Rhode Island

Rhode Island

Budget Cycle
Annual 
 

Governor Submits Budget
January (3rd Thursday)

Fiscal Year Begins
July 1 

Governor Signs Budget 
June

Budget Links

FY2024 (enacted)
FY2024 (proposed)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)
FY2020 (enacted)
FY2019 (enacted)

Enacted Budget – Fiscal Year 2024

Rhode Island Governor Dan McKee signed the state’s fiscal 2024 budget into law on June 16. The budget provides for total spending from all funds of $14.0 billion, a 3 percent increase over fiscal 2023, and general fund spending of $5.4 billion, a 7.6 percent annual increase. The budget is based on total general fund revenue of $5.28 billion, a 1.5 percent increase over final fiscal 2023 revenues. The legislature adopted the governor’s proposal to create a new supplemental budget reserve account and make an initial transfer of $55 million into the reserve; going forward, half of all general revenue collected in excess of adopted revenue estimates for the year will be automatically deposited into the new reserve. When combined with the state’s rainy day fund balance in the Budget Stabilization and Cash Reserve of $282 million (constitutionally limited to 5.0 percent of annual revenues), total reserves are equivalent to 6.0 percent of general fund revenue. The RI Ready budget creates a Low Income Housing Tax Credit (LIHTC) program, expands shelter capacity and makes other investments to address the housing crisis, as well as takes steps to support the economy and local businesses, including providing a one-time rebate to consumers for utility gross receipt taxes and other tax relief measures. Additional tax changes in the budget include an increase to the earned income tax credit (EITC) and extending the Rebuild Rhode Island Tax Credit by one year to spur real estate development. The budget also invests in K-12 and higher education, including one-time funding for the Fresh Start Scholarship program; leverages state funds to create a matching municipal grant program to fund road improvements and to unlock federal money to improve state transportation and water infrastructure; and provides funding to climate and energy efficiency initiatives.


Proposed Budget - Fiscal Year 2024

On January 19, Rhode Island Governor Dan McKee submitted a budget recommendation for fiscal 2024. The budget calls for all funds spending of $13.75 billion in fiscal 2024, including general fund spending of $5.30 billion and federal fund spending of $5.53 billion. This represents an all funds spending increase of 1.1 percent, a general fund spending increase of 5.2 percent, and a federal fund spending decrease of 3.2 percent compared to enacted fiscal 2023 levels. The governor’s budget is based on a general fund revenue estimate of $5.28 billion in fiscal 2024, including recommended revenue policy changes, reflecting 1.2 percent growth over the fiscal 2023 estimate. The recommended budget projects a general fund ending balance of $8.8 million and a balance in the state’s rainy day fund of $277 million (about 5 percent of general fund spending, per the cap). The governor also recommends revisions to the fiscal 2023 enacted budget that would increase spending from all funds by $536 million, including $224 million in general fund spending.

Proposed Budget Highlights 

The governor’s “RI Ready” budget for fiscal 2024 prioritizes fiscal responsibility and tax relief, as well as investments in education, economic development, housing, healthcare, and climate. The budget proposal aims to make further progress toward the state’s goals outlined in RI 2030, the state’s master plan, in part by using fiscal 2023 projected surplus funds. The governor also proposes additional investments using American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF). Key budget proposals to support these priorities include:

Fiscal Responsibility

  • $55 million in surplus funds to create an additional reserve fund as a supplement to the rainy day fund (which is currently capped at 5 percent of general revenue)
  • $60 million in surplus funds transferred to Rhode Island Capital Plan Fund for various projects
  • $15 million in surplus funds to pre-fund increase in Rebuild Rhode Island tax credit program cap
  • $35 million in surplus funds to pay off various debt

Tax Relief 

  • Reduce sales tax rate from 7 percent to 6.85 percent ($25.8 million general revenue impact)
  • Forgo scheduled 3-cent increase in gasoline tax ($24.6 million impact over two years)
  • Reduce corporate minimum tax by $25 ($1 million impact in fiscal 2024)
  • One-time refund of gross receipts tax on utilities for four months using surplus funds ($35.6 million one-time)
  • Eliminate litter tax paid by local businesses ($1 million)
  • Exempt trade-in value of trucks below a certain weight threshold ($3.7 million impact in fiscal 2024)
  • Deposit $4.4 million in Workers’ Compensation Fund to prevent employer rate increase

Education

  • $7 million to preserve 800 pre-K seats to offset an expiring federal grant and $1.3 million to prepare new classrooms
  • $57.8 million in additional K-12 funding and modifies the school funding formula to help school districts navigate enrollment shifts and prevent state funding declines, as well as additional funds for multilingual learner funding, special education, economically disadvantaged students, and homeless students
  • $14 million (6.8 percent) increase in aid to higher education institutions
  • $2.5 million one-time funds for the Fresh Start Scholarship program
  • $8 million in SLFRF to strengthen the RI Reconnect initiative

Economic Development

  • $2.6 million added to the Small Business Assistance Program to help businesses access capital
  • $2.4 million in funding for Wavemaker Fellowship student loan forgiveness program and expands eligibility to include teachers
  • $20 million added to First Wave Closing Fund to help attract and retain businesses
  • $45 million in SLFRF for a program to foster growth in the life sciences sector
  • $25 million in SLFRF to continue offshore wind growth as part of the South Quay Marine Terminal Project
  • $5 million in SLFRF to help small businesses with ventilation improvements

Housing and Healthcare

  • Proposes additional FTEs to support newly created Department of Housing
  • $7.5 million for care reimbursement at new community behavioral health clinics
  • $30 million in SLFRF to expand homeless shelter capacity
  • $1.3 million in additional SLFRF to help people retain health coverage once they are transitioned off Medicaid at the end of the public health emergency

Climate and Natural Resources

  • $31.5 million over seven years to the Executive Climate Change Coordinating Council to implement climate efforts
  • $28.5 million in surplus funds transferred to Rhode Island Infrastructure Bank to cover state match for Clean/Drinking Water State Revolving Funds through fiscal 2028

Transportation

  • $87.8 million in surplus funds to cover state match requirement for transportation projects under the Infrastructure Investment and Jobs Act (IIJA)
  • $70 million in surplus funds for lost revenue from commercial truck tolling program, which is still pending
  • $20 million fund created, using SLFRF, for local governments to complete road projects