McKee's $13.7B state budget proposal puts more money into schools

PROVIDENCE, R.I. (WJAR) — Forty-eight hours after laying out the priorities for the first year of his first full term as governor, Rhode Island Gov. Dan McKee on Thursday released his proposed $13.7 billion budget for fiscal year 2024.

Education

McKee wants to increase the state’s education spending by $57.8 million. That includes providing districts a total of $8.5 million over a two-year period to offset an enrollment loss of 5,300 public school students, including a loss of 3,000 students in Providence alone.

“I think we will have to do is make adjustments at the district level, unfortunately, but I think all urban school districts are seeing this decline,” said Education Commissioner Angélica Infante-Green.

McKee is also proposing an expansion of the Wavemaker Fellowship to deal with teacher shortages. It would allow future teachers to apply for a student loan reimbursement program.

Asked if she believed it would be enough to help Rhode Island recruit teachers when neighboring states pay them more, Infante-Green said, “I’m always going to say we need more, I think it’s going to be a help the more that we can do to attract, to keep, we want to do that.”

Tax relief

McKee proposed using some of the $610 million of the state’s budget surplus to cancel the 3 cents a gallon increase in the state gasoline tax set to take effect in July.

Another proposal would reduce the sales tax from 7% to 6.85% with the goal of making incremental reductions based on future budgets.

At that rate, it would take five years for Rhode Island to match Massachusetts' 6.25% sales tax.

Office of Management and Budget Director Brian Daniels defended the governor's decision to offer smaller breaks, instead of sending taxpayers a one-time check like Massachusetts did.

“The difference is this is long-term tax relief, and this is about making Rhode Island businesses more competitive,” said Daniels.

Daniels said this will prevent the one-third of Rhode Islanders who live within three miles of Massachusetts and Connecticut from shopping there. Although no known study has proven that to be a problem.

Daniels added, “This is a permanent change. Because of the fact that we are out of line with our neighbors, the governor wants to make sure that we have a long-term approach to bring that down. So you could do additional support on a one time basis, but that does not make Rhode Island more competitive in the long term.”

McKee’s budget would also refund state taxes on four months’ worth of electricity and natural gas bills to help offset rate hikes. That is projected to provide an average of $24 to $30 to energy customers.

Transportation

About $20 million would go to cities and towns for roads, sidewalks and bridges. Another $70 million will make up for the revenue lost, after the Rhode Island Department of Transportation was forced to shut off the truck tolls.

“That is for fiscal year ‘23 and ‘24, that is assuming, we are not going to resume them until at least fiscal year 2025, we’ll see how the court case plays out, and we will make any modifications at that time,” said Daniels.

The $70 million investment nearly offsets the $102 million the state made from the tolls, plus the $8 million spent defending them in court.

COVID-19 response

The budget would move $34.9 million of money that hasn’t yet been spent on COVID-19 response into the next fiscal year, and create a $61 million COVID-19 contingency fund.

Housing

McKee’s proposed budget would add staff to the Department of Housing, and increase funding to expand shelter capacity for the homeless.

Rainy day fund

The budget also puts $55 million into a separate fund to supplement the state's rainy day fund, and leaves $8.8 million on the table. It would also increase the rainy day fund itself.

The budget will now go to the legislature, which will hold hearings and make changes over the next several months.

One of the more controversial items will likely be a $630,000 investment to provide abortion coverage to state employees and Medicaid recipients.

NBC 10's Tamara Sacharczyk contributed to this report.