by Nancy Lavin, Rhode Island Current
June 5, 2026
A record $15.2 billion fiscal 2027 budget breezed through the Rhode Island House of Representatives in near record time Friday, with the 65-10 vote finalized with an hour to spare before sunset.
The approved budget is almost identical to the version given preliminary vetting by the House Committee on Finance one week ago, featuring a phased-in millionaire’s tax, a state inspector general’s office, and additional funds for healthcare, families with children, and the state public transit agency.
The $15.2 billion bottom line for fiscal 2027 marks the highest spending in state history — roughly $300 million more than what Gov. Dan McKee proposed in January, and $900 million above the current fiscal year budget approved one year ago.
“Sustainability was at the core of what we’re looking at to make sure we’re investing not just today, but for our families for the future,” House Speaker Christopher Blazejewski, a Providence Democrat, told reporters after the vote on Friday.
All 10 Republican lawmakers voted against the budget, blasting the unsustainable growth in state spending and the controversial millionaire’s tax, which dominated debate throughout the legislative session.
Friday afternoon proved no exception, with lawmakers reprising familiar talking points about business interests and household affordability during an hourlong back-and-forth periodically marked by raised voices.
The phased-in millionaire’s tax seeks to strike a balance, stretching out the 3% tax increase income over $1 million over three years, rather than all at once as McKee’s budget proposal contemplated. The tax hike supplies another $22 million in tax revenue in the upcoming fiscal year based on a 6.99% tax on income over $1 million — the highest tax bracket now pays 5.99% — starting Jan. 1. Revenue from the millionaire’s tax is expected to rise to $142 million by the end of the decade when the incremental tax hike reaches the peak rate of 8.99%.
Backers of the tax increase, including Blazejewski, insisted the extra revenue would be needed to offset anticipated federal funding cuts tied to the One Big Beautiful Bill Act.
“This is us ensuring we will still be able to provide the bare minimum for individuals who need it the most in our state,” said Rep. Teresa Tanzi, a South Kingstown Democrat, listing off examples of the affordability crisis gripping the nation and state.
“People aren’t even going to Applebee’s anymore, they’re going to McDonald’s,” she said. “I urge my colleagues to support the 80%. Not the 1%, not the millionaires.”Rep. Teresa Tanzi speaks on the House floor during consideration of the fiscal year 2027 state budget on June 5, 2026. (Photo by Alexander Castro/Rhode Island Current)
House Minority Leader Mike Chippendale warned that the Ocean State will lose its top earners and employers, costing the state’s economy in the long term. In Massachusetts, which began taxing income over $1 million in 2024, more people are leaving the state according to federal tax filings, a trend opponents link to the tax on top earners though the correlation is not explicit.
“We are making our territory infertile for businesses,” Chippendale, a Foster Republican, said.
Quotation
People aren’t even going to Applebee’s anymore, they’re going to McDonald’s. I urge my colleagues to support the 80%. Not the 1%, not the millionaires.
– Rep. Teresa Tanzi, a South Kingstown Democrat
Losing a major employer like CVS Health would make its host city, Woonsocket, “look like Monaco in Detroit,” independent Rep. Jon Brien said, referencing the Michigan used car dealer.
The budget article including the tax increase prevailed by a 54-17 vote, with the chamber Republicans, Brien, and seven Democrats opposed. Three representatives did not vote.
Inspector general, at last
Far less controversial was the newly minted speaker’s pitch for a state inspector general, cemented with a $1.3 million earmark in the state budget.
The funding, unanimously backed by lawmakers Friday, pays for a 12-person independent watchdog agency to improve government efficiency and investigate waste, fraud and abuse.
“I’m frankly exuberant that it’s in this budget,” said Chippendale in what he admitted was a rare note of praise on the Democrat-crafted spending plan.
Blazejewski’s decision not to subject the state legislature or judiciary to the inspector general’s purview, citing separation of powers, created initial reservations among Republicans and a handful of Democrats.
“The public is surmising and I can understand why they are, that we have something really sinister going on here, we’re trying to hide what we’re doing,” Rep. Charlene Lima, a Cranston Democrat said.
