The Rhode Island Equity Impact Campaign analyzes Governor McKee's FY 2027 budget

“As residents, we have an obligation to the people affected by systemic inequities and to understand whether the budget reflects and supports our stated values.”

Hector Perez-Aponte

“The Rhode Island Equity Impact Campaign is comprised of advocacy, philanthropic, faith, and community groups, including the Economic Progress Institute (EPI), as well as individual advocates who have come together to ensure that policies, programs, and the state budget correct historic disparities and advance equity-centered policies to make Rhode Island a place where all residents can thrive,” said Hector Perez-Aponte, EPI’s Racial Justice Policy Analyst. “As residents, we have an obligation to the people affected by systemic inequities and to understand whether the budget reflects and supports our stated values.”

Perez-Aponte was presenting an Equity Review of Rhode Island Governor Daniel McKee’s Proposed FY2027 Budget to explain how this equity tool gives a glimpse into whether policymakers center equity in their work and priorities. [See text at this footnote.¹] The event also served as advocacy for the passage of legislation (H7236/S2989), led by Representative David Morales (Democrat, District 7, Providence) and Senator Tiara Mack (Democrat, District 6, Providence) that will create a two-year pilot program to incorporate Equity Impacts Statements into the legislative process as a no-cost tool, like a fiscal note, to measure, with data, how legislation could affect historical disparities in Rhode Island and make it a more equitable state.

Here’s the video:

“Equity impact statements and the equity review that’s being unveiled today are important,” said Paige Parks, Executive Director of Rhode Island KIDS COUNT. “It’s important for the General Assembly and the public to better understand the positive and negative impacts that legislative and budgetary proposals are likely to have on Rhode Islanders. Equity impact statements and this equity review can help ensure that budgets and legislation being drafted, considered, and passed are sound and fair, and can serve as tools to increase equity and reduce disparities. One example of this is the Child Tax Credit (CTC).”

Director Parks explained:

“The Child Tax Credit is proposed in Article Five, Section Five, of the governor’s proposed fiscal year 2027 budget. This proposal creates a new refundable state child tax credit of $325 per dependent child under 19. This would be the state’s first permanent child tax credit.

“The CTC was developed by the federal government in 1997 to promote economic stability for families and to reduce child poverty by offsetting some of the costs of raising children, but there’s a problem with it. Many low-income families, many of whom are working, receive no federal child tax credit or only a partial one because of the way that the CTC is structured. Right now, low-income working families may receive less tax credit than higher-earning families. Children and families earning an annual or monthly income of $2,500 or less are completely ineligible for the credit. The federal CTC does not effectively reach low-income children. It helps, but it doesn’t reach all of them.

“The CTC was temporarily expanded, made fully refundable, and the minimum earnings requirement was waived during the COVID-19 pandemic. During that time, we saw a significant number of families lifted out of poverty. According to the Prenatal to Three Policy Impact Center, during that temporary expansion of the federal child tax credit in 2021, there was a decrease in depressive and anxiety symptoms, especially among Black parents. There were improved nutrition outcomes and food security, with little to no adverse impacts on employment.

“Child tax credits are an effective tool to bolster the economic security of low- and middle-income families and position the next generation for success. They boost the after-tax incomes of qualifying families and help them with basic needs like housing, food, and utilities, as well as offset the high costs of raising children. When designed well, including making it fully refundable and eliminating the minimum earnings requirement, a state child tax credit can counteract some of the deficiencies of the federal child tax credit and lead to meaningful reductions in child poverty and deep poverty.

“The governor’s proposal for a permanent, fully refundable child tax credit would improve equity and allow more families to benefit. This is an example of how, when you look at a proposal through an equity lens, you can see how it can benefit children and families and improve outcomes.”

“We believe that when making policy and budget decisions, legislators and voters must consider how proposals impact all communities, especially those historically discriminated against,” said Perez-Aponte. “Even when legislation does not explicitly say or mention protected classes like race or gender, it can still produce unequal effects. To ensure fair and just outcomes, it’s essential to assess the broader impact on equity that all legislation poses to avoid perpetuating or worsening disparities across Rhode Island.”

Perez-Aponte continued:

“A budget equity review is a tool used to analyze the potential impact of a governor’s proposed budget on equity, assessing whether the proposed allocation increased or decreased equity across racial, ethnic, gender, disability, and other lines. These can also include additional policy proposals that would help advance the administration’s equity goals, or further evaluations of those proposals’ equity impacts. They are already doing this in states like Connecticut. Since 2022, several bills have been introduced to incorporate budget equity reviews into our state’s budget process. None of those bills has made it out of committee.

“Policy areas are analyzed along three dimensions: the status quo in current policy programs and ongoing expenditures; new measures presented in the proposed FY 2027 budget; and additional opportunities to be embraced for an equity evaluation of the proposed policy.

“We’ll start with the personal income tax rate section, which, in the budget and the governor’s proposed budget, can be found under Article Five. The status quo holds that, for personal income tax rates, the highest-income earners currently pay a lower percentage of income in state and local taxes than the lowest-income Rhode Islanders.

