Rhode Island

Rhode Island

Budget Cycle
Annual 
 

Governor Submits Budget
January (3rd Thursday)

Fiscal Year Begins
July 1 

Governor Signs Budget 
June

Budget Links

FY2026 (proposed)
FY2025 (enacted)
FY2024 (enacted)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)

Proposed Budget - Fiscal Year 2026

On January 16, Rhode Island Governor Dan McKee submitted a budget recommendation for fiscal 2026. The budget calls for all funds spending of $14.22 billion in fiscal 2026, including general fund spending of $5.74 billion. This represents an all funds spending increase of 1.8 percent and a general fund spending increase of 2.6 percent compared to enacted fiscal 2025 levels. Federal fund expenditures for fiscal 2026 are projected at $5.09 billion, a 0.5 percent increase from enacted fiscal 2025. The governor’s budget is based on a general fund revenue estimate of $5.73 billion in fiscal 2026, reflecting 3.0 percent growth over the revised fiscal 2025 estimate. The fiscal 2026 estimate includes $267 million in recommended revenue actions. After a $178 million transfer to the state’s rainy day fund, the recommended budget projects a general fund ending balance of $0.8 million and a balance in the state’s rainy day fund of $296 million (about 5 percent of general fund spending, per the cap). The governor also recommends revisions to the fiscal 2025 enacted budget that would increase spending from all funds by $970 million, mostly driven by a $593 million increase in federal fund expenditures.

Proposed Budget Highlights 

The governor’s budget proposal invests in key priorities including workforce development, education, and health wellness, with a focus on improving education outcomes, raising incomes, and making residents healthier – the three pillars of the Rhode Island 2030 plan. The governor’s recommendation closes a projected deficit without raising broad-based taxes or cutting core services, instead creating savings through operational efficiencies, strategic cost-cutting efforts, and targeted new revenue streams. Highlights of the budget include:

Education and Workforce

  • Increases funding for K-12 education aid, including raising per-pupil funding levels
  • Provides funds for Learn365RI municipal grants to support high-quality, out-of-school programming
  • Launches Ready to Build, a pre-apprenticeship pathway to building trades
  • Build new Culinary and Hospitality Hub at a community college
  • Invests in the creation of 1,000 new work-based learning opportunities
  • Allocates funding for dual and concurrent enrollment programs
  • Funds a 4 percent increase for public higher education institutions, including funding for services related to career readiness, placement and internships
  • Funds two positions in the Office of Postsecondary Commissioner to form a federated integrated data system across state agencies to evaluate programs

Health and Wellness

  • Recommends a review of primary care provider rates by the Office of the Health Insurance Commissioner
  • Provides for loan repayment assistance for primary care providers and pediatricians
  • Increases funding for senior support services
  • Bans assault weapons and creates a sales tax exemption for gun safety goods
  • Increases the per-pack cigarette tax by 50 cents

Government Efficiencies

  • Recommends purchasing a large, commercial building to co-locate multiple state agencies and achieve long-term savings
  • Closes a minimum security correctional facility and creates a new unit within the medium security facility instead
  • Reduces agency contractor expenses, eliminates telephone landlines, and pursues other cost-cutting measures
  • Adds four new positions in Medicaid to identify provider fraud

Infrastructure 

  • Directs more funds to RhodeRestore to provide cities and towns with reliable funding to defray the costs of transportation projects and makes the program permanent
  • Creates new, two-year registration fees for battery electric vehicles and plug-in hybrid vehicles to help offset declining gas tax revenue

Addressing Homelessness

  • Provides funding from multiple sources for homelessness initiatives, including a new 5 percent hotel tax on whole-home short-term rentals (previously excluded) and an increase to the real estate conveyance tax for certain properties.