These two articles describe how the RI House version of next year's state budget improves on the version submitted by Governor Dan McKee. In the first article, Rob Smith describes how the new budget affects the environment. In the second, Steve Ahlquist describes how the new budget effects people.
House Reworks McKee’s Budget to Save Renewable Energy
Programs, Make Green Bond Greener
By Rob Smith / ecoRI News staff
The programs were on the chopping block, when Gov. Dan McKee announced, as part of his fiscal 2027 budget proposal, rollbacks to energy efficiency investments and caps to the state’s net metering solar program.
House leadership unveiled their own version of the budget
late last week, with many of the changes and adjustments to those programs
stripped out. The only significant cut is lowering the cap on net
metering projects from 275 megawatts (MW) to 175 MW by 2031; a small
change given solar companies are nowhere near close to planning projects that
exceed 100 MW.
Still included in the budget is the governor’s proposal for
an alternative compounding tariff. Net metering project developers can opt in
for the tariff that will compound at 2.75% annually for 25 years starting in
2028.
The state’s Renewable Energy Standard (RES) remains intact,
including its original timeline of reaching 100% of retail electricity sold
sourced from renewable energy by 2033. The governor had proposed pushing back
the final deadline by 17 years to 2050, a move that threatened to upend years
of careful climate planning by state agencies.
House lawmakers are including the governor’s bid to expand
the eligible pool of renewable resources. For the first time next year, if the
budget passes as is, both hydropower and nuclear power will be added to the
list of renewable energy resources that comply with the RES.
The Public Utilities Commission will also study the RES and
any impacts associated with changes to it, and report back to the General
Assembly by next year.
“In putting together this budget we were really focused on
the future,” House Speaker Christopher Blazejewski said during Friday’s press
briefing. “About children and families, not just what Rhode Island looks like
today but going forward.”
Coming into 2026 it looked like a bloodbath for the state’s
climate priorities, between the governor’s proposed cuts and a structural
deficit in the state budget of around $100 million. Rhode Island has also
experienced its fourth straight winter of high energy rates for gas and
electric, and a governor keen to lower utility bills by any means necessary.
But environmental advocates notched another win this year,
defending much of the progress on climate and environment regulations made in
the past five years. Preserving energy efficiency and renewable energy was
a key legislative goal of the Environment Council of
Rhode Island, a coalition of the state’s chief environmental nonprofits and
advocates.
So was making the Green Bond greener. This election cycle’s
Green Bond will total $55 million, and look markedly different than what McKee
originally proposed in January. Gone is the $10 million set aside for energy
efficiency programs; instead lawmakers increased bond funding for facilities
improvements within the Department of Environmental Management and the
Resilient Rhody program, and added $3 million for farmland preservation and $3
million for open space acquisition programs.
“Our caucus spoke over and over again about making the Green
Bond greener,” Blazejewski said. “And we did just that.”
Two key changes for public transit in Rhode Island also came
with the House’s reworked budget. Lawmakers added another $5 million, on top of
the governor’s proposal, to the Rhode Island Public Transit Authority to close
its budget shortfall. The allocation will not be enough to reverse the service cuts implemented by the agency last year,
however.
The director of the Department of Transportation will no
longer chair the RIPTA board under the House version of the budget. A
longtime ask of transit advocates, who strongly opposed the law
that empowered the RIDOT director when it passed the Legislature a few years
ago, House leadership said they viewed the RIPTA board chairmanship as “a
conflict of interest.”
One last thing of note: House lawmakers are looking to jump
start an energy benchmarking plan for state and municipal buildings. Under the
program written into Article 11 of the budget, all state department and
agencies will have to start tracking and reporting their energy usage for
buildings greater than 25,000 square feet in size.
The program would be run by the Office of Energy Resources
and begin March 31, 2029. Municipal buildings can voluntarily follow the
state’s program, with OER providing “technical and financial assistance.”
The House Finance committee voted the budget onto the House
floor, where it is expected to receive a full vote Friday, June 5.
Though imperfect, the Rhode Island General Assembly takes
a tentative step toward a budget that prioritizes people
The Rhode Island House of Representatives will
be taking up the finalized, balanced $15.2 billion FY2027 Budget (H7127A)
later this week, after the House Finance Committee voted 11-2
on Friday to send it to the House floor for consideration.
