Updated: RI House drops 2026 Budget: No millionaire's tax, a small RIPTA increase, healthcare investments, and deep worries about Washington
“We’re facing major challenges and we’re flying blind to some degree," said Speaker Shekarchi. "We’re tackling what we can and preparing for the rest…"
This post may be updated as needed:
The House Finance Committee voted 11-3 to approve a $14.33 billion budget for the 2026 fiscal year, which closes budget gaps, bolsters Medicaid despite threats at the federal level, increases reimbursements for primary care providers, nursing homes, and hospitals, and provides additional resources to address the housing crisis. The three no votes were from Representatives Chippendale, Nardone, and Roberts, the Republicans on the committee.
The bill (2025-H 5076A) now goes to the full House of Representatives, which is scheduled to take it up on June 17 at 3:30 p.m.
House Speaker Joseph Shekarchi (Democrat, District 23, Warwick) held a press briefing on Tuesday, before the Finance Committee considered the budget.
“The budget addresses the most pressing needs of the day while having an eye on the uncertain future we all face," said Speaker Shekarchi. “We’re facing major challenges and we’re flying blind to some degree; we’re tackling what we can and preparing for the rest… The budget is always a statement of our values, and this one says that Rhode Island is committed to the health and wellbeing of every member of our community.”
President of the Senate Valarie Lawson released a statement that I will call “cautiously optimistic.”
“While we will be reviewing the budget as passed by the House Finance Committee tonight, we expect that it addresses many priorities of the members of the Senate, as well as the issues articulated during countless hours of testimony before the Senate Finance Committee.
“This budget makes immediate investments to address health care, particularly the primary care crisis, and also puts us on a path for an expedited rate review. It makes immediate investments in RIPTA, and we look forward to continuing to work with the agency as their efficiency study progresses. It maintains the critical investments we have made in child care and education over the past decade, better positions the state to respond to uncertainty at the federal level, and addresses many other critical needs, from homelessness to aid to cities and towns.”
Taxing the rich
Much of the austerity present in the budget, as well as the uncertainty surrounding the future actions of the Trump Administration and the Republican-controlled Congress, could be alleviated by enacting the proposed millionaire’s tax, which has been successful in Massachusetts. Such a tax could solve the problems with RIPTA, take a significant bite out of the state’s looming healthcare disaster, and make a substantial dent in homelessness and the housing shortage.
Unfortunately, the proposed budget does not include such a tax. However, Speaker Shekarchi noted that, given the uncertainty at the federal level, including potential major tax code changes, it is an option he would prefer to leave on the table for consideration should the state’s circumstances change later in the year.
The Working Families Party, which has been advocating for the tax, released the following statement:
“Today’s budget shows that state leadership would rather raise gas taxes for working families than increase taxes on millionaires. As President Trump and his allies advance destructive cuts that could cause over 240,000 Rhode Islanders to lose Medicaid and hundreds of educators and care workers to lose their jobs, we need bold action to raise revenue now – otherwise working people and small businesses will be paying the price for years. Throughout this session, Rhode Islanders have been at the State House week after week, imploring state leaders to increase revenue by having the 1% pay their fair share this year, because we can’t afford to let the losses pile up. While we respect the immense amount of work that goes into preparing such a weighty document, and while we're excited to see the “Taylor Swift tax” on non-owner occupied second homes above $1M included, we are disappointed that the ‘Revenue for Rhode Islanders’ proposal is not included.
“The 99% of Rhode Island households who make less than $625,000 each year won't pay a penny more, but we will all benefit from $190 million in investments in our public schools, hospitals, RIPTA, and roads and bridges. Waiting until 2026—or even until the fall—risks forfeiting $190 million in funding that could protect our care workers, prevent RIPTA route cancellations, and support our most vulnerable neighbors. There is still time for lawmakers to listen to Rhode Islanders and include Revenue for Rhode Islanders in the final budget. People across the state are calling on you: pass this bill to help fund Rhode Island’s vital programs, and to protect families from Trump’s hostile cuts – without putting the burden onto working people or small businesses.”
