Governor Dan McKee today submitted his fiscal year 2026 budget to the General Assembly, emphasizing investments in education, workforce development, and public health while maintaining a commitment to avoiding broad-based tax increases. This marks the fifth consecutive budget proposed by McKee without a single broad-based tax hike.
“This budget is about protecting the progress Rhode Island has made over the last four years while positioning our state to pursue all the promise that lies ahead,” McKee said. “As we return to a pre-pandemic fiscal environment, we must take steps to right-size government while preserving programs that improve educational outcomes, raise incomes, and make our residents healthier – three pillars in our Rhode Island 2030 plan.”
Key Investments in Education and Workforce Development
The Governor’s proposal focuses heavily on equipping Rhode Islanders for the future job market:
- Learn365RI Grants: $2.5 million for high-quality out-of-school programming to develop critical skills, complementing a $5 million FY 2025 investment.
- K-12 Education: $43.4 million increase in aid, raising per-pupil funding to $13,322.
- Ready to Build Initiative: $800,000 to launch a pre-apprenticeship pathway at the Community College of Rhode Island (CCRI) for building trades.
- Culinary Hospitality Hub: Investment at CCRI’s Newport Campus to train culinary and hospitality professionals.
- Work-Based Learning: $6 million to create 1,000 new opportunities for youth through programs like Real Skills for Youth and PrepareRI.
- Dual Enrollment Support: $2.9 million to expand access to postsecondary courses for high school students.
- Higher Education: A $10.6 million increase across URI, RIC, and CCRI, including $1.7 million for career readiness initiatives.
Infrastructure and Transportation Enhancements
McKee’s budget also proposes significant funding to modernize Rhode Island’s infrastructure:
- RhodeRestore Program: $6.5 million additional investment to support local transportation projects.
- EV Registration Fees: New fees of $300 for electric vehicles and $150 for plug-in hybrids to offset declining gas tax revenues and support infrastructure projects.
Health and Wellness Initiatives
Promoting public health and safety is a cornerstone of the FY 2026 budget:
- Assault Weapon Ban: Proposed ban on future sales, possession, and manufacturing of assault weapons, along with a sales tax exemption on gun safety equipment.
- Primary Care Rates: Recommended review to strengthen Rhode Island’s competitive position for primary care providers.
- Health Professional Loan Repayment: $400,000 for loan assistance to primary care providers in shortage areas.
- Senior Services: Increased funding for senior support services from $1.4 million to $1.6 million, advancing the goal of $10 per senior.
Efficiency and Cost-Cutting Measures
The Governor’s proposal outlines strategies to streamline state government:
- Agency Consolidation: Purchase of a commercial building in East Providence to co-locate state agencies for long-term savings.
- Corrections Reform: Closing the Minimum Security Facility and consolidating operations into the Medium Security Facility for enhanced programming.
- Fraud Prevention: Adding Medicaid positions to identify provider fraud, projected to save $2.3 million in FY 2026.
Addressing Homelessness
The budget proposes $15.7 million to combat homelessness, funded by new and sustainable revenue streams:
- Hotel Tax Expansion: Applying a 5% tax to whole-home short-term rentals, expected to generate $2.1 million in FY 2026.
- Real Estate Conveyance Tax: Raising the tax on properties over $800,000 to 1.25%, projected to add $2.3 million in revenue.
As McKee’s FY 2026 budget heads to the General Assembly, it seeks to balance investments in the state’s future with fiscal responsibility, maintaining Rhode Island’s post-pandemic recovery momentum.
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