“In putting together this budget, we were focused on the
future, on children and families, on how Rhode Island looks, not just today,
but going forward,” said Speaker Christopher Blazejewski. “We are
aware of the challenges in our state and the changes in the federal government,
and for some particular issues at the state level, we’ve tried to address
them.”
Here’s a breakdown:
Health Care
- Medicaid
rates will be improved by funding a full Office of Health Insurance
Commissioner (OHIC) rate review. Implementing the $115 million in
increased support over one year will better position the state financially
in future years.
- We
put significant investment in raising Medicaid rates,” said Speaker
Blazejewski. “In particular, we did the full Office of the Health
Insurance Commissioner (OHIC) rate review. There was a half-year in the
governor’s proposed budget; we did the full OHIC rate review as part of
this budget.”
- The
committee recommended an additional $15 million over what the governor
proposed for uncompensated care to the state’s hospitals. The budget
contains the proposal to provide $20 million in support for Rhode
Islanders to access affordable health insurance through Health
Source RI.
- “We
invested significant money, an additional $26 million, to support
uncompensated care in support of the hospitals,” said Speaker Blazejewski.
“This is something that we’ve seen in light of changes made to
Medicaid at the federal level. To keep our hospitals functioning and
provide the services our Rhode Island residents need, we need to continue
supporting them.”
- The
committee allocated $1.6 million for the Newport Hospital Birthing Center
to support continued operations.
- “We’ve
included the government’s proposed $1.6 million of general revenue. We
have also, through uncompensated care, improved the financial standing of
Brown Health, to which the Newport Birthing Center is connected. We’ve
also added… language that we think will make it harder to close the
Newport Birthing Center, based on all the testimony we received about how
important that facility is to people down there.
- As
part of a continuing effort to address the state primary care provider
shortage, the committee approved $5 million for startup costs for the
proposed new medical school of the University Rhode Island.
- “We
worked closely with the Senate in putting together a proposal that we
think will be helpful,” said Speaker Blazejewski. “We will work to
create the process of creating a medical school at URI. That is an
investment of $5 million this year, plus $7 or $8 million in future years
to eventually establish a medical school at URI, which we think will help
alleviate some of the primary care challenges we face in accessing
healthcare.”
Education
- The
committee added more than $24 million to the governor’s proposal to fund
direct state education aid fully.
- “That
was done in several ways, first of all, by increasing the student success
rate to 43%,” said Speaker Blazejewski. “That will help the most
vulnerable students have the resources their cities and towns need to
support education.”
- The
City of Central Falls will also regain immediate control of its school
district.
- “It
is important to our smallest city, so we are returning the schools to
Central Falls,” said Speaker Blazejewski. “Providence had their
schools returned this year, and the Central Fall delegation and Mayor
Rivera expressed an interest in getting their schools back, and we’re
acting to support that.”
- “Question
one will be a higher education bond that’ll be $275 million, including
$165 million for the health building at URI,” said Speaker Blazejewski.
- The
bond aims to improve higher education facilities and strengthen workforce
preparedness. It includes $50 million for renovations to the Adams
Library at Rhode Island College to accommodate a student success and
career readiness center, and $60 million for a career and technical
Workforce Innovation Center at the Warwick campus of the Community
College of Rhode Island.
- Rhode
Island College’s Hope Scholarship will also be extended an additional
three years.
- “We
have also included the governor’s enhanced proposal on special education,”
said Speaker Blazejewski.
Taxes
- The
committee included a proposal to institute a high-earner’s tax of 1% a
year over three years for tax filers earning more than $1 million a year.
The marginal tax rate takes effect gradually over three years as measures
passed last year as part of President Trump’s H.R. 1 affect the state more
acutely. This will also allow the state to collect information on its
impacts.
- “We
have done a millionaire’s tax at 1% per year over three years,” said
Speaker Blazejewski. “It’s a three-year phase in. In year one,
2027, it will go up 1%. In year two, 2028, it’ll go up another 1%.
Finally, in year three, 2029, it’ll go up another 1%. We did this for a
lot of reasons. If you look at the impacts of H.R.1 on our budget, the
out years are concerning, and we want to be sure that revenue comes
online at the same time we see decreases in federal support. It’s always
a balance to find the right mix for tax proposals, but we think this is a
prudent way to increase revenue over time, phasing it in so it has less
of a shock, more time to be absorbed, and comes online exactly when we
lose federal revenue.”
