Enacted Budget – Fiscal Year 2027
Rhode Island Governor Dan McKee signed the state’s fiscal 2027 budget into law on June 12. The budget provides for total spending from all funds of $15.24 billion, a 1.1 percent increase compared to fiscal 2026 final expenditures. The budget includes general fund spending of $6.08 billion, a 4.1 percent annual increase, and federal aid spending of $5.73 billion, a 5.1 percent increase compared to fiscal 2026 final levels. The budget is based on general fund revenue of $6.05 billion, reflecting a 1.2 percent increase compared to fiscal 2026 final general revenues. The budget includes a beginning balance, or free surplus, of $222.7 million and projects an ending balance (or free surplus) of $1.3 million. The balance in the state’s rainy day fund, the Budget Stabilization and Cash Reserve Account, is projected to end fiscal 2027 at $313 million, representing 5.2 percent of general fund revenue.
The budget advances several gubernatorial priorities, including affordability, health care access, education, infrastructure, and protections for vulnerable residents affected by federal policy changes. Tax policy changes include creating the state’s first refundable child tax credit, expanding the state’s income tax exemption on Social Security for early retirees, phasing in a new income tax surcharge on taxable income above $1 million, and decoupling from certain federal corporate tax deductions. The budget also sunsets a recently established primary care assessment to align with federal guidance on provider taxes. Additionally, the budget includes several energy affordability measures and invests funds to backfill expired enhanced Affordable Care Act marketplace subsidies. Additional health care provisions include new authority for the Office of the Health Insurance Commissioner to set enforceable annual health care cost-growth targets, increased prescription drug pricing transparency requirements for pharmacy benefit managers, and elimination of the state health insurance fee. The budget responds to federal safety net changes by including funds to account for the increased state administrative cost share for SNAP and for technology, training, and program integrity activities. It provides additional support for hospitals through Disproportionate Share Hospital payments to offset losses related to uncompensated care, increases recommended rates for social and human services providers, triples funding for the Rhode Island Community Food Bank, and provides support for preventive health services. For education, the budget increases high-cost special education funding, provides funds for the Learn365RI out-of-school learning program, extends the Hope Scholarship at Rhode Island College for three years, and adds funding for the state’s public higher education institutions. The budget also includes a historic general obligation bond package for the November ballot to support higher education facilities, affordable housing and homeownership, economic development, climate resilience, and cultural economy projects. Additional investments include funding for Rhode Restore local road repairs, expanded childcare assistance eligibility and childcare provider reimbursement rate increases, and support for a proposed medical school.