Health care
The bill bolsters primary care by allocating more than $40 million — $15 million in state funding and the remainder from federal sources — toward Medicaid rate increases for primary care providers, which currently lag behind those in surrounding states. It also includes a primary care rate review to be performed by the Office of the Healthcare Insurance Commissioner in 2026. Additionally, it maintains a proposed match to qualify for federal funding for a loan forgiveness program for primary care physicians (PCPs) working in underserved communities. Legislators are also working on several bills outside the budget to ease pressures on primary care providers, including a measure to reduce, but not eliminate, preauthorizations.
The Finance Committee added $38 million over the governor’s proposal for hospitals reimbursement rates and direct support payments, including the restoration of the upper payments limit program that the governor cut in his proposal.
The committee also added $12 million above the governor’s proposal to increase reimbursement rates for staff at nursing homes as part of its revision to the safe staffing law. The previous staff staffing law was signed into law by Governor Daniel McKee, only to be rendered unenforceable through a gubernatorial executive order issued shortly afterward.
In a statement, SEIU 1199NE thanked Speaker Shekarchi and Senate President Lawson for including a $5 million funding commitment in the budget to support the amended Nursing Home Safe Staffing & Quality Care Act, a landmark agreement between labor and the nursing home industry that aims to strengthen resident care and workforce standards.
The agreement, forged after months of negotiation between SEIU 1199NE and the Rhode Island Health Care Association (RIHCA), with support from the Raise the Bar on Resident Care Coalition, updates the 2021 nursing home staffing law. It includes a more realistic staffing target, clearer enforcement, fairer penalties and waivers, and public transparency measures—all designed to improve outcomes for residents and address Rhode Island’s crisis-level shortage of nursing home staff. Speaker Shekarchi’s proposed $5 million allocation will unlock a $7 million federal match, generating a total of $12 million that will go directly to:
Hiring new staff at facilities that are not yet meeting the safe staffing requirement, or
Raising wages and benefits for existing direct-care workers at facilities already in compliance.
“Safe staffing makes all the difference—for us and for our residents. When we have enough hands on deck, residents get the care they deserve, and we go home feeling proud, not defeated. This funding gives us hope that we can finally turn things around and get Rhode Island off that list of the worst-performing states.” - Tenah Nimmo-Powell, CNA, AdviniaCare Providence (previously Bannister Center)
Last week, Rhode Island Attorney General Peter Neronha held a rally in support of increasing Medicaid rates. A week before that, the Attorney General unveiled a range of ideas detailing how the state should work to “save” healthcare in Rhode Island. In a statement, the Attorney General “applauded” the proposed budget.
Attorney General Neronha said:
“For so long in Rhode Island, health care has been an afterthought, but following the House’s introduction of a newly revised budget, it is a cornerstone. Congratulations and thanks are in order for Speaker Shekarchi, Senate President Lawson, and the General Assembly for understanding the severity of Rhode Island’s health care crisis and meeting the moment with flying colors. They understand that putting over $40 million dollars more towards primary care will radically improve the health of our health care system. Additionally, the introduction of a pilot program to eliminate burdensome and unnecessary prior authorization requirements represents a meaningful first step in redirecting medical decision-making away from insurance companies back to providers, where it obviously should be. These necessary commitments, combined with additional health care investments in this budget, will go a long way to stop the bleeding. While there is much more work ahead to be done, I believe today marks a turning point for health care in our state, and worth celebrating as such.”
Housing
The committee increased support for programs to help Rhode Islanders experiencing homelessness by $4 million, bringing the total to $8.5 million, above the governor’s proposal. The increase is funded by a portion of the increased conveyance tax, a portion of the hotel tax on whole-home rentals, and an infusion of general revenues. It also incorporated a separate legislative proposal to allow developers proposing to renovate the “Superman” building in downtown Providence into housing and commercial space to access an additional state tax incentive program; however, the budget maintains the current total cap on the program.