She acknowledged nothing devious was behind the legislation, but suggested that including the legislature and judiciary under the inspector general’s purview would put people at ease. Lima favored letting the courts decide whether it was unconstitutional.
Quotation
We are making our territory infertile for businesses.
– House Minority Leader Mike Chippendale, a Foster Republican
The state auditor general, funded with $8.3 million in fiscal 2027, already serves as oversight for the legislative branch. Rep. George Nardone, a Coventry Republican, pitched a different workaround that would expand the auditor general’s power over the legislature, adding express subpoena and investigatory powers.
Both Lima and Nardone’s amendments failed, shot down by an overwhelming majority of chamber Democrats.Budget documents sit in a box on the floor of the Rhode Island House of Representatives on Friday, June 5, 2026. (Photo by Alexander Castro/Rhode Island Current)
Help for hospitals, RIPTA
Anticipated fallout from new, federal restrictions on Medicaid and the Supplemental Nutrition Assistance Program (SNAP) spurred lawmakers to focus the state budget on programs that could cushion the blow for service providers and recipients.
“This plan recognizes where we are and meets that moment, with an eye towards tomorrow,” Rep. Marvin Abney, a Newport Democrat and chair of the House Committee on Finance, said of the spending plan overall. “This budget does not solve all problems. But once again, it addresses the most pressing needs of the day.”
The budget includes the full $116 million cost to increase Medicaid reimbursement rates for behavioral and home health care providers, as recommended by the Office of the Health Insurance Commissioner. There’s nearly $39 million more for hospitals and healthcare providers to offset the costs associated with an expected rise in uncompensated care, and $22 million to help offset higher premiums for people who purchase health insurance through the state exchange.
A new, refundable child tax credit will help middle and low-income families with an average of $330 per child per year, while an extra $11.5 million extends the runway for a state pilot program that incentivizes SNAP recipients to spend their food assistance on fruits and vegetables. The Eat Well, Be Well pilot would have otherwise run out of money at the end of the month.
Other spending allotments are more targeted: $4.6 million to close the deficit at the Department of Children, Youth and Families, preventing the staffing cuts that spurred protests by agency employees; $1.6 million for the Newport Hospital birthing center, which remains under threat of closure without more money from donors, according to operator Brown University Health; $3 million for the Rhode Island Community Food Bank, and returning the cash-strapped Rhode Island Public Transit Authority (RIPTA) into the black after years of deficits.
Lawmakers added an extra $13.4 million for the state public transit agency, compared with McKee’s proposal, relying on revenue from a 2-cent increase in the gas tax enacted last year, and extra money from a separate, state highway account maintained by the Department of Transportation. Newport’s cruise ship landing and docking fees will remain at current levels, despite McKee’s proposal to increase them as a way to fund RIPTA.Rep. George Nardone, a Coventry Republican, speaks as the House takes up the fiscal year 2027 state budget on Friday, June 5, 2026. (Photo by Alexander Castro/Rhode Island Current)
Little love for RIDOT
The embattled state transportation department, which has been widely blamed for a lack of oversight that led to the sudden closure and subsequent rebuild of the westbound Washington Bridge, is less fortunate. The agency loses funding for 35 of its 60 vacant positions, while subject to a state audit for efficiency and performance, due in March. And, the transportation director loses the chair position on RIPTA’s board of directors, although they continue to have a seat on the appointed panel.
Also coming out with less than they hoped for: high-income retirees who pay state income taxes on their Social Security benefits. McKee’s initial budget proposed a three-year phaseout of the tax, which affects retirees with income above $107,000, or $133,750 for joint filers. Lawmakers preserved the first year of the plan, which eliminates the age minimum required to bypass taxes, but held the line on the policy and rate.
McKee’s contested energy affordability plan was also largely gutted by lawmakers — despite a last-ditch effort led by Republicans to reinstate a piece of it — in favor of preserving the existing renewable energy and energy efficiency mandates meant to tackle climate change and rising energy costs.
“If it were as simple as changing the date, we would have done that,” said Rep. Lauren Carson, a Newport Democrat, referring to the stricken proposal to push out the state deadline to offset 100% of its electricity needs through renewable sources or energy credits. “There are other variables out there that affect the cost of utilities. This is not one quick fix to get ratepayer bills down.”
