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State of Rhode Island General Assembly
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2023 budget bill signed into law
The $13.6 billion state budget for the 2023 fiscal year approved by the General Assembly has been signed into law, providing targeted taxpayer relief and directing spending of the remainder of the state’s American Rescue Act Plan (ARPA) funds on strengthening existing commitments.
“This budget is a product of true collaboration between the House, the Senate and the Administration which will continue to drive Rhode Island’s recovery and assist the taxpayers and residents with the challenges we still currently face. It was designed to help the good of the whole with a responsible focus on protecting the taxpayers from possible future deficits while also supporting the vital services our residents rely upon and need. I commend all who had a hand in this important piece of legislation and I look forward to seeing the investments made within the budget benefit all Rhode Islanders into the future," said Finance Committee Chairman Abney (D-Dist. 73, Newport, Middletown).
Said Senate Finance Committee Chairman Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln).“Our priorities have been to ensure a budget that takes care of Rhode Islanders today and into the future. The immediate benefits of this budget include targeted economic relief like the child tax credit, the early elimination of the automobile excise tax, property tax relief for seniors and the disabled, income tax breaks for veterans and retirees. In the long term, we are setting the stage for a robust blue economy in our state, changing the trajectory for health care through reimbursement rates that will better sustain our workforce and rebalancing the health care system, and investing in our school infrastructure, higher education facilities and our information technology capital. This is a budget that responsibly sustains our state and points us toward a vibrant future.”
“Rhode Island has been making a very strong economic comeback since the worst days of the pandemic, and with a boost from the federal resources we’ve received over the last couple of years, we’re going to be able to help Rhode Islanders from all walks of life through this budget. A budget is really much more than hundreds of pages of revenue and expenditures; it’s how we act on our priorities and values. With this budget, we’re saying we hear Rhode Islanders when they say they can’t find housing they can afford and they are feeling the pinch of inflation. We know that for a healthy, strong community, we need more funding for health care, mental health and social services. We understand that good education is the key to a strong future, and that kids need safe, healthy places to learn. I’m proud of what we’re able to do today with our resources, and I especially want to thank the House Finance Committee, led by Chairman Marvin Abney, for the months of work they put into crafting this plan, along with our colleagues in the Senate and Governor McKee for working in partnership with us on the ideas included in it. This is a responsible budget that will have positive impacts for all Rhode Islanders,” said House Speaker K. Joseph Shekarchi (D-Dist. 23, Warwick).
“This budget is the product of months of collaboration, and I’m proud that it includes many of the Senate’s top priorities. It provides immediate relief for Rhode Islanders who are coping with the burden of inflation, and it makes significant long-term investments in our state’s future,” said Senate President Dominick J. Ruggerio (D-Dist. 4, North Providence, Providence). “We have eliminated the car tax a year ahead of schedule, and the vast majority of Rhode Islanders will never receive another car tax bill. And we have wisely used our one-time revenue windfall, both federal dollars and state surplus, to make one-time investments that will pay off for decades.”
“Rhode Island has the momentum – we have the lowest unemployment rate in over 30 years and our economic recovery is ranked second in the nation by Moody’s. This budget gives us the tools to ensure our momentum continues,” said Gov. Dan McKee. “I am proud to sign a budget that includes our historic investment to finally address the housing crisis while delivering much-needed tax relief for families and local businesses without a single tax increase. This budget represents a true collaborative effort that will help Rhode Island embrace the once-in-a-generation opportunity before us. I thank the Speaker and Senate President for their partnership in delivering real results for hardworking Rhode Islanders though this budget.”
“This year’s budget makes meaningful investments that will strengthen our economic rebound while investing in critical areas that have long gone neglected,” said Lt. Gov. Sabina Matos. “The historic $250 million housing investment, the expansion of Medicaid coverage for all children and women postpartum through 12 months, and the elimination of taxes on military pensions are items I’m proud I strongly advocated for. I applaud Governor McKee, the Speaker, and Senate President for finalizing a budget that will benefit all Rhode Islanders.”
