General Assembly approves 2022 state budget bill

 

STATE HOUSE – With a 30-7 vote in the Senate today, the General Assembly has approved a $13.1 billion state budget for the 2022 fiscal year that boosts key supports for vulnerable Rhode Islanders — particularly affordable housing — makes body cameras available for every uniformed police officer statewide and does not rely on the $1.1 billion in one-time federal American Rescue Plan funding for ongoing expenses.

The bill (2021-H 6122Aaa), which now goes to the governor, fully funds state aid to education, does not include any broad-based tax increases and continues the scheduled phase-out of the automobile excise tax, which is set to be fully eliminated after the 2023 fiscal year.

“We had tremendous opportunity with this budget, and we had to not only ensure that we have the appropriate government services, but also to ensure that we are responsible with the one-time cash infusion that we have this year. The actions we are taking will reduce our structural deficit, invest in our infrastructure, repay the money we used from our rainy day fund, and use the federal funding appropriately for investments like technology throughout government,” said Senate Finance Committee Chairman Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln). “I’m proud that we were able to include many Senate priorities, such as helping those with developmental disabilities and those with substance abuse issues, funding child care, investing in RI Works, reducing the burden on businesses and equipping police statewide with body cameras. We have made historic investments in the Department of Children, Youth and Families, including fully funding the 90-plus new employees they need to properly serve children in the state, a new computer system and flexibility to hire a high-quality director. This is a responsible budget that cares for Rhode Islanders today while investing in our collective future. I would like to thank the members of the Senate Finance Committee for the hard work and long hours they put into ensuring that this budget serves our state well.”

Said House Finance Committee Chairman Marvin L. Abney (D-Dist. 73, Newport, Middletown), “After experiencing the devastation of the COVID-19 pandemic, this budget not only protects and helps Rhode Island’s struggling residents, but it will also drive Rhode Island’s pandemic recovery into a successful future. Without broad-based tax increases and through the preservation and strengthening of services and programs that help the vulnerable, this budget is a bill that will support most Rhode Islanders attempting to get back to their normal way of life. I thank Speaker Shekarchi, Senate President Ruggerio and Governor McKee for their collaboration and leadership, as well as the dedicated members of the House Finance Committee who have spent countless hours vetting the budget and listening to the needs of the public during the committee process.”

To help address the state’s housing crisis, the bill creates a permanent funding stream for affordable housing creation through an increase in the conveyance tax on high-end real estate. The bill doubles the existing $2.30 rate on each $500 of the purchase price over $800,000. Gov. Dan McKee had included the provision in his budget proposal, but set the threshold at $700,000. The new funding is expected to generate about $4 million annually for affordable housing creation. Currently, Rhode Island is the only New England state that doesn’t have a permanent funding mechanism for affordable housing.

Lawmakers added another affordable housing provision, a proposal introduced by House Speaker K. Joseph Shekarchi in February as a separate bill (2021-H 5951) to create within the Executive Office of Commerce a deputy secretary of commerce and housing who will oversee housing initiatives and develop a housing plan that will include affordable housing, strong community building and neighborhood revitalization efforts.

The Assembly added a third new housing initiative, a $6 million pilot program that would use a “Pay for Success” model to create supportive housing with wraparound services for the chronically homeless population. The program is intended to improve the wellbeing of the individuals while also reducing their reliance on expensive emergency medical services and interactions with law enforcement.

Legislators also added a 30-percent benefit increase for Rhode Island Works, the state’s cash assistance and work-readiness program for low-income families. The rate has not been increased in 30 years. The current benefit, averaging $6 per person per day, is the lowest in New England. In February, 2,400 families were receiving Rhode Island Works benefits, including 5,578 people. Additionally, the Assembly included plans to ensure that the $100 yearly clothing allowance is paid to infants and toddlers, who are excluded from eligibility under current law. To improve parents’ readiness for employment and retention, the bill would exempt income from employment for six months when a parent starts a job, or until a household income exceeds 185 percent of the federal poverty line.

Lawmakers also included funding to raise rates to subsidized child care providers above the governor’s proposed amount, and caps parents’ copays at 7 percent of income. Additionally, they added language keeping the emergency rate being paid to providers during the pandemic for the next six months, even if the emergency order is allowed to expire.

The proposal includes full payment of the scheduled cost of living increase for nursing home caregiver rates and $600,000 for training CNAs.