“Rhode Island is actually tied for the fifth-worst in the country in the percentage paid by the lowest 20% of earners. The governor has included a proposal in his budget that calls for a millionaire’s tax, creating a fourth tax bracket at 8.99% on taxable income above $1 million. We posit that while this proposal makes for a good start. A similar tax above the top 1% cutoff or $640,000 in taxable income, and an average of $772,000 total pre-tax income would be even better. This top 1% proposal would not only raise more revenue to fund critical programs, but because income is inequitably distributed by race and ethnicity, with Black and Latino Rhode Islanders featured disproportionately among lower income filers and disproportionately less among higher income filers, it would make our state fairer, make the state tax system fairer and more equitable in terms of race and ethnicity.

“Next, make a pivot to proposals that would have mixed outcomes for equity. This is where we stress the importance of an equity analysis because, while a policy might appear to improve equity on the surface, it can have deeper ramifications for how it affects people more broadly. We’re going to look at transit. As I mentioned, this sort of analysis can be easily missed if you’re not looking at it with an equity lens.

“The status quo for transit is that the Rhode Island Public Transit Authority (RIPTA) was facing a $39.8 million deficit for FY 2027. In August 2025, the RIPTA board voted to implement service reductions that would take effect in September 2025. The General Assembly narrowed this deficit by allocating $15 million through a two-cent gas tax increase and a larger share of the highway maintenance account. RIPTA currently faces a $14 million budget deficit. The FY 2027 budget proposes reversing the gas tax increase enacted in the previous fiscal year. [I note also that the reversal of the gas tax increase is not in Article Two. It’s in Article 11, but for the flow of the report, we just put it under Article Two.]

“In place of the gas tax increase, the proposal would add $9.3 million to the highway maintenance account, $3.5 million for bus purchases, and $1 million from cruise operator fees. While the governor’s proposal would effectively close RIPTA’s deficit, it is not enough to restore prior service cuts. More funding is needed to restore lost services; according to the Save RIPTA Coalition, it will take at least $5 million to bring RIPTA back to its September 2025 level. Fortunately, legislation is being introduced this year to do just that.

“Currently, Rhode Islanders with Social Security income and at full retirement age are exempt from state taxation of their Social Security income when a filer’s overall taxable income is $170,000 or lower, or $133,750 or lower for joint filers. The FY 2027 budget proposal eliminates state taxation of Social Security income over three years, first by making those below full retirement age eligible for the exemption, then exempting half of recipients from taxation, and finally exempting all recipients.

“The first stage of this proposal would likely increase equity because individuals who elect to take their Social Security benefits early often have little choice and need the income. However, the second and third stages would primarily benefit higher-income seniors. Those earning more than $170,000 a year in retirement. This includes billionaires. This proposal will provide little to no relief for the 80% of seniors in Rhode Island who earn less than $170,000 a year in retirement, many of whom already struggle to meet their basic needs. While this proposal would certainly help some seniors, it would also result in a $60 million revenue loss once fully implemented, potentially leading to cuts to other critical programs and possibly harming other Rhode Islanders.

“As you can see, these deeper equity evaluations can highlight the issue areas to be addressed in policymaking.

“As you’ve all witnessed, the budget equity review will increase transparency and improve the quality of legislation. Our long and national local history of racial and other disparities demands that we take equity seriously by implementing and analyzing the myriad ways policies will shape people’s lives. We at the Equity Campaign will continue to advocate for laws requiring budget equity reviews and equity impact statements for state laws and budgets.

“This year, we are asking folks to support a proposal championed by Senator Tiara Mack and Representative David Morales. They are reintroducing legislation to establish a two-year pilot program for budget equity reviews and another tool, referred to as equity impact statements.

“Equity impact statements are like fiscal notes. They’re used to measure the potential impact of any proposed policy on equity. Rather than a budget equity review, which analyzes the budget, equity impact statements would analyze legislation. This tool assesses whether any proposed bill is likely to increase, decrease, or have no impact on equity. Similar tools have been incorporated in nine other states. This pilot program would begin in January 2027 and end in December 2028. The bill designates the Commission on Health Advocacy (The CHAE) to draft equity impact statements. It would allow the Speaker of the House to request up to five impact statements, the Senate president to request up to five impact statements, and the RIBLIA Caucus to request up to 10, five in the House and five in the Senate. This totals 20 equity impact statements per legislative session over the duration of this pilot program.

“In addition, the bill would require that the budget officer submit an equity review alongside the governor’s proposed budgets for FY 2028 and FY 2029. This will require that state agencies, as we demonstrated today, include a supplemental presentation in their annual budget requests to the government identifying departmental programs, whether ongoing or newly proposed, that advance equity.”

“It is a pleasure to be here with a diverse coalition that supports public policies to further equity in our state,” said Representative David Morales. “This year, I have the pleasure of being a co-sponsor, leading efforts to establish equity impact statements as part of a pilot program that would systemically transform how we make decisions here in the legislature on issues like public transportation, public schools, and the future of public education.”

