communities.

Promoting Housing Stability

Additionally, the Governor’s proposal would invest $1.5 million for housing stability, dedicated to expanded housing navigation, stabilization, and mental health services for families and individuals experiencing homelessness.

Building Capacity to Support Housing Production

The Governor’s proposal also requests $500,000 for the purpose of temporary contract staffing support at the Office of Housing and Community Development. The funds would provide for contract positions for an estimated six-month period focusing on areas such as research and data, stakeholder engagement, and a dedicated program director for homelessness programs.

Developing a Real Plan to Provide Affordable Broadband Internet for Every Rhode Island Family

The American Rescue Plan Act and the anticipated federal infrastructure package provide significant opportunities for broadband infrastructure investment. With that in mind, the Governor is proposing allocating $500,000 for broadband coordination and planning to lay the groundwork for thoughtful future, long-term investments. This initiative would allow the State to conduct mapping analysis, hire a broadband coordinator, and develop strategic planning to govern future investments. The nature of broadband infrastructure is inherently complex, and Rhode Island is already at a disadvantage relative to our peers in that the State lacks a centralized broadband plan. Immediate appropriation of these funds would allow for planning and coordination work to begin, so that future appropriations can be informed by adequate technical knowledge and an understanding of the current baseline.

“I want to thank Governor McKee for his leadership in identifying funding and strategies to meet the housing needs of our state,” said Carol Ventura, Executive Director of Rhode Island Housing. “These federal funds represent an exciting opportunity to make the kinds of long-term and strategic investments in housing that will move Rhode Island forward. We look forward to working with the Governor and the General Assembly to ensure that ARPA funds include investments to meet the state’s need for more affordable and permanent supportive housing.”

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