- To
support families, the committee included a new refundable child tax credit
of $330 per child. This proposal will help families when combined with the
current dependent exemption, which remains unchanged. Childcare
eligibility will also be increased to 285% of the federal poverty level.
- “I
want to thank the governor for including a proposal on the child tax
credit. And I want to thank the Senate President, Senate staff, and the
Senate Finance Committee for working to make some changes to that tax
credit that we believe will cost a little more but provide even greater
benefits to families in Rhode Island,” said Speaker Blazejewski. “We
kept the tax credit as it exists and created a new tax credit- this was a
proposal the Senate worked on - this new tax credit is fully refundable.
The total cost in a full year is $46 million. For almost everyone, this
is a benefit over the proposal in the governor’s budget. For some, it’s
about breakeven, but especially for middle-income households, it is an
improvement over the governor’s proposal.
- The
committee also expanded eligibility for the Social Security income tax
exemption by removing the age threshold, which is the same as the first
year of the governor’s proposal.
- “We
included the first year of the social security tax reduction that was in
the current budget,” said Speaker Blazejewski. “I think it’s about
$3.5 million. This component eliminates the minimum age requirement to
qualify for a Social Security tax reduction. That was age 60. If you’re
under 60 and you otherwise qualify, you will now get the same reduction
as everyone else. Hopefully, we have a better budget next year, or at
least, given some of the ways we structured things, we’re in a better
position to take another look, and maybe we go further on the social
security tax reduction.”
Government reform
- The
budget includes Speaker
Blazejewski’s proposal to create an independent Office of the
Inspector General to investigate the state and quasi-public agencies, as
well as municipal programs that use state funds, to prevent and detect
fraud, waste, abuse, and mismanagement.
- “The
proposal of an Inspector General’s office is in the budget. We see this
as necessary for a variety of reasons,” said Speaker Blazejewski. “The
relationship with the federal government is changing. They are looking
for any reason to cut or hold back resources that may be coming our way,
and we need to make sure our programs are working. Also, in light of some
high-profile state failures like the Washington Bridge, the Amtrak
overpass, and the ERS payroll system, there have been major issues that
have cost the state hundreds of millions of dollars. So we proposed
establishing an Inspector General’s office to focus on that issue. I want
to give credit to Chairman Shanley, Representative Lima, and
Representative Nardone. I know that recently Republicans have worked on
this issue, and I appreciate them continuing the conversation. It’s a
bill I started working on in 2015, but they’ve really been driving the
conversation lately, so I want to give them credit for their work on it.”
- The
budget will require an audit of the Rhode Island Department of
Transportation (DOT) ’s efficiency and performance.
- “We
intend to include an audit of DOT and their maintenance work. We have had
too many high-profile failures, and we need to audit their maintenance
program,” said Speaker Blazejewski. “Regarding government reform,
we have removed the DOT director as the chair of RIPTA (Rhode
Island Public Transit Authority). Our DOT director will still be on
the RIPTA board; we think it’s a conflict of interest. We need RIPTA to
have its own chair, so they’ll elect a new chair who is not the DOT
director.
- Statement
from RIPTA Chief Executive Officer Christopher Durand Regarding State
Budget
“On behalf of the over 800 employees who provide service
to hundreds of thousands of Rhode Islanders every day, we express our gratitude
to Governor McKee, Speaker Blazejewski, Senate President Lawson, and all
members of the General Assembly for ensuring RIPTA’s FY 2027 budget gap is
addressed.
“RIPTA has long fought for adequate and sustainable
funding to maintain and improve service. We know that when transit service
meets the needs of Rhode Islanders in getting them to work, school, and medical
appointments, they utilize RIPTA. Our partnerships with Miriam Hospital,
Electric Boat, Naval Undersea Warfare Center, Amazon, and other employers
support the state’s economy and help ensure prosperity for Rhode Island
families. Our innovative services, such as Flex On Demand, will help increase
ridership at a lower cost.
“When Rhode Island invests in public transit, it is
investing in the success of students, residents, and businesses. We will
continue to do everything in our power to improve service for our riders. We
welcome a continued discussion with our elected leaders as we work together to
move transit forward.”