Representative Morales continued:

“On that note, I want to reference another piece of legislation that another diverse coalition is working towards: establishing opportunities for educators to pursue certifications in bilingual and dual language education—in other words, preparing the workforce to meet the moment and provide our students with the multilingual support they need in our classrooms. This is a perfect example of why equity impact statements would be so valuable if they already existed and were used in decision-making processes within our House committees and, ultimately, during discussions on the House floor, because nearly 20% of students across our public schools are multilingual. They are speaking a language other than English within their homes.

“It’s an ongoing issue that we do not have enough educators who are properly certified in bilingual and dual language education, and thus aren’t able to provide their students with the support that they deserve. If we look at this issue through the lens of equity impact statements, we would see that passing this legislation to provide more opportunities for our educators and implement additional certifications to better support our multilingual learners would improve equity across the board. We would be improving equity in opportunity in our public schools, but most importantly, equity in what it means to receive a quality public education here in Rhode Island. For that reason, I cannot emphasize enough how transformative this legislation would be. It would transform the way decisions are made inside this building.

“As part of a pilot program, we’re allowing the House Speaker, the Senate President, and the RIBLIA Caucus to determine which pieces of legislation should be prioritized from the perspective of equity impact statements. We have seen a trend of other states adopting this practice. States that are passing balanced budgets that reflect the needs and yearnings of their communities. I want to thank the Economic Progress Institute, but most importantly, this coalition, for continuously fighting and advocating for a shift from the status quo that goes well beyond just fiscal notes, but one towards establishing equity in every piece of public policy that comes through this chamber.

“We recognize that transforming norms and practices takes time, and this is why our continued advocacy is so important. I look forward to making sure that this is the year we get equity impact statements out of committee and onto the floor, and transform the practice of passing laws inside this building.”

“I’m going to take us back to a time in November when SNAP was threatened because HR1 decided that refugees and people who are low-income don’t deserve food, and many Rhode Island communities were directly impacted,” said Senator Tiara Mack. “Every year, every single month, at least $1 million a day is spent to feed Rhode Island’s hungriest: about 140,000 people in our state. Because of HR1, our state’s ability to directly feed and care for all Rhode Islanders is under attack, and that’s why this year I introduced a $3 million allocation to the Rhode Island Food Bank to make a small dent in ensuring we can feed every Rhode Islander.”

Senator Mack continued:

“That is why things like equity impact statements matter. Who are the precious Rhode Islanders who, in November, faced unprecedented amounts of hunger? What does the community look like? What does the food bank infrastructure look like in those communities? Who are those community members? Who are the refugees, who were previously legal permanent residents, who overnight lost their ability to feed their families? Equity impact statements will help us understand the picture and provide an informed legislative package to address the changes happening in Washington.

“Every day, this Administration is providing new ways for us to fight back, but also threatening the livelihoods of communities. With equity impact statements, we will have the tools to advocate more fiercely for our communities in an ever-changing landscape. We don’t know every single name or every single phase, but we can clearly paint a picture. What does the General Assembly need to do to stand up and fight for communities? What policy do we need to prioritize in the General Assembly in the wave of Medicaid and SNAP cuts, which threaten our ability to educate our young people, provide for the municipal responsibility of creating roads and maintaining bridges, and ensure that our healthcare infrastructure is keeping up with the people who rely on it, whether they’re on Medicaid or private insurance? Because many of us in this room know that if a hospital system collapses, it’s not just individuals on Medicaid who will be unable to access healthcare, but every person in that community. That’s why these equity impact statements are so important and why champions in the RIBLIA Caucus are the sponsors. For too long, our communities have been left out of legislative decision-making.

“We know that oftentimes, the decisions that happen in this building don’t represent the voices or people or communities directly impacted by many of the things that these bills aim to do, whether it’s education, food security, or funding for RIPTA. Every day, these decisions are made on vibe or feel, not on data-driven approaches that let us ensure we’re doing everything in our power. There are a lot of things happening in the State House today, including a Revenue Alliance conversation that’s happening in room 135. Whether we decide to tax the top 1% or people who make over $625,000 after their deductions, all those decisions should be informed by how we can use that money.

“What are the communities that will be impacted? Are those individuals truly paying their fair share when it comes to delivering on the promise of a quality education? Are we delivering on the promise to provide healthcare insurance or coverage for all who need it? Are we delivering on our promise to feed every person in the community? Are we able to provide every person in our communities with the opportunity to purchase a home or live in an affordable community, or to build affordable housing to meet the housing crisis, because we have not built enough homes?

“I’m proud that we have this legislation. With this pilot program, we’ll be able to prove not just that this is a good thing for Rhode Islanders but that our communities deserve to have responsive legislation and people who are listening, not just to the needs of their community but are using data to back up those decisions.”

1. An Equity Review of the Proposed FY2027 Rhode Island State Budget (April 2026)

BACKGROUND

Rhode Island’s annual state budget is the most important piece of legislation proposed, debated, and enacted each year. The budget is a statement of our values and priorities and has been called a moral document. As residents of this state, we are obligated to understand whether the budget, in its many expenditures and investments, elevates our identified values and priorities. Our long national and local history of racial and other disparities, including the persistent racial wealth gap, has made it critical for Rhode Island to consider whether the proposed budget addresses equity across racial, ethnic, gender, disability, and other lines.

