Governor McKee's budget favors monied interests, continues failed policies

"...there’s ‘no room’ in the budget for the things... like lowering the costs of prescriptions, helping with utility bills, or making sure families have a roof over their heads."

Rhode Island Governor Daniel McKee submitted his FY 2026 budget to the General Assembly on Thursday. This is the fifth budget McKee has submitted, but it’s important to note that the Governor’s budget is only a proposal. The General Assembly will use the Governor’s budget as a first draft and will make substantial changes to the document over the next months.

“Over the next five years, State revenues are expected to grow 2.5 percent each year … during the same time, State spending is expected to increase at 3.7 percent per year,” wrote Governor McKee. “My budget provides a roadmap to close an approximately $250 million deficit without broad-based tax increases... This budget will not just protect Rhode Island’s progress; it will protect the taxpayers of our State.”

Here’s the video briefing presented to reporters by the Office of Management and Budget (OMB):

Unfortunately, the taxpayers Governor McKee seems most interested in protecting are the wealthiest one percent.

“The Governor doesn’t have a funding problem, he has an allegiance problem. He says he’s committed to ‘progress and promise,’ but these proposals are more like ‘promise over progress,’” writes the Working Families Party New England Regional Director Georgia Hollister Isman. “He’s promised to protect the bank accounts of a handful of multi-millionaires, corporate CEOs, and their lobbyists – the people who Trump and Musk are about to make even richer.

“That promise comes with a clear cost: there’s ‘no room’ in the budget for the things that help working people, like lowering the costs of prescriptions, helping with utility bills, or making sure families have a roof over their heads. That’s not progress. Real progress for working people requires standing up to the millionaires and corporate lobbyists who refuse to help make the majority of Rhode Islanders’ lives a little easier. Until Governor McKee takes that stand, it’s clear whose side he’s on.”

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On the issue of transportation, the Governor has level-funded the Rhode Island Public Transit Authority (RIPTA), doing nothing to cover a $32.6 million deficit that will “force mass layoffs of employees and leave bus riders stranded across the state.”

The Save RIPTA Coalition writes:

“We, the SAVE RIPTA coalition, are extremely disappointed that Governor McKee’s proposed budget allocates no investment in RIPTA, leaving the agency with a $32.6 million deficit that will force mass layoffs of employees and leave bus riders stranded across the state.

“The Governors of Massachusetts and Pennsylvania recently made historic investments in public transportation to improve their economies, reduce carbon emissions, and demonstrate their commitments to social equity. But here in Rhode Island, Governor McKee is once again locked into a small-town mindset that cannot advance our state into the future, let alone meet his own administration’s goals of increasing household incomes and improving school attendance.

“Our communities deserve elected leaders who care about vital services that so many rely on to get to school, work, appointments and all their everyday needs. We look forward to working with the leadership in the General Assembly to identify funding sources to ensure RIPTA can meet the needs of Rhode Islanders, at this critical moment for our economy and climate.”

I will note that the Governor’s dismissal of RIPTA comes within a day of RIPTA announcing a new service line to the Amazon Fulfillment Center in Johnston. A Governor interested in serving millionaires might want to help get low-wage workers to their jobs, but then, transportation is a worker problem, not a Jeff Bezos problem.

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The Governor is proposing a tax on electric vehicles to replace the gas tax revenues that will be lost as electric cars take over the roads.

• The budget proposes a new registration fee for electric vehicles, in addition to current fees: $150 per year for a battery electric vehicle (BEV) and $75 per year for a plug-in hybrid fee (PHEV) (or $300 and $150 for a 2-year renewal).

• Fees are calibrated to the lost revenue from the gas tax, as the average driver contributes about $150 per year in the gas tax.

• The fee would be deposited in the Highway Maintenance Account to address transportation infrastructure needs, including RhodeRestore.

• Thirty-nine states, including Vermont and New Hampshire, charge an additional BEV fee, and 32 charge an additional PHEV fee.

The Governor’s staff emphasized that they didn’t believe the additional tax would slow the adoption of electric vehicles. However, the Governor’s budget “increases the per-pack cigarette tax by 50 cents to $5.00 as part of ongoing efforts to reduce tobacco use.”

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The Governor is also proposing an assault weapon ban to prohibit the future possession, purchase, sale, control, and manufacture of assault weapons, including a variety of semi-automatic guns and high-capacity/detachable magazines. Violations of these provisions would be punishable by up to 10 years imprisonment or fines up to $10,000.

The ban grandfathers previously obtained firearms, provided such weapons are registered with the appropriate police department. It further provides narrow exemptions for certain law enforcement, military, and retiree officers and retirees.

Asked how an assault weapon ban fits into the budget, representatives from the Governor’s Office of Management and Budget (OMB) noted that the proposed budget includes a sales tax exemption for gun safety goods, such as lock boxes, safes, and barrel/trigger locks. The ban also has healthcare cost implications, as injuries from guns can be devastating and expensive.

