Tax Dan McKee today signed the state budget for the fiscal year 2023, making critical investments to maintain Rhode Island’s economic momentum. The budget makes historic investments to address the housing crisis and strengthen Rhode Island’s economy while providing targeted tax relief for families, veterans, and local businesses.
For the signing ceremony, the Governor was accompanied by Lieutenant Governor Sabina Matos, the Speaker of the House of Representatives, K. Joseph Shekarchi; Senate President Dominick J. Ruggerio; the Chairman of the House Finance Committee, Marvin L. Abney; and the Chairman of the Senate Finance Committee, Ryan W. Pearson.
“Rhode Island has the momentum: We have the lowest unemployment rate in more than 30 years and our economic recovery ranks second in the nation according to Moody’s. This budget gives us the tools to ensure our momentum continues,” Governor McKee said. “I am proud to sign a budget that includes our historic investment to finally address the housing crisis while providing much-needed tax relief for local families and businesses without a single tax relief service increase. This budget represents a truly collaborative effort that will help Rhode Island take advantage of the once-in-a-generation opportunity before us.
Tax relief service
“This year’s budget makes significant investments that will strengthen our economic recovery while investing in critical areas that have long been neglected,” said Lieutenant Governor Sabina Matos. “The historic $250 million housing investment, the expansion of Medicaid coverage for all children and women after childbirth up to 12 months, and the elimination of taxes on military pensions are things I am proud to have strongly advocated for. . I applaud Governor McKee, the Speaker and the President of the Senate for finalizing a budget that will benefit all Rhode Islanders.”
“This budget is the product of months of collaboration, and I am proud that it includes many of the Senate’s top priorities. It provides immediate relief to Rhode Islanders dealing with the burden of inflation and makes important long-term investments in the future of our state,” said Senate Chairman Dominick J. Ruggerio (D-Dist. 4 , North Providence, Providence). “We’ve eliminated the car tax a year ahead of schedule, and the vast majority of Rhode Islanders will never get another car tax bill. And we have wisely used our one-time revenue windfall, both federal and state surplus dollars, to make one-time investments that will pay off for decades.”
Providing targeted tax relief for families, veterans, and local businesses
House Finance Committee Chairman Marvin L. Abney (Dt. 73rd, Newport, Middletown) said, “This budget is the product of a true partnership between the House, Senate, and Administration, who will continue to drive Rhode Island’s recovery and help taxpayers and residents with the challenges we still face today. It was designed to serve the good of all with a responsible approach to protecting taxpayers from potential future shortfalls while supporting the vital services our resident’s trust and need. I congratulate everyone who participated in this important legislation and looks forward to seeing the investments made within the budget benefit all Rhode Islanders well into the future.”
“Our priorities have been to secure a budget that cares for Rhode Islanders today and in the future. The immediate benefits of this budget include specific economic relief such as the child tax credit, early elimination of the automobile excise tax, property tax relief for the elderly and disabled, income tax breaks for veterans and retirees. In the long term, we are setting the stage for a strong blue economy in our state, changing the trajectory of healthcare through reimbursement rates that will better support our workforce and rebalancing the healthcare system, and investing in our infrastructure. school, higher education facilities and our information technology capital.
Historic Housing Investment
Rhode Island is making a unique, generation-long investment of a quarter of a billion dollars in housing at all levels, a promise Governor McKee made during his first State of the State address. This commitment represents the largest investment of American Rescue Plan funds in the state budget. This bold investment also includes $29.5 million the Governor immediately earmarked for housing in his affordable Rhode Island Rebounds down payment approved by the General Assembly in January.
The budget, combined with Rhode Island Rebounds investments, allocates $100 million for affordable housing development; $30 million for down payment assistance to help homebuyers struggling with rising prices; $25 million for community revitalization $20 million to assist individuals and families experiencing homelessness or housing instability; $21.5 million to create more housing for the workforce; $25 million for the acquisition of properties to be redeveloped into affordable and supportive housing; $15 million to increase shelter capacity and $3.5 million to create a state housing plan and increase capacity at the Office of Housing and Community Development.
Strengthen the Blue Economy and Combat Climate Change
Includes a $70 million investment to strengthen our Blue Economy, $30 million in bioscience investments, $60 million to upgrade infrastructure at the Port of Davisville, and $35 million to build a game-changing wind turbine staging area at the South Quay Marine Terminal.
The budget invests $25 million to create an Electric Heat Pump Incentive Program and $23 million to expand Rhode Island’s network of electric vehicle charging stations.
Supporting children and families
Investing in child care is not just an investment in families and our economy today, but also for generations to come. The budget makes bold investments that position Rhode Island as the best place to raise a family and find real economic opportunities.
This budget also covers all Medicaid income-eligible children and extends postpartum Medicaid coverage for new moms from 60 days to 12 months, regardless of immigration status.
Makes vital investments in children’s health care and development, including stabilization funds and rate increases for pediatric primary care providers and early intervention providers.
In addition, the budget invests $20 million in the nonprofit sector through the RI Foundation to combat food insecurity and directly funds assistance to survivors of domestic violence.
The budget offers a specific tax reduction plan to provide relief for families, veterans, and local businesses.
The tax cut plan includes the Governor’s proposal to offer child tax rebates of $250 per child, up to three children, for Rhode Island residents earning up to $100,000 for an individual and $200,000 for joint filers. This plan would support nearly 110,000 Rhode Island families.
Supporting Small Businesses
In addition to unemployment insurance tax relief for businesses, the budget lowers the interest rate on certain back-tax payments from 18 percent to 12 percent and reforms tangible taxes.
It also creates a designated Taxpayer Steward within the Rhode Island Division of Taxation to guide small businesses and individuals through the tax process.
The budget finally allows Rhode Islanders to sell baked goods made in their home kitchens. Until now, Rhode Island was the only state in the country to restrict home cooking licenses to farmers.
The budget also allocates $6 million to create the Governor’s Minority Business Accelerator, which will strengthen the minority business community and help increase minority business ownership in the state.
Investment in our workforce and educational infrastructure
To ensure Rhode Island’s economic momentum is maintained, the budget makes strategic investments in the state’s workforce and educational infrastructure. The budget calls for a $300 million investment in the construction of K-12 schools to help ensure that all students have state-of-the-art facilities.
It also includes an additional $67 million to ensure school districts do not experience funding cuts due to pandemic-related K-12 enrollment declines.
