House committee approves $13.6B state budget proposal

June 10, 2022 GMT

PROVIDENCE, R.I. (AP) — A $13.6 billion state budget passed the finance committee in the Rhode Island House late Thursday, sending it to the chamber floor for a vote next week.

The budget proposal is higher than the governor’s recommendation. Democratic Gov. Dan McKee proposed spending $12.8 billion for the state budget plan for the 2023 fiscal year.

The House Finance Committee’s version of the budget accelerates phasing out the car tax, eliminating what would have been the final year of the tax next year at a cost of $64 million. That means nearly all residents would not receive another automobile excise bill. East Providence operates on a different fiscal year than most municipalities.

The committee also added a one-time child tax credit of $250 per child for up to three children per family. It supported the governor’s proposal to eliminate the income tax on military pensions to help veterans, but eliminated the tax entirely instead of phasing it out over five years as the governor had proposed.

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The committee said it wanted to provide targeted taxpayer relief and direct how to spend the rest of the American Rescue Act Plan federal funding. The state received $1.1 billion in federal pandemic relief funding.

McKee proposed spending the largest share, $250 million, on housing initiatives, including building new units of affordable housing. The committee agreed with that recommendation. It also allocated $190 million for future costs to respond to the pandemic.

The budget plan commits to nearly doubling the number of voluntary, free pre-kindergarten seats to 5,000 statewide over five years.

It maintains the governor’s recommendation to spend nearly $170 million to upgrade the state psychiatric hospital. And it would dedicate $100 million to the unemployment trust fund to reduce businesses’ unemployment tax rates for 2023. The committee said 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 committee did not include state funding for a soccer stadium project in Pawtucket, Rhode Island because it said it didn’t receive a formal budget request. The full House of Representatives is scheduled to vote on the budget proposal Thursday.