The budget bill (
), which Governor McKee signed this afternoon, positions the state to withstand another downturn should one occur, and focuses the one-time infusion of ARPA funds for one-time investments and addressing longstanding problems, rather than recurring costs.
The plan accelerates the six-year phase-out of Rhode Island’s motor vehicle excise tax, which was previously the highest in the nation, eliminating what would have been the final year of the tax next year and providing $64 million in relief. That means almost all Rhode Islanders will not see another automobile excise bill. (East Providence, which operates on a different fiscal year than most municipalities, is one year behind other cities and towns on the phase-out.)
For families with children, legislators added a one-time child tax credit of $250 per child, for up to three children per family. The credit will be automatically sent in the fall by the Division of Taxation to those who filed taxes indicating they had children under 18 in the 2021 calendar year and made less than $100,000 for single filers, or $200,000 for joint filers. The credit is expected to go to about 190,000 filers, providing $43.8 million in relief.
Drivers will also benefit from the elimination of an $8 fee that was originally slated to be charged upon registration renewal to every car owner over the next two years for the cost of replacing license plates with new ones. The amended budget will instead provide the plates for free.
Lawmakers added $4 million to increase the “circuit breaker” tax credit available to qualifying elderly and disabled residents, raising the maximum credit from about $400 to $600 beginning in tax year 2022 and indexing that amount to inflation. The bill also makes the credit available to more Rhode Islanders by increasing the income threshold for eligibility from $30,000 to $35,000.
For veterans, legislators supported the governor’s proposal to eliminate income taxes on military pensions, but eliminated it entirely in the 2023 tax year instead of phasing it over five years, as the governor had proposed.
For other retirees, the Assembly raised from $15,000 to $20,000 the amount of annual pension income that is exempt from state taxation.
To address a major concern for business, legislators added a provision to dedicate $100 million to the unemployment trust fund to reduce businesses’ unemployment tax rates for 2023. The trust fund took a significant hit during the pandemic from people being out of work as well as from fraud, and adding to the fund will reduce what must be paid into it by employers.
The General Assembly also concurred with the governor’s plan to allocate $61.8 million from general revenues to the state pension system to pay off the liability remaining from when the state’s contributions to its employees’ pension fund were deferred in the fiscal crisis of 1991 and 1992. The annual cost of this component of the unfunded pension liability would have been $6 million from general revenues for the next 12 years.
Continuing legislative leaders’ efforts to address housing, legislators kept in the $250 million total from the American Rescue Plan Act federal funds proposed by the governor for affordable housing and addressing homelessness, although they made some changes to funding levels and initiatives. Among the initiatives included in that funding is $30 million for down payment assistance for homebuyers and $10 million toward housing for the homeless to be developed by the homeless services agency Crossroads Rhode Island.
The plan fully funds the state’s education formula, increasing the total by $17 million over the current level, and includes a commitment to nearly double the number of voluntary, free high-quality pre-kindergarten seats to 5,000 statewide over five years.
The budget includes three bond questions on November’s ballot. The first seeks voter approval for another school construction bond for $250 million, and allocates an additional $50 million from the capital funds toward school construction. More than three-quarters of voters approved a similar school construction bond in 2018.
A second ballot question will seek voter approval for $100 million in borrowing for new construction and repairs at the University of Rhode Island Narragansett Bay campus, doubling the amount proposed by the governor. While the governor initially included $12 million for construction at the Community College of Rhode Island, legislators funded that project from the capital fund instead of borrowing.
A third ballot question will be a “green bond,” asking voters to approve $50 million — $38 million for conservation and recreation, and another $12 million for the education center at Roger Williams Park Zoo.
In addition to seeking a study by the Office of the Health Insurance Commissioner on appropriate reimbursement rate levels into the future, the plan addresses immediate needs by including numerous increases to providers of health care and home and community services for children, elderly, developmentally disabled individuals and low-income Rhode Islanders, including pediatric care, labor and delivery care, hospitals, adult dental services, children’s therapeutic and respite services, Early Intervention, children’s behavioral health care, home health services and personal care aides.