Connecticut Governor Ned Lamont included an equity evaluation of his proposed Fiscal Year 2024 and 2025 budgets put forward in February 2023, following legislation enacted in 2022. The detailed “Ensuring Equity for All” appears directly after the budget’s introductory letter. Similar legislation was first proposed in Rhode Island in 2023 and has been proposed in subsequent years, including this session. If enacted, the governor’s future budgets would be accompanied by an equity evaluation.

The Equity Impact Statement and Budget Equity Impact Act, Rhode Island legislation submitted by Senator Tiara Mack (S2989) and Representative David Morales (H7236), like the Connecticut legislation, mandates “an explanation of the manner in which provisions of the budget further the Governor’s efforts to ensure equity in the state.” The explanation would consider equity in terms of “efforts, regulations, policies, programs, standards, processes, and any other functions of government or principles of law and governance,” seeking to do any of three things:

• “Identify and remedy past and present patterns of discrimination or inequality... and disparities in outcome.”

• “Ensure that such patterns of discrimination, inequality and disparities in outcome, whether intentional or unintentional, are neither reinforced nor perpetuated.”

• “Prevent the emergence and persistence of foreseeable future patterns of discrimination...or disparities in outcome.”

The proposal calls for considering equity and disparities in terms of the population groups identified in Rhode Island’s Fair Employment Practices statute, 928-5-7 (1)(: race or color, religion, sex, sexual orientation, gender identity or expression, disability, age, or country of ancestral origin.

This proposal is part of an omnibus bill that addresses the equity impact of legislation more broadly and would also require that equity considerations be integrated into the agency-level budget development process.

The following offers an example of an equity review for the recently proposed Rhode Island FY2027 budget. While the review seeks to address a broad array of policy issues, it is not intended as a comprehensive review of all policies or of the entire state budget.

INTRODUCTION: AN EQUITY LENS

The opening sentences of the letter introducing the 2022 version of Governor Daniel McKee’s RI 2030 - Charting a Course for the Future of the Ocean State: A Working Document call for building an equitable state and addressing long-term challenges: “As Rhode Island emerges from a once-in-a-century public health crisis, we have a once-in-a-generation opportunity to build a more resilient, prosperous, and equitable state for all. Making the most of this opportunity will require a collaborative effort to address not only the challenges caused by the pandemic, but also those that existed long before.” The document references using a “race equity lens” four times. An equity lens uses multiple perspectives to examine what policies, programs, and expenditures look like when we value and prioritize reducing racial and other disparities and advancing equity.

As the Governor’s team begins the budget process each year, here are possible steps to ensure they use an equity lens:

• Step 1: Start with the values of increasing equity, expanding and broadening economic opportunity, centering communities directly impacted, historically and currently, by disparities, and recognizing that disparities are not isolated but often intertwined.

• Step 2: Identify data, ideally specific to Rhode Island, to describe existing and historical disparities by race, ethnicity, gender, age, disability status, veteran status, and more.

• Step 3: Identify which policies and legislation have, intentionally or unintentionally, contributed to creating these disparities. If there is any hope of designing a budget to reduce such disparities through expenditures and programs, then we need to know how these disparities were created.

• Step 4: Identify what policies and expenditures will help decrease disparities and who will be helped, as well as what unintended consequences there might be.

• Step 5: Build in an assessment plan to determine if enacted policies and expenditures have narrowed disparities.

If the annual state budget is to employ an equity lens and truly function as a tool to realize our values and to increase equity, then it is critical to understand the context of systemic disparities - historical and ongoing - that frame the policy landscape and the policy and expenditure decisions policymakers must make.

The question - whether for someone assigned to design a state budget or for someone assigned to analyze a proposed budget - is what does the budget do to improve the lives of individuals and communities impacted by disparities? And, with different expenditures and programs, could it do even more?

THE PROPOSED FY2027 BUDGET

Even though the RI 2030 working document begins with a call for equity, the Governor’s proposed FY2027 budget rarely mentions equity, and neither does the administration’s Executive Summary of the proposed budget or the Media Presentation that the Governor’s office provided to launch the budget.

Nevertheless, some of the existing expenditures and new measures in the Governor’s Fiscal Year 2027 budget proposal would increase equity by investing in programs and policies that reduce disparities among Rhode Islanders. The proposed budget can be assessed through an equity lens to consider the opportunities included in and omitted from it.

This review addresses a selection of critical policy areas along three dimensions:

1. The status quo, in terms of current policies/programs and ongoing expenditures;

2. New measures presented in the Proposed FY2027 Budget; and

3. Additional opportunities to be embraced.

This equity evaluation is organized by the budget articles corresponding to the policy areas discussed. Each section connects specific topics - such as public transit, taxes, or cash assistance - to the relevant budget articles where those policies are or would be addressed. This approach reflects how the Rhode Island budget is actually written and allows the reader to more easily understand where the appropriate policies appear or would appear within the Governor’s proposed FY2027 budget. A comprehensive equity review would consider all articles and their many provisions.

