RIPEC Analyzes November Revenue and Caseload Estimates

Despite Steady Revenue Growth and Drop in Medicaid Enrollment, Structural Deficit Still Looms Over Rhode Island

Rhode Island’s Revenue and Caseload Estimating Conferences play a central role in the state budget process by setting the available general revenues and the expected expenditures for Medicaid and other public assistance programs. The November 2025 Conferences provided updated revenue and expenditure projections for the current fiscal year (FY 2026) and initial estimates for the next fiscal year (FY 2027), helping to shape the governor’s budget submission in January.

Key Findings

Overall

For FY 2026, the Conferences projected a $29.2 million increase in general revenues and $9.1 million in general revenue savings from caseload expenditures for Medicaid and other public assistance programs. Assuming no other changes to the budget, this would indicate an additional general revenue surplus for FY 2026 of about $38 million.

For FY 2027, the Conferences projected that general revenues would increase by $172.6 million (3.0 percent) over the level in the FY 2026 enacted budget and that general revenue caseload spending would grow by $30.9 million (1.9 percent).

Revenues

Estimates for FY 2026 show a modest 0.5 percent increase in general revenues over the level in the enacted budget.

Revenue estimates were negatively affected by federal legislation (H.R.-1) passed earlier this year—projected to reduce the growth in state tax revenues by $34.7 million in FY 2026 and $36.4 million in FY 2027.

Revenue estimates are often revised upward at the May Conference; over the last ten years, the median increase from November to May was $43.3 million.

The Conference projected stable year-over-year revenue growth rates: 3.3 percent for FY 2026 and 3.0 percent for FY 2027 over the FY 2026 enacted level. Relative to the Conference’s revised FY 2026 estimate, revenues for FY 2027 are projected to grow by 2.5 percent.

Caseload Expenditures

FY 2026 Medicaid enrollment was revised downward by 2.8 percent from the level in the enacted budget. Enrollments are projected to decline by a further 2.8 percent in FY 2027, largely resulting from more restrictive eligibility rules under H.R.-1.

From a peak of over 373,000 in 2023 to about 294,000 projected for FY 2027, Medicaid enrollment is expected to drop by over 20 percent in four years.

For FY 2027, general revenue expenditures for Medicaid are projected to increase by $27.9 million (2.0 percent), as a 4.9 percent increase in the cost/price of services more than offsets savings from enrollment declines.

The projected 2.0 percent growth rate for state Medicaid spending in FY 2027 is substantially lower than the projected FY 2026 increase (8.2 percent). It is also lower than the FY 2027 growth rate used in the most recent deficit projections (4.5 percent).