As the Rhode Island General Assembly hits the halfway point of the 2022 legislative session, RIPEC brings you a brief update on major public policy issues in the Ocean State.
RIPEC on Public Policy
- RIPEC released its analysis of Governor Daniel J. McKee’s proposed fiscal year (FY) 2023 budget and the state’s fiscal outlook. Among RIPEC’s findings were that the governor’s budget is balanced on higher-than-anticipated state general revenues. State general revenue spending has been growing at a higher rate in recent years—5.3 percent between FY 2019 and FY 2023 compared to 3.5 percent from FY 2014 to FY 2019. The governor’s budget also includes plans for spending $1.24 billion in federal American Rescue Plan Act (ARPA) funds by FY 2027. RIPEC President & CEO Michael DiBiase urged the careful consideration of allocating these funds, recommending that the state “avoid spending one-time funds on recurring expenditures and minimize the structural deficit going forward.”
- Providence Business News, “RIPEC report warns of increasing general revenue spending trend”
- WPRI 12, “Nesi Notes: March 26”
- Michael DiBiase testified before the Rhode Island House Finance Committee in support of the City of Providence’s proposed $515 million pension obligation bond (POB), which includes stronger guardrails than last year’s proposal. The POB was among the recommendations made by the Providence Pension Working Group, co-chaired by RIPEC, to address the city’s $1.2 billion unfunded pension liability. The unfunded pension liability is “not sustainable,” DiBiase told WJAR 10.
- As municipalities issue new property valuations, many homeowners have seen sharp increases in their home’s value. While the state law limiting the total year-over-year increase in a municipality’s property tax levy to 4 percent restrains property tax increases, Michael DiBiase cautioned that policies under consideration by some municipalities, like homestead exemptions, may lead to more inequity and imbalance in Rhode Island’s property tax system.
- Mirroring a trend seen at the state level across the country, a new Congressional Budget Office analysis shows that federal tax receipts in the first five months of FY 2022 are up 26 percent, or $371 billion, over last year.
- One year after ARPA was signed into law, states have allocated roughly three-quarters of the $155.8 billion in flexible aid provided to them under the law.
What to Look for in April
- RIPEC will continue its series on municipal finance with a report on education finance. Findings from the report will be presented at the Rhode Island League of Cities and Towns’ Annual Convention on April 28.
- RIPEC is a gubernatorial forum on May 5 featuring the six declared candidates for governor. The forum will focus on taxing, spending, and the additional federal funds coming into the Ocean State. The discussion will be moderated by WPRI Investigative Reporter Steph Machado.