Budget articles, with entries on the bolded articles, organize the evaluation:

• Article 1 - Relating to Making Appropriations in Support of FY 2027

• Article 2 - Relating to State Funds

• Article 3 - Relating to Government Reform and Reorganization Article 4 - Relating to Debt Management Act Joint Resolutions

• Article 5 - Relating to Taxes and Fees

• Article 6 - Relating to Capital Development Program

• Article 7 - Relating to Education

• Article 8 - Relating to Medical Assistance

• Article 9 - Relating to Leases

• Article 10 - Relating to Health and Human Services

• Article 11 - Relating to Affordability Article 12 - Relating to Effective Date

• Article 2 - Relating to State Funds

This article addresses state funding mechanisms and special accounts, including how certain funds are allocated or distributed within the state budget for programs such as public transit.

PUBLIC TRANSIT

• Status quo: Previous estimates by the Rhode Island Transit Authority (RIPTA) had forecasted a $39.8 million deficit for FY 2027; however, the General Assembly was able to narrow this gap by allocating $15 million through a two-cent increase on the state’s gas tax and upping the agency’s share of the state’s Highway Maintenance Account. However, these state actions were still not enough to stop sweeping service reductions. In August 2025, the RIPTA Board voted to reduce service on 45 of 67 routes, cutting service by approximately 15% across the system. Under its current financial plan, the Rhode Island Public Transit Authority (RIPTA) is anticipated to face a roughly $14 million deficit. When RIPTA’s services are poor, this disproportionately impacts low-wage workers, communities of color, people with disabilities, and senior Rhode Islanders. Since September 2025, 75% of RIPTA’s routes have lost ridership when the cuts took effect.

• New Measures in the Proposed FY2027 Budget: The proposed FY2027 budget includes repealing the two-cent gas tax increase enacted in the previous fiscal year. In its place, and to close the $14 million deficit, the Governor proposes increasing funding in the Highway Maintenance Account by $9.3 million, adding $3.5 million in capital-plan funding for bus purchases, and adding another $1 million from cruise operator fees.

• Additional Opportunities: The proposals outlined in the Governor’s proposed budget would effectively close RIPTA’s fiscal deficit. However, the plan does not restore prior service cuts, meaning the agency would remain at reduced service levels from previous years, even with the new funding. To restore lost services, the state should allocate additional funding through a supplemental budget. Furthermore, the state could look to expand RIPTA as a stronger public transit system has been shown to benefit the economy and would make Rhode Island more accessible for those without private vehicles.

Article 3 - Relating to Government Reform and Reorganization

This article includes administrative and operational changes to the state government, including how programs are managed and implemented. It is where statutory changes related to election administration and voting systems appear.

DEMOCRACY AND VOTING RIGHTS

• Status quo: Rhode Island funds statewide elections using General Revenue. For this purpose, the proposed FY2026 budget includes $6 million for the Office of the Secretary of State and $9.1 million for the state Board of Elections. In election years, the allocation increases, particularly during statewide elections, and includes funds for the state’s system of public financing of elections. Although Rhode Island’s constitution includes a right to vote, Rhode Island elections are not as accessible as they could be. In 2006, Rhode Island became one of the first states to automatically restore voting rights to those convicted of felonies after incarceration.

• New Measures in the Proposed FY2027 Budget: The proposed budget includes no proposals or new expenditures to expand or further enhance voting rights.

• Additional Opportunities: Allowing same-day voter registration, which is available in all the New England states except Rhode Island and Massachusetts, and available in another 18 states and the District of Columbia, would increase access to voting for Rhode Islanders. Based on the experience of other states, same-day voter registration would not require a significant budgetary expenditure because Rhode Island already deploys e-poll books and ballot-on-demand printers, already processes same-day voter registration for Presidential elections, and election officials are already working on election day. Same-day registration leads to a demonstrable increase in voter turnout, particularly for Black and Latino voters. Same-day registration, as well as early voting, makes it possible for more people to vote; early voting provides for greater flexibility for those whose work schedules prevent them from making it to the polls on election day.

Article 5 - Relating to Taxes and Fees

This article contains tax policy and revenue changes that affect how Rhode Island raises money and how tax benefits are distributed. It includes policies affecting personal income tax rates, taxation of Social Security income, and tax-based supports for families and children.

CHILD TAX CREDIT

• Status quo: According to the 2025 Rhode Island KIDS COUNT Factbook, from 2019 to 2023, 13% of Rhode Island children - roughly 27,224 Rhode Island children - lived in households below the federal poverty line. Poverty contributes to inadequate nutrition, unstable housing, school instability, stress, and family disruption. The federal Child Tax Credit, increased temporarily during the coronavirus pandemic, resulted in a measurable decrease in child poverty. This decrease was reversed when it expired and was not renewed by Congress. In 2022, Rhode Island provided a one-time child tax rebate using coronavirus relief funds. Rhode Island provides a Child and Dependent Care Tax Credit equal to 25% of the federal credit for childcare expenses. The state’s Earned Income Tax Credit provides modest financial assistance to some Rhode Island workers with children.