The bill also institutes a new tax on the value of non-owner-occupied houses above $1 million, dedicating that revenue to future redemptions of the low-income housing tax credit.
The Housing Network of Rhode Island (HNRI) and Homes RI applauded the efforts of the Speaker and House Finance Committee “for their continued focus on housing,” adding:
“The House budget establishes a much-needed ongoing revenue stream for homelessness initiatives and increases the share of dedicated revenue for affordable housing production, from a combination of an increased real estate conveyance tax, a portion of the hotel tax on whole-home rentals, and general revenues. Additionally, a new tax on the value of non-owner-occupied homes valued above $1 million will be dedicated to future redemptions of the State's Low-Income Housing Tax Credit program.
“This budget year, we recognize that state leaders faced difficult decisions in light of budgetary constraints, numerous competing priorities, and grave uncertainty at the federal level. While we have continued work to do as a state to ensure that we are addressing the housing needs of our residents, we are pleased that the budget recognizes that ongoing investments in homelessness services and housing production are essential and must be prioritized, and we thank the General Assembly leadership for their efforts.”
Support for cities and towns
The budget includes an increase in the general real estate conveyance tax, levied on all sales and distributed in the same manner as it is currently, including revenue directed to municipalities. It also extends the hotel tax to short-term rentals of whole homes, dividing the new revenue between the municipalities where it is generated, support for homelessness programs, and the hospitality and tourism development agencies that receive a cut of the remaining hotel tax. The committee also raised the local hotel tax from 1 to 2 percent, further supporting municipalities.
The committee added a new proposal to apply the state sales and use tax to short-term parking of up to one month, starting January 1, to generate $1.6 million during the first half of the fiscal year it is in effect.
Funding for distressed communities was raised by $2.5 million over the governor’s proposal. The car tax reimbursement index was restored but capped at 2 percent.
To further help strengthen municipal budgets, the committee fully funded library aid, as well as the funding formula for state aid to education. The committee added $16.5 million in education aid to the governor’s proposal to cover data updates and some increased allocation through special education categorical funding, for a total of $59 million above the current year’s level for education aid.
Transportation
To help the Rhode Island Public Transit Authority (RIPTA) with its budget shortfall, the committee dedicated a 2-cent-per-gallon increase in the gasoline tax to RIPTA. That move, along with an expanded share of other dedicated transportation funds, is expected to provide about $15 million to RIPTA in the 2026 fiscal year. While additional funding is less than RIPTA’s initially projected budget shortfall, House leaders are pushing the agency to identify efficiencies to make up the rest, and have included a stipulation prohibiting RIPTA from cutting the RIde Anywhere program, which provides door-to-door transportation for qualified passengers with disabilities.
RIPTA Chief Executive Officer Christopher Durand released the following statement:
“On behalf of our drivers, staff and riders, we are grateful to Speaker Shekarchi and the House of Representatives for their support and for recognizing the critical importance of a strong statewide public transit system. The agency has long needed a consistent funding stream to allow us to better support getting Rhode Islanders to work, school and healthcare. The last time the agency saw a permanent change in its funding structure was over ten years ago; this is a needed improvement, which we are thankful for.”
The committee expanded the governor’s proposal for a new registration fee for electric vehicles as a proxy for transportation support that drivers of other cars provide through the gasoline tax. The proposal includes a $200 annual registration fee for battery electric vehicles, $100 for plug-in hybrids, and $50 for hybrids.
The committee also maintained the governor’s assumption that the state’s toll gantries for commercial trucks, shut down for several years over a lawsuit that the state ultimately won, would be reactivated by the final months of the year to generate $10 million in revenue.
Child care
The committee extended a state program that subsidizes child care for child care providers. It also established separate rates for infants and toddlers receiving state-subsidized care, and increased the infant rate to address the higher costs associated with those placements.
Initiatives not funded
For the second straight year, the committee removed the governor’s proposal to purchase a large facility owned by Citizens Bank in East Providence to house several state departments. In addition to general uncertainties, Speaker Shekarchi cited the announcement of the increased price tag for replacing the westbound span of the Washington Bridge. The committee added $22 million to cover the state share of the project costs from capital funds in 2027.