The Assembly committed an additional $10 million above the governor’s recommendation to help the Department of Children Youth and Families address ongoing issues, including heavy caseloads and greater population needs resulting from the impacts of COVID. Included in the additional funds are authorization for 91 additional employees, 75 more than the 16 in the governor’s proposal. To attract a qualified candidate for the vacant DCYF director’s position, the budget includes authority to raise the salary, plus a commitment to a three-year contract. Health and Human Services Secretary Womazetta Jones told legislators last year that she’d been unable to find a qualified candidate who was willing to take the position for the salary offered.

The bill includes $15 million that would also leverage federal grants to provide enough body cameras for all patrol officers for every municipal police department statewide that does not already have them, and the State Police. That funding would deploy the cameras for a 5-year, state-supported implementation period, giving cities and towns the runway they need to budget for future maintenance. Yesterday the Assembly approved separate legislation (2021-H 64382021-S 0954) sponsored by Rep. José F. Batista (D-Dist. 12, Providence) and Sen. Jonathon Acosta (D-Dist. 16, Central Falls, Pawtucket) to establish policies on use of the cameras and distribution of the funds.

Besides fully funding state aid to education, the Assembly also included funding to help school districts that already have particularly high numbers of students going to charter schools and will lose more in the coming year, giving them a one-time boost of $500 per charter student. Lawmakers restored funding to the Paul V. Sherlock Center on Disabilities, which provides services to the state’s blind and visually-impaired students, as announced last month. The sole source contract with the Sherlock Center was slated to expire on June 30, and it was announced earlier this spring that, under a master pricing agreement, the Rhode Island Department of Education would solicit bids from qualified vendors, which sparked an outcry from students and families.

In higher education, the General Assembly added an additional $5.9 million beyond the governor’s proposal to help Rhode Island College address its financial difficulties.

The budget includes the $7.7 million needed to fund the Rhode Island Promise program, which provides two years of free tuition at CCRI to Rhode Islanders graduating high school. That program was made permanent by lawmakers earlier this year under legislation (2021-H 5224A2021-H 0097A) sponsored by Speaker Shekarchi and Senate President Dominick J. Ruggerio (D-Dist. 4, North Providence, Providence).

For business, legislators softened the impact of the governor’s proposal to tax businesses on their forgivable Payroll Protection Program loans provided by the federal government to keep them afloat during the pandemic. Lawmakers moved the exemption $100,000 higher than the governor proposed, so PPP loans would be taxable income only for businesses that turned a profit after receiving a forgivable PPP loan of $250,000 or higher. Under the new limit, 93 percent of the approximately 30,000 Rhode Island businesses that received a total of $2.6 billion in PPP loans will not be taxed on them, and businesses will have until March 31, 2022, to pay any such taxes they owe on loans received in 2020.

Lawmakers renewed the expiring historic properties tax credit for one additional year with $20 million in new funding.

The General Assembly included a one-time $10 million increase for the film and tax credit in 2022, making $30 million available for new productions next year.

Legislators added $40 million to fund Eleanor Slater Hospital in its current form, without closing any of its buildings. Lawmakers declined to include any of the proposal to reorganize ESH, which includes the Zambarano campus in Burrillville as well as the campus in Cranston.

The Assembly included the governor’s recently revised proposal to replace the North Kingstown and Richmond State Police barracks with a single new $28.1 million barracks to be built in East Greenwich. The revised proposal would no longer require voter approval due to a different funding mechanism. Lawmakers also concurred with the governor’s revised request to for $2 million over two years to renovate the Portsmouth State Police barracks.

The bill pays back all of the $120 million borrowed from the state’s “rainy day” fund at the early part of the pandemic in 2020. Legislators included the entire amount in 2021, instead of spreading it over three years, as the governor proposed.

Although legislators declined to include funding for a proposal recently offered by the administration to use $82 million in federal coronavirus aid to build a new state laboratory on a parcel of the state-owned former Route 195 land, legislative leaders have indicated their willingness to move forward with the proposal when the state receives more guidance on how its federal American Rescue Plan funding can be used.

The budget did not include any proposal to legalize, regulate and tax marijuana. The Senate passed separate legislation to legalize, tax and regulate cannabis and House leaders intend to continue working on legislation concerning cannabis regulation.

Also not included is a proposed tax on sweetened beverages, nor the creation of a new tax bracket on the highest earners, neither of which were contained in the governor’s budget proposal either.

Federal funds allotted to Rhode Island account for the overwhelming majority of the $1.9 billion increase over the governor’s original proposal.

 

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For an electronic version of this and all press releases published by the Legislative Press and Public Information Bureau, please visit our website at www.rilegislature.gov/pressrelease.

 

  

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