• New Measures in the Proposed FY2027 Budget: The proposed budget includes a provision that would replace the existing personal exemption for children under 19 with a fully refundable state Child Tax Credit (CTC) of $325 per child. This proposal would improve equity because the lowest-income families in Rhode Island cannot claim the personal exemption but would be able to claim the full CTC amount of $325.

• Additional Opportunities: Research has shown that child tax credits have a demonstrable impact on well-being, including by reducing poverty. Although the budget proposal improves equity and will provide Rhode Island’s lowest-income families with additional income to cover rising costs, a larger Child Tax Credit would have an even greater impact on child poverty rates. This year, legislation is being introduced that would replace the existing personal exemption for children under 19 with a fully refundable state Child Tax Credit of $650 per child.

PERSONAL INCOME TAX RATES

• Status quo: Rhode Island’s 3-bracket Personal Income Tax system, with a top rate of 5.99%, is moderately progressive, but the highest-income Rhode Islanders pay a lower percentage of income in all state and local taxes than do the lowest-income Rhode Islanders. Rhode Island is tied for the fifth-worst in the country in the percentage paid by the lowest 20% of income earners (see https://itep.org/whopays-7th-edition/).

• New Measures in the Proposed FY2027 Budget: The proposed FY2027 budget calls for establishing a 4th tax bracket at 8.99% for taxable income above $1 million.

• Additional Opportunities: While the millionaires tax bracket proposal is a good start, a similar tax on income above the Top 1% cutoff (at $640,000 in taxable income and an average of $772,000 in total pre-tax income) would be even better. The Top 1% proposal would not only raise more revenue to fund critical programs, but because income is inequitably distributed by race and ethnicity - with Black and Latino Rhode Islanders featured disproportionately more among lower-income filers and disproportionately less among higher-income filers - it would make our state tax system fairer and more equitable in terms of race and ethnicity.

SOCIAL SECURITY INCOME TAXATION

• Status quo: Rhode Islanders with Social Security Income and of full retirement age (65 or 67, depending upon year of birth) are exempt from state taxation of their Social Security Income when a filer’s overall taxable income is $107,000 or lower, or $133,750 or lower for joint married filers.

• New Measures in the Proposed FY2027 Budget: The FY2027 budget proposes eliminating state taxation of Social Security Income in three stages: first, making those below full retirement age eligible for the exemption; then exempting half of recipients from taxation; and finally, exempting all recipients.

• Equity Evaluation: The first stage of this proposal would likely increase equity because individuals who elect to take their Social Security benefits early often have little choice and need the income. Therefore, removing the age restriction would likely help lower-income seniors. However, the second and third stages would primarily benefit middle-income and high-income Rhode Islanders. According to estimates provided to the Economic Progress Institute by the Institute on Taxation and Economic Policy (ITEP), 91% of the benefit from this proposal would go to the Top 20% by income, those with total income of $151,000 or more. Furthermore, 35% of the benefit would go to the Top 5%, and nearly 7% to the Top 1%. The average income of those benefiting would be $429,300. While this proposal would certainly help many senior Rhode Islanders and perhaps increase age-based equity, it would also include millionaires, so it would widen income disparities and trigger revenue losses that could result in cuts to critical programs, possibly harming other Rhode Islanders.

Article 6 - Relating to Capital Development Program

This article authorizes state borrowing and bond initiatives that may fund long-term investments in infrastructure, such as schools, housing, and public facilities. These investments can influence access to housing opportunities across the state.

HOUSING

• Status quo: More than a third of Rhode Island households (142,920) pay more than 30% of their income toward housing costs, making them cost-burdened and leaving less money to spend on personal needs and to support our local economies. Of those, 44% (62,237) are severely cost burdened - paying at least half their income on housing costs-and making them housing insecure. Nearly half of the state’s renters are cost-burdened, as well as more than a quarter of the state’s homeowners. There is no municipality in the state where a household earning the median homeowner income of $112,858 can affordably buy a home. There is also no municipality in the state where a household earning the median renter income of $48,434 can afford the average 2-bedroom apartment. These challenges disproportionately impact communities of color as homeownership rates for Black, Hispanic, and Asian households are 8-10 percentage points lower than the U.S. rates. Hispanic homeowners in particular suffer the highest rates of housing cost burden at 39%; Hispanic renter households have the second highest rate of housing cost burden at 53%. Despite recent state budget investments and several legislative changes to increase housing production, RI relies heavily on federal dollars for housing and homelessness programs and trails other New England States in per-capita state spending on housing.

• New Measures in the Proposed FY2027 Budget: The Governor’s capital budget proposes a second $120 million housing bond that, if approved by the General Assembly, will require voter approval in November 2026. Additionally, the budget includes a $1.7 million allocation of General Revenue for three year-round shelters.

