Gov. Dan McKee outlined an ambitious affordability agenda during his 2026 State of the State address Tuesday evening, proposing to eliminate the state tax on Social Security, create Rhode Island’s first permanent child tax credit and roll back last year’s gas tax increase.
The governor’s “Affordability for All” plan would keep $215 million in Rhode Islanders’ pockets in the first full year and $1.4 billion over five years, according to his office.
“Tonight, I am excited to propose Rhode Island’s first Affordability for All agenda,” McKee told lawmakers gathered in the House of Representatives Chamber at the Rhode Island State House.
McKee opened his address by acknowledging the tragedy at Brown University one month ago that claimed the lives of two students.
“As a parent, I think about the families who received the worst call imaginable,” McKee said. “Our hearts remain with them and the entire Brown community.”
Key affordability proposals
The governor’s plan includes eliminating the state tax on Social Security benefits, noting Rhode Island is one of only eight states that still taxes the benefit.
“AARP Rhode Island is here in the gallery tonight. They’ve been fighting this fight for many years,” McKee said. “I’m proud to announce that my budget will put forward a plan to eliminate the state tax on Social Security once and for all.”
For families with children, McKee proposed expanding the dependent deduction to create a permanent child tax credit of $325 per child.
The plan also calls for rolling back last year’s gas tax increase, which pushed Rhode Island to the 10th highest gas tax in the country. The rollback would deliver nearly $9 million in relief annually, according to the governor.
On energy costs, McKee said his budget would deliver more than $1 billion in relief over five years by reforming state programs and taxes that make up 25% of residential energy bills. Rhode Island currently has the fourth-highest residential electricity rates in the nation.
The governor also proposed setting enforceable caps on healthcare costs for private insurers, with penalties for companies that don’t comply.
$600 million in bond proposals
McKee called for $600 million in bond proposals to “Keep Rhode Island Building,” including:
- $115 million for economic development, including maritime and defense infrastructure at Quonset and a State History Center on Capitol Hill
- $215 million for higher education facilities at URI, Rhode Island College and CCRI
- $50 million for career and technical education classrooms
- $120 million for housing, with $25 million dedicated to increasing homeownership
Secretary of State Gregg Amore praised McKee’s renewed support for the State History Center.
“We are one of the only states in the country without a permanent, purpose-built facility to store and share our historic artifacts,” Amore said in a statement. “Let 2026 be the year that we mark 250 years of our nation and approve a project that will tell Rhode Island’s story for decades to come.”
Pushback against Trump administration
McKee repeatedly criticized the Trump administration throughout his address, blaming federal tariff policies for raising costs on Rhode Island families.
“In the first eight months of the Trump presidency, the average household paid an additional $700 due to higher costs,” McKee said. “As Governor, I’m not going to stand by and let President Trump price Rhode Islanders out of their way of life.”
The governor highlighted his administration’s response to the recent SNAP benefits crisis, when federal officials temporarily held food assistance hostage. McKee said the state made millions available to support families and directed emergency funding to the Rhode Island Community Food Bank.
McKee also addressed the ongoing battle over the Revolution Wind offshore wind project, noting a judge ruled Monday that the Trump administration’s stop work order was baseless.
“Until this project is complete, I will stand shoulder to shoulder with my fellow Democratic governors and put the full weight of our state behind this fight,” McKee said. “Let me be clear: We will not back down.”
Washington Bridge and infrastructure
On the Washington Bridge, McKee said the project is on track to be completed two years sooner than Maryland’s Key Bridge replacement. The state secured $220 million in federal funding last year and has filed all rebuild permits.
“I know how frustrating this situation has been for commuters,” McKee said. “We will never compromise when it comes to your safety.”
The governor’s budget will also fully close RIPTA’s remaining $14 million deficit.
Healthcare and education
McKee announced his budget would invest $9.5 million to create the state’s first Marketplace Affordability program to support 20,000 Rhode Islanders at risk of losing HealthSource RI coverage due to federal inaction.
He also proposed $10 million to support hospitals preparing for an increase in uninsured patients and nearly $20 million to help Medicaid recipients stay insured amid federal changes.
On education, McKee said Rhode Island is leading New England in academic recovery from the pandemic, according to Harvard’s Education Recovery Scorecard. The state has closed the achievement gap with Massachusetts by 39% in reading and 29% in math since the start of his administration.
The governor said he would make the Hope Scholarship permanent for all qualifying students regardless of income.
McKee concluded by pledging to continue fighting for Rhode Island families.
“Together, we will stand up to President Trump when he tries to take away Rhode Islanders’ health care, food assistance, jobs, or the programs that families rely on,” McKee said.