The plan includes $30 million from ARPA to support community behavioral health care clinics to help them serve Rhode Island’s surging mental and behavioral health needs, and permanently establishes a mental health treatment court, paid for through general revenues.
In addition to continuing ARPA support first authorized in January for a total of $42 million, legislators approved provisions to increase rates the state pays for child care services and expand eligibility for those services. Those earning up to 200 percent of the federal poverty level would quality, and participants could earn up to 300 percent before losing eligibility.
Lawmakers allocated $190 million in ARPA funds for future COVID response costs.
Addressing concerns raised by lawmakers and advocates about the lack of any in-state psychiatric facility for girls, the plan includes $12 million to expand existing in-state capacity at private facilities and initial design of a new facility. Legislators committed $45 million over three years from Capital Plan funds for construction of that facility.
Lawmakers kept the governor’s plan to invest $168 million in upgrades to Eleanor Slater Hospital, including $108 million to construct a new long-term acute care hospital at the Zambarano campus in Burrillville.
For Rhode Island Works recipients, the plan uses federal block grant funds to increase benefits by raising the monthly income disregards, raising the resource limit of participants from $1,000 to $5,000 per family, increasing the lifetime limit from 48 months to 60 months and allowing those who have completed their first year at Community College of Rhode Island as part of their work plan to complete the second year as well.
Legislators included a year-long pilot program to provide free service on the Rhode Island Public Transit Authority’s busiest route, the R line that runs from Pawtucket to Cranston.
The budget doubles to $20 million an initiative to use ARPA funds on a grant program for nonprofit organizations, giving the Rhode Island Foundation responsibility for distribution.
Legislators included a pilot program that would grant SNAP recipients a 50-cent credit to their EBT cards for every dollar used to purchase fruits and vegetables, subject to limits. $1.5 million would be appropriated for administrative and technology costs and $10 million would be appropriated to cover the cost of the benefits.
The budget includes $1 million to study the feasibility of erecting suicide barriers on the three bridges that connect Aquidneck Island and Jamestown to the Rhode Island mainland.
It includes $5 million over two years from capital plan funds to enhance the planned Pawtucket/Central Falls bus hub, adjacent to the new commuter rail station, with passenger restrooms, waiting areas and a customer service area.
Broadband infrastructure planning work, including a needs assessment, statewide mapping of broadband access and cost, and one new broadband director position at the Commerce Corporation was also included, along with the creation of a broadband advisory council.
The plan expands the Wavemaker fellowship program, currently used to strengthen the workforce in STEM fields, to health and mental health professionals.
It includes a $30 million investment from ARPA funds over three years to support the Real Jobs RI program, which helps place employees in job openings, advance the skills of employed people and create a talent pipeline for businesses.
It also includes $70 million in ARPA funds for blue-economy investments, including ports and shipping defense, marine trade, ocean-based renewables, aquaculture and tourism. This investment is in addition to $60 million from ARPA to support infrastructure at the Port of Davisville and $46 million from capital plan funds for rehabilitation of the Port of Galilee.
Additionally, $30 million in ARPA funds is dedicated for new bioscience investments including a wet lab facility for both academic and private sector research. Lack of wet lab space for life science companies has been an obstacle to the state’s economic development efforts in that sector.
Another $35 million from ARPA funds is dedicated to early-phase development of the South Quay Marine Terminal on the East Providence waterfront, which has been proposed as a staging area for the assembly of wind turbines.
The budget includes $25 million from ARPA for grants to help low- and moderate-income households and community organizations to purchase and install electric heat pump systems, which are energy efficient and can replace oil or gas-powered heating, reducing emissions.
Legislators approved a cottage food program to allow individuals to sell food items such as baked goods prepared from their own homes, with certain health and safety requirements and permits.
The budget provides $28 million to recapitalize the Historic Tax Credit Fund to reach more projects in an existing queue.
For more information, contact:
Meredyth R. Whitty
State House Room 20
Providence, RI 02903
Lt. Governor's Office
Secretary of State
Link to Public Records Request
Informational Briefing on Pensions