• Additional Opportunities: If Rhode Island voters approve another housing bond in Fall 2026, the state could ensure these funds are strategically allocated to address long-standing racial and ethnic disparities in housing, including efforts to increase Black and Latino homeownership rates. Additionally, the state could allocate funding to provide housing for people with disabilities in a specific number of affordable housing units, without segregating these Rhode Islanders into a single location.

Article 7 - Relating to Education

This article includes education policy changes affecting Rhode Island K-12 and higher education systems. These policies influence educational access and outcomes across the state.

EDUCATION

• Status quo: Over the years, Rhode Island has taken several steps to ensure that all children have access to the high-quality education they need to succeed in school, career, and life. In 2010, the General Assembly enacted the state’s first education funding formula, which was based on five key principles: equity, adequacy, predictability, accountability, and efficiency. Still, in 2022, Education Trust identified Rhode Island as one of the states in which districts serving the most students of color receive less state and local revenue per student than districts serving the fewest students of color. In fact, in Rhode Island, districts serving the most students of color received $2,583, or 13% less, combined state and local revenue per student than the districts serving the fewest students of color. Only Connecticut and Nebraska did worse on this measure. Recognizing inequities in how local revenue supports students, Rhode Island allocates 143% more state revenue to districts serving the most students of color than to those serving the fewest. However, even this additional infusion of state revenue does not offset differences in local contributions.

• New Measures in the Proposed FY2027 Budget: The Governor’s proposed budget increases the student success factor from 40% to 43% for high-poverty districts, including Central Falls, Newport, Pawtucket, Providence, and Woonsocket, five districts with high concentrations of child poverty, high percentages of students of color, and high percentages of Multilingual Learners. The budget also includes funds to support a 20% multiplier on the core per-pupil funding amount for each Multilingual Learner, a change made as of the FY2025 budget.

• Additional Opportunities: The student success factor should be further increased to better meet the needs of low-income students, many of whom are students of color. The needs of students receiving special education services are also inadequately addressed by the current funding formula. Studies estimate that, to close achievement gaps, states need to provide 100% to 200% more funding for students with additional needs than for those without.

Article 10 - Relating to Health and Human Services

This article includes provisions related to health and human services programs, including the coordination of human services programs.

HEALTHCARE WORKFORCE

• Status quo: Rhode Island is currently experiencing a workforce shortage in many critical areas of health care, including primary care, behavioral health care, and nursing home care, and this shortage is projected to continue. According to the Rhode Island Department of Health and Human Services, the state continues to experience a shortage of Certified Nursing Assistants (CNAs). CNAs play a vital role in the healthcare system by providing essential hands-on care in nursing homes, hospitals, and long-term care facilities - areas of growing concern as Rhode Island’s population ages.

• New Measures in the Proposed FY2027 Budget: The proposed budget includes no new measures to expand or diversify the state’s healthcare workforce.

• Additional Opportunities: The state should increase funding for adult education centers that provide CNA training. These centers provide accessible, community-based pathways into the healthcare field. Such investments will help to address the state’s healthcare workforce needs and support economic mobility for communities.

RHODE ISLAND WORKS/CASH ASSISTANCE

• Status quo: Rhode Island Works is the cash benefit and workforce development program for low-income families with children under 18. In 2021, the Raising RI Coalition won an increase in Rhode Island Works benefits, which had not been adjusted in 30 years. With some additional programmatic changes to the benefits framework in 2022, 2023, and 2024, the state strengthened this key program aimed at lifting children and families out of deep poverty. In 2024, the program saw a 20% increase in the cash benefit, marking a significant step towards improving equity for low-income families. However, without a cost-of-living adjustment, this benefit continues to decline with inflation. The Rhode Island Works program continues to be funded entirely with federal Temporary Assistance for Needy Families (TANF) Block Grant funds.

• New Measures in the Proposed FY2027 Budget: The proposed budget includes no new measures to improve or expand the Rhode Island Works cash assistance program.

• Additional Opportunities: Rhode Island Works cash assistance benefits are set at 39% of the Federal Poverty Level. Without a cost-of-living increase, the benefit will continue to lose value due to inflation and rising costs of basic services. Boosting the benefit amount to 100% would lift families out of deep poverty. It would not necessarily cost the state additional money, as these benefits could be fully funded through the federal TANF block grant. From 1997 through 2009, the state steadily decreased its investment of state dollars in the program to zero, relying for well over a decade entirely on federal funding. To increase equity, the state could improve the program in the following ways: increase the benefit amount up to 100% of the Federal Poverty Level, tying the benefit to a cost-of-living adjustment, increase the child support pass-through, eliminate the benefit reduction for families living in subsidized housing, and invest General Revenue to provide Rhode Island Works benefits to eligible lawful permanent resident children and families without a five-year waiting period, which would all positively impact equity. Most of these changes could be paid for entirely with federal TANF funds, including past TANF funds held in reserve, with no state General Revenue required. Nevertheless, given the program’s value and impact, additional funding would help improve equity and access to Rhode Island Works.

Article 11 - Relating to Affordability

This article outlines targeted affordability initiatives aimed at improving economic security for Rhode Island households. Policies in this article may include programs designed to support families and improve long-term financial stability, such as baby bonds and paid family leave.

