Woonsocket Radio News Room

Governor McKee Files FY 2026 Budget

Budget closes $250 million deficit without any broad-based tax increases, makes crucial workforce and education investments, protects Rhode Island’s economic progress

PROVIDENCE, RI – Governor Dan McKee today submitted his FY 2026 budget to the General Assembly. The budget makes key investments to strengthen Rhode Island’s workforce, continue our momentum in education, and support the health and wellness of our state without raising any broad-based taxes. This is the fifth budget submitted by Governor McKee that does not include a single broad-based tax increase.

“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,” said Governor Dan McKee. “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.” 

Among the investments in the Governor’s budget proposal are: 

Investing in Education and Rhode Island’s Workforce

·     Providing $2.5 million for Learn365RI municipal grants million to support high-quality, out-of-school-time programming, with an emphasis on critical skill development. This investment complements a $5 million investment in the FY 2025 budget.

·     Increasing K-12 education aid by $43.4 million, including raising per-pupil funding to $13,322 – an increase of $705 from the enacted FY 2025 level. 

·     Launching Ready to Build, a signature, pre-apprenticeship pathway to the building trades at the Community College of Rhode Island with an investment of $800,000 in general revenue.

·     Developing a Culinary Hospitality Hub at the Community College of Rhode Island’s Newport Campus to train the next generation of culinary and hospitality workers.

·     Investing $6 million in general revenue and Jobs Development Funds to create 1,000 new work-based learning opportunities, allowing youth to gain work experience through programs such as Real Skills for Youth and the PrepareRI High School Internship.

·     Allocating $2.9 million for the dual and concurrent enrollment programs, supported by resources from the Rhode Island Student Loan Authority. This level of support would sufficiently meet demand and make it possible for high school students to take postsecondary courses at an institution of higher education or at their high school.

·     Providing an additional $10.6 million, or a 4 percent increase, across the University of Rhode Island, Rhode Island College, and the Community College of Rhode Island, of which $1.7 million supports services related to career readiness, career placement, and internships.

Upgrading Rhode Island’s Infrastructure

·     Investing $6.5 million more in RhodeRestore, the Governor’s signature program, with the intent of making it a permanent program that provides cities and towns with a reliable funding source to defray the costs of transportation infrastructure projects. The budget proposal also includes a mechanism to make it easier for municipalities to unlock the new funding, which will be available through the Rhode Island Infrastructure Bank.

·     Including new, two-year registration fees for battery electric vehicles ($300) and plug-in hybrid vehicles ($150) to maintain transportation infrastructure and support the RhodeRestore initiative. This helps ensure sufficient funding as gas tax revenue is projected to decline amid the rising adoption of electric and plug-in hybrid vehicles.

Promoting Health and Wellness Across Rhode Island

·     Proposing an assault weapon ban to prohibit the future possession, purchase, sale, control, and manufacture of assault weapons. Additionally, the budget includes a sales tax exemption for gun safety goods, such as lock boxes and safes.

·     Recommending that primary care provider rates are taken up by the Office of the Health Insurance Commissioner in its next review due in September 2027, an important step to creating a competitive primary care job market in Rhode Island.

·     Investing $200,000 in general revenue, coupled with $200,000 in matching funds, for the Health Professional Loan Repayment Program. This specific investment offers loan repayment assistance for primary care providers and pediatricians who commit to practicing in Rhode Island’s federally designated health professional shortage areas for two years.

·     Increasing funding for senior support services from $1.4 million to $1.6 million. This increased level of support is the equivalent of $8.19 per senior and represents continued progress toward the Governor’s goal of providing $10 per senior in senior support services. The funds are intended to be delivered as a formula allocation.

Creating Government Efficiencies

·     Recommending the purchase of a large, commercial building in East Providence that offers a rare opportunity to co-locate multiple state agencies and achieve long-term savings.

·     Closing the Minimum Security Facility and creating a new, separate, and secure unit within the Medium Security Facility, which offers more programming and job opportunities.

·     Pursuing strategic cost-cutting measures across state agencies to ensure state government is living within its means. Measures include significantly reducing agency contractor expenses and eliminating telephone landlines for state employees who no longer use the devices.

·     Allowing for several provisions to prevent waste, fraud, and abuse in state-administered programs, including four, new positions in Medicaid to identify Medicaid provider fraud. The net savings from this effort are projected to be $2.3 million in FY 2026.

Creating a Sustainable Funding Stream to Address Homelessness

·     Including $15.7 million from multiple funding sources for homelessness initiatives, including two, new, sustainable funding sources.

·     Applying the 5 percent hotel tax to whole-home short-term rentals to close a loophole. The hotel tax applies to hotels, motels, and partial home short-term rentals (i.e., renting a home in a house) – but not whole-home short-term rentals. The proposal is projected to generate $2.1 million over the last six months of Fiscal Year 2026 and $4.7 million in FY 2027.

·     Increasing the real estate conveyance tax for properties above $800,000 from 0.92 percent to 1.25 percent. This change is projected to generate an additional $2.3 million in Fiscal Year 2026 and $3.4 million in FY 2027.

View Governor McKee’s full budget submission here.