Housing
- The
committee included a $120 million housing and community development bond
question on November’s ballot to support affordable housing construction
and redevelopment and homeownership programs.
Transportation and public transit
- The
proposal addresses the Rhode Island Public Transit Authority’s deficit by
addressing the operating budget shortfall and providing additional funds
for buses and bus shelter improvements.
- “The
governor’s proposal, as to the two-cent gas tax, was not included in this
proposal,” said Speaker Blazejewski. “What we did was restructure
things to give RIPTA more funding than the governor’s proposal. It was
done in a way that ultimately resulted in RIPTA receiving more resources
than it otherwise would have under the governor’s proposal.”
- Steve
Ahlquist: You mentioned that RIPTA has additional funding. Are
they fully funded?
Speaker Blazejewski: They’re funded above the
governor’s proposal. They’re better off than they were under the governor’s
proposal. We have invested in RIPTA as a priority… I don’t know what the term
“fully funded” means to you, but we hope to get there.
Steve Ahlquist: It means routes that have been
cut are being fully restored.
Speaker Blazejewski: I don’t know if they can
restore all of them. I don’t have those specific answers, Steve. My apologies.
- The
budget also prohibits the director of the Department of Transportation
from serving as the chair of its board of directors, as is currently the
case, to address potential conflicts, since RIPTA and RIDOT often compete
for funding from the same sources.
- “Regarding
government reform, we have removed the DOT director as the chair of RIPTA (Rhode
Island Public Transit Authority),” said Speaker Blazejewski. “Our
DOT director will still be on the RIPTA board; we just think it’s a
conflict of interest. We need RIPTA to have its own chair, so they’ll
elect a new chair who is not the DOT director.”
Environment
- The
committee did not include the governor’s proposal to roll back energy
efficiency programs or other measures that support the state’s efforts to
reduce reliance on carbon-emitting fossil fuels. The state’s 2033 goal of
fully utilizing renewable energy for electricity generation remains intact
by expanding the state’s renewable energy standard to include nuclear and
hydropower generation, which will bring down rates for consumers.
- “I
want to thank the governor for starting the conversation on energy
affordability issues in his budget,” said Majority Leader Katherine
Kazarian. “He started this conversation, and the General Assembly
took his ideas and ran with them. In this budget, we’ve included two
major parts from his budget. First is addressing the immediate cost
savings for the ratepayer by expanding the renewable energy standard to
include hydro and nuclear energy. Ratepayers will see immediate savings
by adding that to the definition. Second is the long-term savings for
ratepayers by continuing to invest in renewable energy projects here in
Rhode Island and supporting those programs.”
- “Because
nuclear energy is not virtually pollution-free, inexhaustible, safe, nor
efficient, nuclear power can not be considered truly clean, renewable
energy. Nuclear energy carries many risks to human and environmental
health by way of the pollution it generates, despite the fact that the
pollutants resulting from nuclear energy are not of the planet-warming
variety. Nuclear energy is not the best use of our resources when we have
better, cleaner options available.” [See: Is
Nuclear Energy Renewable? by Johanna Neumann and Caitlin Soch
at EnvironmentAmerica]
- The
proposed green bond has become greener by increasing the total bond amount
to $55 million and adding funds for open space and increased support for
climate resiliency measures.
- “Our
caucus spoke over and over about making the green bond greener, and we’ve
done that by moving things around to increase the resiliency,” said
Speaker Blazejewski. “We took out an energy efficiency piece that
received negative testimony and used those resources to go towards
resiliency, and also open space, pharma acquisition land, and some
facility improvements in the state. Additionally, we’ve included the
creation of the state archives and state history center, as well as a
preservation grant program, as an additional question.”
EPI Executive Director Weayonnoh Nelson-Davies’ statement
on the Proposed Fiscal Year 2027 Budget from the Rhode Island House of
Representatives:
“The Economic Progress Institute (EPI)
applauds Speaker Blazejewski, Majority Leader Kazarian, House leadership,
legislative champions, coalition partners, and advocates across Rhode Island
for advancing a Fiscal Year 2027 budget proposal that makes meaningful
investments in Rhode Islanders while taking an historic step toward a fairer
tax system.