BABY BONDS

• Status quo: According to the 2024 Rhode Island Standard of Need report published by the Economic Progress Institute, the poverty rate for Black Rhode Islanders (17.3%) is twice as high as the rate for White Rhode Islanders (8.7%), and the rate for Latino Rhode Islanders (22.6%) is over two and a half times as high as for White Rhode Islanders; the rate for Asian Rhode Islanders is 12.8%. One of the primary reasons for these stark disparities is the legacy of policies that were intentionally designed to block communities of color from generating wealth. For example, programs such as the Gl Bill and Social Security have historically excluded many Black Americans, thereby deepening the racial wealth gap and perpetuating the cycle of poverty. In 2025, the Rhode Island state legislature created a legal framework for Baby Bonds for children born to a family enrolled in the Rhode Island Works program.

• New Measures in the Proposed FY2027 Budget: The proposed FY2027 budget does not include any new measures to fund or expand the Rhode Island Baby Bonds Trust.

• Additional Opportunities: While tying Baby Bonds to Rhode Island Works effectively targets some of the state’s poorest residents, it significantly narrows the eligibility pool. In 2023, Connecticut launched its own Baby Bonds program, which tied the eligibility requirements to the state’s Medicaid program. The state should consider allocating a sustainable revenue source to fund the Baby Bonds program, which would represent a long-term, strategic investment in the upward social mobility of low-income Rhode Islanders.

CRIMINAL JUSTICE

• Status quo: Rhode Island last enacted bail reform in 2008, ending cash bail in some situations. Due to a disproportionate lack of ability to afford bail, Black Rhode Islanders spend a disproportionate amount of time in pre-trial detention. Although there might not be significant revenue impacts from bail reform, any reduction in unnecessary overnight detentions could yield some revenue savings.

• New Measures in the Proposed FY2027 Budget: The proposed budget does not include any new proposals to improve the state’s cash bail system.

• Additional Opportunities: Cash bail reform, including pre-trial supervised release alternatives, may cost some state revenue, but it would benefit Rhode Islanders by decreasing time spent in pre-trial detention, which can disrupt their ability to make a living. These reforms would likely have a strong positive effect on Black Rhode Islanders, who the current system has disproportionately impacted. Overall, such reform might generate economic benefits for individuals, families, and the state.

PAID FAMILY LEAVE

• Status quo: Rhode Island became one of the first states in the nation to pass Paid Family Leave in 2013 through the Temporary Caregiver Insurance (TCI) program, part of the state’s Temporary Disability Insurance (TDI) program. Since then, many other states, including neighboring Massachusetts and Connecticut, have passed more extensive paid family leave programs, which provide 12 weeks of leave and tiered/higher wage replacement rates to minimum wage workers who need time off from work (without losing their jobs) to care for a seriously ill family member or to bond with a new child. The benefit length was increased from 4 to 6 weeks over the course of two years by 2022 and from 6 to 8 weeks over the course of two years by 2026. The benefit amount will increase to 75% of workers’ average weekly wages by 2028. Rhode Island state employees and self-employed workers remain unable to access TCI.

• New Measures in the Proposed FY2027 Budget: The proposed budget does not include proposals to strengthen the state’s Paid Family Leave program.

• Additional Opportunities: Rhode Island should expand TCI to provide up to 12 weeks of leave, allow caregiving leave for grandchildren and other dependents, and offer an opt-in for gig workers, sole proprietors, and the self-employed. Currently, many low-wage workers cannot afford to participate because the program replaces only a portion of their income, even though it requires their contributions. Increasing the wage replacement rate would expand access for lower-income workers, who are disproportionately women and people of color, and improve equity. Contributions could also be made more equitable by applying the payroll tax to income up to the Social Security contribution limit ($184,500 in 2026), as most states with paid family leave do. Because the program is fully worker-funded, these changes would not impact state General Revenue.

CONCLUSION

The examples shared in this review, although not comprehensive, show what can be accomplished when an equity lens is applied. Policymakers should use an equity lens from the start. For example, they could ask: Does Rhode Island’s public transit program increase equity, and for whom? Even so, can it be improved to increase equity further? What policy proposals would trigger an improvement? Public transit is only one of several policy areas considered in the review, and one of maybe two dozen policy areas included in the state budget and expenditures each year. Applying an equity lens will help remove systemic inequities and prevent new disparities from emerging.

Racism and sexism are embedded in our state’s laws, policies, and programs. As a result - and despite decades of efforts - wage, wealth, health, and other significant gaps persist, impacting Black, Latino, Indigenous, Asian & Pacific Islander communities, and Rhode Islanders of all genders, including non-binary people. Within various racial and ethnic groups, women have often faced additional disparities in many of these policy areas; likewise, disparities experienced by women often vary by race and ethnicity. Applying an equity lens to our state budget and investing in the health and well-being, economic development, and leadership and empowerment in and across these communities, particularly by focusing on those who experience the most profound inequities, will result in a more prosperous Rhode Island.