The Rhode Island Coalition Against Gun Violence (RICAGV) applauded the Governor’s efforts.

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As people digest and analyze the budget, more critiques will rise.

For instance, the Rhode Island Hospital Association of Rhode Island has decried a $25 million cut to hospital funding.

On Twitter, Senator Sam Bell notes that the Department of Housing had proposed $20.6 million for homelessness services. Governor McKee’s budget cut it to $4.4 million.

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The Governor provided the following list of his budget’s priorities in a press release. The entire budget is available here.

Investing in Education and Rhode Island’s Workforce

• Providing $2.5 million for Learn365RI municipal grants million to support high-quality, out-of-school-time programming, with an emphasis on critical skill development. This investment complements a $5 million investment in the FY 2025 budget.

• Increasing K-12 education aid by $43.4 million, including raising per-pupil funding to $13,322 – an increase of $705 from the enacted FY 2025 level.

• Launching Ready to Build, a signature, pre-apprenticeship pathway to the building trades at the Community College of Rhode Island with an investment of $800,000 in general revenue.

• Developing a Culinary Hospitality Hub at the Community College of Rhode Island’s Newport Campus to train the next generation of culinary and hospitality workers.

• Investing $6 million in general revenue and Jobs Development Funds to create 1,000 new work-based learning opportunities, allowing youth to gain work experience through programs such as Real Skills for Youth and the PrepareRI High School Internship.

• Allocating $2.9 million for the dual and concurrent enrollment programs, supported by resources from the Rhode Island Student Loan Authority. This level of support would sufficiently meet demand and make it possible for high school students to take postsecondary courses at an institution of higher education or at their high school.

• Providing an additional $10.6 million, or a 4 percent increase, across the University of Rhode Island, Rhode Island College, and the Community College of Rhode Island, of which $1.7 million supports services related to career readiness, career placement, and internships.

Upgrading Rhode Island’s Infrastructure

• Investing $6.5 million more in RhodeRestore, the Governor’s signature program, with the intent of making it a permanent program that provides cities and towns with a reliable funding source to defray the costs of transportation infrastructure projects. The budget proposal also includes a mechanism to make it easier for municipalities to unlock the new funding, which will be available through the Rhode Island Infrastructure Bank.

• Including new, two-year registration fees for battery electric vehicles ($300) and plug-in hybrid vehicles ($150) to maintain transportation infrastructure and support the RhodeRestore initiative. This helps ensure sufficient funding as gas tax revenue is projected to decline amid the rising adoption of electric and plug-in hybrid vehicles.

Promoting Health and Wellness Across Rhode Island

• Proposing an assault weapon ban to prohibit the future possession, purchase, sale, control, and manufacture of assault weapons. Additionally, the budget includes a sales tax exemption for gun safety goods, such as lock boxes and safes.

• Recommending that primary care provider rates are taken up by the Office of the Health Insurance Commissioner in its next review due in September 2027, an important step to creating a competitive primary care job market in Rhode Island.

• Investing $200,000 in general revenue, coupled with $200,000 in matching funds, for the Health Professional Loan Repayment Program. This specific investment offers loan repayment assistance for primary care providers and pediatricians who commit to practicing in Rhode Island’s federally designated health professional shortage areas for two years.

• Increasing funding for senior support services from $1.4 million to $1.6 million. This increased level of support is the equivalent of $8.19 per senior and represents continued progress toward the Governor’s goal of providing $10 per senior in senior support services. The funds are intended to be delivered as a formula allocation.

Creating Government Efficiencies

• Recommending the purchase of a large, commercial building in East Providence that offers a rare opportunity to co-locate multiple state agencies and achieve long-term savings.

• Closing the Minimum Security Facility and creating a new, separate, and secure unit within the Medium Security Facility, which offers more programming and job opportunities.

• Pursuing strategic cost-cutting measures across state agencies to ensure state government is living within its means. Measures include significantly reducing agency contractor expenses and eliminating telephone landlines for state employees who no longer use the devices.

• Allowing for several provisions to prevent waste, fraud, and abuse in state-administered programs, including four, new positions in Medicaid to identify Medicaid provider fraud. The net savings from this effort are projected to be $2.3 million in FY 2026.

Creating a Sustainable Funding Stream to Address Homelessness

• Including $15.7 million from multiple funding sources for homelessness initiatives, including two, new, sustainable funding sources.

• Applying the 5 percent hotel tax to whole-home short-term rentals to close a loophole. The hotel tax applies to hotels, motels, and partial home short-term rentals (i.e., renting a home in a house) – but not whole-home short-term rentals. The proposal is projected to generate $2.1 million over the last six months of Fiscal Year 2026 and $4.7 million in FY 2027.

• Increasing the real estate conveyance tax for properties above $800,000 from 0.92 percent to 1.25 percent. This change is projected to generate an additional $2.3 million in Fiscal Year 2026 and $3.4 million in FY 2027.