“The proposed budget includes one of the most significant
tax fairness victories in Rhode Island in decades: a surtax on taxable income
above $1 million. At a time when working families continue to struggle with the
rising cost of housing, child care, healthcare, and other necessities, House
leadership has recognized that those who have benefited the most from Rhode
Island’s economy can afford to contribute a little more to support the state’s
future and make us a more competitive state. This proposal represents a major
milestone in the long-standing effort to build a tax system that is more
equitable, sustainable, and better able to meet the needs of Rhode Islanders.
“Just as importantly, House leadership rejected numerous
proposals that would have dramatically reduced state revenues, including:
- The
weakening or repeal of the estate tax;
- The
repeal of the corporate minimum tax;
- The
cutting of personal income tax rates;
- The
creation of a 30-year tax credit incentive for the construction of data
centers; and,
- An
increase in the income threshold for exemption from taxation of social
security income.
“Taken together, these proposals amounted to nearly half a
billion dollars in annual revenue loss and would likely have resulted in severe
cuts to many critical programs and services. We also applaud the inclusion, at
a very modest cost, of the Governor’s proposal to remove the age restriction
that has prevented low-income Rhode Islanders below full retirement age from
using the tax exemption for Social Security income.
“This budget also makes important investments in children,
families, and healthcare that help many more Rhode Islanders meet their basic
needs and thrive. They include:
- Establishing
a permanent refundable Child Tax Credit (CTC) of $330 per child that would
phase out at $88,500 for single-filers and $110,640 for joint-filers. The
CTC will not replace the dependent exemption so that Rhode Island families
can benefit from both tax credits;
- Strengthening
Rhode Island Works cash assistance by allowing more child support payments
to go to children, an increase from $50 to $100 for one child or $200 for
two or more children;
- Strengthening
the Child Care Assistance Program (CCAP) by increasing eligibility from
261 to 285 percent of the federal poverty level, and increasing the infant
reimbursement rates for center-based child care providers by five percent;
- Extending
the successful Child Care Assistance for Child Care Educators pilot
program by two years;
- Bolstering
healthcare by implementing the full Medicaid reimbursement rate increase
recommended by the Office of the Health Insurance Commissioner;
- Helping
to stabilize the healthcare system by allocating $26 million to hospitals
for uncompensated care, as people lose health insurance due to H.R.,– $15
million more than the governor proposed;
- Providing
$20 million to help Rhode Islanders purchase health insurance through
HealthSourceRI by partially replacing federal Affordable Care Act
subsidies that Congress allowed to expire;
- Allocating
$1.6 million for the Newport Hospital Birthing Center to support continued
operations;
- Allocating
$377,000 from general revenue to secure the Maternal Infant & Early
Childhood Home Visiting (MIECHV) matching federal funds, for a total of
$10.9 million to sustain and strengthen family home visiting programs and
other services;
- Sustaining
the funding for the Pediatric Psychiatric Resource Network (PediPRN) and
Moms Psychiatric Resource Networks (MomsPRN);
- Fully
funding the Rhode Island Public Transit Authority (RIPTA) by allocating
additional funding from the Highway Maintenance Fund and adding $15
million for bus and bus shelter improvements; and,
- Decoupling
Rhode Island state income taxation from the acceleration of R&D
depreciation to save the state $22.6 million next year, as proposed by the
Governor, and from two additional H.R.1 provisions that help high-income
tax filers without benefiting the state economy – one of these, the
Qualified Small Business Stock exclusion, applies only to C-Corps and
mostly benefits millionaires. This will save an additional $1 million next
year and more over the following years.
“While EPI does celebrate the budget’s inclusion of a
millionaires surtax as a bold and valuable move, we have some concern that this
proposal does not go far enough (falling short of the top one percent proposal)
or quickly enough - phased in instead of the three percent surtax in Fiscal
Year 2027 - to prepare the state for the impending loss of federal revenue.
While much work remains, particularly as Rhode Island prepares for the
possibility of devastating federal cuts to Medicaid, SNAP,
and other essential programs, this budget demonstrates what is possible when
policymakers choose investment over austerity and opportunity over scarcity.
“It is the result of years of advocacy, research, organizing, coalition-building, and leadership by Rhode Islanders and legislative champions who refused to accept that economic hardship and growing inequality were inevitable. We are especially grateful to the many legislative champions who demonstrated the courage and leadership necessary to advance bold solutions in the face of significant opposition.”
SteveAhlquist.news is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
.jpeg)
