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Governor McKee’s unveils FY 2025 budget

Budget totals $13.7 billion, addresses education, health, housing

On Jan. 18, Gov. Dan McKee unveiled his budget proposal for fiscal year 2025. The budget proposes funding for key issues such as education, health, housing and economic transitions. 

The budget also proposes four ballot initiatives totaling $345 million in general obligation bonds. If approved, they will appear on the November ballot.

Education

McKee proposed increasing funding for multilingual learners “from 15% to 25% of the per-pupil amount” in the three “lowest proficiency categories” to improve English proficiency among Rhode Island students. In a separate release, he noted that pandemic-related learning disruptions disproportionately affected historically underserved students, including multilingual learners.

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The budget proposal includes free meals for roughly 6,500 students that currently receive them at reduced cost.

The proposal designates $15 million toward coaching services for local education agencies and professional development opportunities for teachers to “improve (student) outcomes  in math and English language arts.” It also allocates $5 million for better quality out-of-school activities and programming. 

McKee also intends on increasing the state funding formula aid by $19.2 million. The formula considers necessary educational costs and supplemental student programs. The additional investment would increase per-pupil funding by $459, for a total of $12,335 per student. 

Health and human services

The budget proposal also allocates $51.2 million in overall funds to phase in the increased Medicaid rates proposed by the Office of the Health Insurance Commissioner in 2023. The OHIC estimated the increased rates to produce a $45 million fiscal impact. 

McKee also proposed allocating $284 million for state-directed payments to hospitals in an effort to “improve quality and create better rate parity between commercial health insurance and Medicaid rates.”

McKee also proposed $79.7 to support Certified Community Behavioral Health Clinics. According to the press release, such clinics can “reduce reliance on emergency departments.”

Kerri White, director of communications for the Rhode Island Executive Office of Health and Human Services, wrote in an email to The Herald that the proposed funds would help set up CCBHCs across the state beginning July 1, with five clinics to run during the 2025 fiscal year. 

“CCBHCs are demonstrated to improve community health outcomes, reduce health disparities, and support providers to deliver higher quality and more sustainable services,” White wrote. 

The budget proposal also includes $10 million from State Fiscal Recovery Funds, which were allocated during the pandemic to help states across the country recover from the pandemic and strengthen the national economy, to support nursing homes. 

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According to an October 2021 report from the Rhode Island Health Care Association, “over the past decade, Rhode Island nursing home reimbursements have been cut by a quarter of a billion dollars.” A declining occupancy rate led to loss of revenue and multiple homes closing, the report added.

Taxes and economy

McKee’s plan for the economy includes lowering taxes for both individuals and corporations.

To do so, McKee proposed raising the threshold for retirement tax income exemption from $20,000 to $50,000, which is “projected to save Rhode Islanders $3.0 million in FY25.” He has also proposed lowering the corporate minimum tax from $400 to $350.

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To boost local businesses, McKee has proposed investing $1 million in grants to “municipalities and economic development agencies to revitalize main streets and business districts,” as well as $500,000 towards registering minority and women-owned businesses.

Housing

The budget proposal also requests $100 million to increase “affordable and middle-income housing production and infrastructure,” supporting communities and home ownership.

According to HousingWorks RI, affordable housing is defined in the state as “housing that has a sales price or rental amount that is within the means of a household that is moderate income or less.” 

The proposal’s release follows the launch of R.I. Pay for Success program in December 2023. According to the Executive Office of Health and Human Services, the program is expected to provide permanent supportive housing to between 175 and 200 “individuals experiencing homelessness who are high utilizers of the state’s healthcare, housing, and criminal justice systems.” 

Green economy

The budget allocates $50 million to advance Rhode Island’s green economy efforts. 

The largest portion of these funds, $20 million, would go towards improving infrastructure at the Port of Davisville, positioned as a hub for offshore wind.  

Infrastructure will also be supported through $10 million in financial assistance to improve the resiliency of “infrastructure, vulnerable coastal habitats, and rivers and stream floodplains,” according to the press release. 

Last year, flooding affected Providence’s Branch Avenue Shopping Plaza and firefighters had to rescue more than ten individuals. Also in 2023, a December storm sparked flooding, causing thousands to lose power. 

Michael Healey, chief public affairs officer for the Rhode Island Department of Environmental Management, wrote in an email to The Herald that he believes resiliency projects will save the state money in the long run. 

The proposed budget additionally includes allocations to support improving the Newport Cliff Walk, Brownfield remediation projects and local recreation projects. 

Other allocations 

The budget proposal additionally allocates $10 million of State Fiscal Recovery

Funds to RIPTA, which has continually faced budgeting challenges, The Herald previously reported. According to the Rhode Island Current, this $10 million represents “just about 8.1% of the $110 million transit advocates requested to address the agency’s budget shortfalls and improve service.”

McKee has also proposed $60 million towards building a state archive and history center to display documents such as “copies of the Declaration of Independence, letters from George Washington, and the original Public Laws and Private Acts of the General Assembly.” 


Avani Ghosh

Avani Ghosh is a Metro Editor covering politics & justice and community & activism. She is a sophomore from Ohio studying Health & Human Biology and International & Public Affairs. She is an avid earl grey enthusiast and can be found making tea in her free time.


Mikayla Kennedy

Mikayla Kennedy is a Metro editor covering Housing and Transportation. She is a sophomore from New York City studying Political Science and Public Policy Economics.



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