But, legislators agreed with McKee’s proposal to let hydropower and nuclear energy count toward fulfilling the state’s renewable energy requirements, and to control costs for large-scale solar developments through a voluntary fixed-price program.
McKee’s attempt to empower the executive with a line-item veto through budget language was also stricken by lawmakers, as were proposed increases in cigar and cigarette taxes. But the governor’s signature afterschool education program, Learn365, got the $2 million he wanted. A $250,000 security request for World Cup events was also incorporated.
Charter schools still TBD
The spending plan does not address one of the biggest unsettled debates still hanging over Smith Hill: charter schools. The Rhode Island Senate approved legislation Thursday that would ban new charter schools for the next three academic years, which proponents say gives time to better understand how the nontraditional public schools affect resources and outcomes for students in standard public schools. But opponents, including some progressive lawmakers, say the legislation is a bandage that fails to address the deep-rooted problems in the state education system.
The spending plan devotes additional state aid to school districts with higher percentages of low-income students, as well as extra money for student transportation costs and career and technical education. It also returns the Central Falls School District to city control after more than three decades under state authority.
And, an amendment incorporated Friday sets aside more than $700,000 to train educators to work with students whose first language is not English.
However, lawmakers did not offer the extra $590 million in annual state education aid recommended in January by a Rhode Island Foundation-led panel charged with overhauling the opaque education funding formula. But they charged the Rhode Island Department of Education with submitting a report analyzing and comparing the Blue Ribbon Commission’s recommendations to the existing funding structure.
The budget also advances a $600 million, five-question series of bonds to voters in November, although allocations are slightly different than what McKee proposed in January, with extra money directed toward an integrated health sciences building at University of Rhode Island, and a $50 million career and technical secondary education program scrapped. There is more money for farm and forestland preservation in the “green bond,” while there is $40 million — $5 million less than what McKee proposed — for Secretary of State Gregg Amore’s requested state history center. The budget provides another $4.5 million from the state’s long-term capital projects budget for the dedicated history building. Sharon Reynolds Ferland, fiscal adviser to the Rhode Island House of Representatives, reviews documents during the floor session to approve the state’s fiscal year 2027 budget at the Rhode Island State House in Providence on June 5, 2026. (Photo by Alexander Castro/Rhode Island Current)
Etc.
- The long-awaited return of truck tolls is baked into the new spending plan, which assumes $20 million in revenue from the still-unspecified date when gantries reactivate.
- An extra $18 million will go back into the state rainy day fund, replenishing the amount lawmakers agreed to put up as a separate backstop for the sale of Roger Williams Medical Center and Our Lady of Fatima Hospital in February
- A $5 million earmark will pay for an initial year of planning for a new University of Rhode Island medical school
- A $600,000 allocation of state funds will pay for three employees, including a magistrate, to oversee a dedicated domestic violence court
- An extra $200,000 boost will expand the Rhode Island Promise Scholarship to let in-state high school graduates defer college enrollment by one semester while still qualifying for free tuition at the Community College of Rhode Island.
The chamber’s vote now sends the budget to the Rhode Island Senate, where the Committee on Finance is scheduled to take up the spending plan Monday night, with a floor vote on Tuesday.
Former House Speaker K. Joseph Shekarchi, a Warwick Democrat who stepped down from the leadership position but not his seat in May after applying for a seat on the state Supreme Court, missed most of the budget debate, arriving just in time to cast his vote in support of the final fiscal 2027 spending plan. Rhode Island House Minority Leader Michael Chippendale and Rep. Megan Cotter, an Exeter Democrat, confer on the House floor on June 5, 2026. (Photo by Alexander Castro/Rhode Island Current)Rep. Charlene Lima, a Cranston Democrat, speaks on the House floor on Friday, June 5, 2026. (Photo by Alexander Castro/Rhode Island Current)
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Rhode Island Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Rhode Island Current maintains editorial independence. Contact Editor Janine L. Weisman for questions: info@rhodeislandcurrent.com.
