Rhode Island Senate approves $13.96B FY25 budget in 34-1 vote

The Rhode Island Senate stamps the House-crafted annual budget before it can shape the next year’s spending. This year, the mood was agreeable in the Senate chamber, with only one dissenting vote cast. Seen here are Democratic Sens. Lou DiPalma of Portsmouth and Frank Ciccone of Providence on the Senate floor on June 13, 2024. (Will Steinfeld/Rhode Island Current)

A $13.96 billion fiscal 2025 budget awaits Gov. Dan McKee’s signature following passage in the Rhode Island Senate just after the clock struck midnight on Friday.

The spending plan, approved by a 34-1 vote, mirrors the version that sailed through the Rhode Island House on June 7 . The Senate issued its decision swiftly and without debate — a departure from the hours of discussion on legislation that preceded it on the final night of the session.

Senate Minority Leader Jessica de la Cruz, a North Smithfield Republican, cast the sole vote against the spending plan. Two other senators, Jonathon Acosta, a Central Falls Democrat, and Elaine Morgan, a Hopkinton Republican, abstained from the vote.

“ This budget is responsible and forward thinking, and it is based on facts and data without putting undue burdens upon the taxpayers,” Senate Finance Chairman Lou DiPalma, a Middletown Democrat, said in a statement.

“It meets the needs of today with an eye on Rhode Island’s future by heavily investing in education and health care. The budget corrects long-standing issues with provider reimbursement rates, which in turn, will not only support our population’s well-being and health, but it will also help uplift the dedicated workers who care for us all. It also addresses our retirees who have been struggling for many years and I am proud of this legislation that will serve all of Rhode Island’s residents well.”

The approved budget falls just shy of the $14 billion high-water mark that characterized fiscal 2024, but is $271 million more than what McKee proposed in January.

Among its provisions are sweeping changes to the much-maligned education funding formula that determines state aid for K-12 schools, adding in money for multilingual learners along with extra funds to offset a decrease in federal aid. The $70.9 million increase in state education aid is $33.8 million more than what McKee proposed in January.

Meanwhile, the updated budget adds $100 million to what McKee proposed for rate hikes to Medicaid providers who work in behavioral, community and at-home care settings. The full $160 million cost ensures that providers will get the long-awaited payment rates recommended by the Office of the Health Insurance Commissioner in a single year, rather than the three-year phase-in McKee had planned.

The budget also revives annual, cost-of-living increases for the 19,000 retired state workers and teachers who stopped working before the 2011 pension reforms took effect, along with other updates to state pension policy that benefit a wider swath of retired and active state workers and teachers, costing the state an expected $27.5 million this year.

Voters will have the final say on a proposed $343.5 million in state-issued bonds, spread across four questions headed to the November ballot. They include a $120 million housing bond — the largest in state history — along with a separate, $160.5 million bond for life sciences and cybersecurity programs at the University of Rhode Island and Rhode Island College, respectively.

A third ballot question proposes $53 million borrowed for green economy initiatives, including $13 million in forest and farmland preservation and $3 million to help rebuild the Newport Cliff Walk. The fourth question pitches $10 million for capital improvements for arts organizations .

Notably absent from the approved spending plan is the requested tax code rewrite intended to appease Citizens Bank. Lawmakers approved separate legislation Thursday intended to keep Citizens from moving its 4,200-person workforce and sprawling Johnston headquarters out of state. However, the budget does not account for the projected $7.5 million in lost tax revenue in the initial year, which will instead be siphoned from state surplus money and a secondary rainy day account begun in fiscal 2024.

Other key provisions of the revised spending plan include

• $84 million from various funds, including unspent federal aid and state long-term capital projects money, to cover the state share of the $400 million Interstate 195 Washington Bridge rebuild
• $60 million to the Department of Children, Youth and Families including money to increase pay to contracted support providers
• $15 million for RIPTA, not enough to cover its entire $18.1 million shortfall but sufficient to stave off service cuts, as the state transit agency confirmed in its own announcement June 6
• $1 million to start a new medical debt program helping low-income residents pay off long-standing medical debt

McKee is scheduled to sign the budget on Monday. The new fiscal year starts July 1.

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