The committee faced significant challenges in this budget, from the end of emergency federal COVID funding, a sizable budget gap to address, and identifying solutions to numerous gaps in the governor’s proposal. Accordingly, the committee largely declined to include most of the new spending programs proposed in the governor’s budget.
The committee did not include the governor’s proposed 10% tax on digital advertising aimed at large online media providers. A similar program has been enacted in Maryland, resulting in litigation and failing to raise revenue for the state.
It also did not include his proposal to raise the cigarette tax by another 50 cents to $5 per pack. However, it closed a loophole that had allowed nicotine pouches to escape the tax on other tobacco products.
The committee did not increase marketing dollars given to Bally’s casinos. Bally’s sought a $17 million increase in the state’s marketing share in exchange for a possible smoking ban in the casinos. The legislation to ban smoking in casinos is still in committee.
Also not included were the “baby bond” proposal from the governor and the general treasurer, the governor’s workforce development program increases, and a proposal to merge the minimum and medium security units at the Adult Correctional Facilities, which was found not to achieve the intended savings.
Update June 12, 2025
Big Wins For Rhode Island Babies & Kids In The FY 2026 State Budget
The RIght from the Start campaign writes that the revised FY 2026 budget has several big wins for Rhode Island babies, kids, early educators, and families who rely on access to quality, affordable child care:
3-Year Extension of Child Care for Child Care Educators Pilot - Rhode Island's successful Child Care for Child Care Educators pilot helps child care providers attract and retain early educators by covering the cost of child care for frontline staff. Extending this pilot for another three years will help support our early educator workforce and keep child care classrooms open across the state.
$3 Million Commitment to Infant Care - A combination of high costs, low wages, and staffing challenges has led to the closure of infant classrooms across Rhode Island. The revised state budget establishes a new infant care rate category for the Child Care Assistance Program, with infant rates set 20% higher than toddler rates to help cover the costs associated with a 1:4 staffing ratio for babies aged 6 weeks to 18 months. This $3 million commitment to infants will help reopen closed classrooms that new parents rely on, allowing them to get to work.
MomsPRN Program – The budget allocates $750,000 in state general revenue to ensure the MomsPRN program will be sustained. This important program helps thousands of expectant and new moms access timely mental health care through their OB/GYN or primary health care provider. The PediPRN program will also continue with existing federal grant funds.
Pediatric Primary Care Rate Review – The budget prioritizes strategies to address the statewide primary care shortage affecting people of all ages. Completing a comprehensive pediatric primary health care rate review in 2026 is an important first step toward ensuring that Medicaid rates are sufficient to ensure every baby and child in the state has access to pediatric healthcare.
With about one week left of the legislative session, the RIght from the Start campaign is still fighting for:
Rhode Island Prekindergarten Education Act (H5199, S0394) - Sets a goal to achieve universal, voluntary, quality Pre-K for all three- and four-year-olds and codifies key elements of the 2022 Pre-K plan, including a 30% funding set aside for future expansions to strengthen and sustain access to quality infant and toddler care. This bill has passed the Senate, and we are hopeful the House will take action before they recess.
Improved Paid Family Leave (H6066, S0974) - Rhode Island was a leader in establishing a paid family leave program in 2013. Still, the Temporary Caregiver Insurance (TCI) program has not kept pace with best practices and those of our neighboring states. We are hopeful the full Senate and House will pass a version of this bill before the end of the session.
Early Childhood IDEA Task Force (H5164, S0231) - Establishes a public-private planning committee to develop recommendations that would improve access to high-quality Early Intervention and Preschool Special Education for young children with developmental delays and disabilities.
No millionaires tax is a mistake, and will once again take from the poor and give to the rich. This budget is balanced on the backs of the poor and working class. The legislature choked again. No big surprise.
Clearly not listening to their constituents. They need to be brave and bold in these times.