Empty seats in Rhode Island classrooms, the tangible tax, and the state’s continuing affordable housing crisis highlight this month’s agenda.
RIPEC on Public Policy
- RIPEC released a comprehensive report that uses newly available data to help explain why there are so many more empty seats in Rhode Island classrooms than just a few years ago. Detailing the related trends of enrollment decline and enhanced levels of absenteeism, among RIPEC’s findings were that unprecedented levels of enrollment decline amounted to a loss of as many as one in six students in some districts, and that nearly one in ten students missed at least twenty percent of the school year last year. RIPEC’s report offers recommendations for consideration by state and local policymakers. RIPEC also developed a data dashboard that allows users to compare school districts, charter schools, and demographic subgroups.
- The Providence Business News highlighted the positive effect the recently passed $50,000 tangible property tax exemption will have on local businesses. The article noted RIPEC’s support for the policy change and detailed improvements to the state’s business climate that will result from the tax relief.
Inside Insights
- At its semi-annual convening in November, the state’s Revenue Estimating Conference signaled slower revenue growth and tighter state budgets in the future. The Estimating Conference adjusted general revenue projections for the current fiscal year (FY 2024) to $5.32 billion, an increase of $42.1 million (less than one percent) over the level in the enacted budget. The Conference also set the first estimate for FY 2025 general revenues at $5.45 billion, an increase of $135.8 million, or 2.6 percent, over revised FY 2024 revenues.
- A new report from The Boston Foundation described the scope of the Ocean State’s problems with the development and availability of affordable housing. Rhode Island ranked ahead of only one state (Alaska) in terms of housing permits per 1,000 residents in 2022—producing only 1.3 permits per 1,000 residents, compared to a nationwide total of 5.0.
- A report from Zillow gave further evidence that Rhode Island is suffering an affordable housing crisis. Rents in Providence have increased 7.5 percent since 2022, higher than any other major U.S. city, and more than double the nationwide average. The report credited the rise to a combination of slow housing production and the large numbers of renters in Providence.
- A Tax Foundation analysis of per capita state and local tax collections across the U.S. found that Rhode Island collected $6,489 per person in fiscal year (FY) 2021, 16th highest nationally but lower than every New England state except New Hampshire.
What to Look for in December
- The Rhode Island Office of Management and Budget is reviewing agency requests for FY 2025, with Governor McKee set to announce his budget proposal in January. Items to look for in the governor’s FY 2025 budget proposal include funding for multilingual learners, Medicaid provider rate increases, and a new affordable housing bond offering.
- The Rhode Island Pension Advisory Working Group, appointed by the General Treasurer, is continuing to hold hearings to assess the impact of the 2011 state pension reforms. The Working Group, co-chaired by RIPEC President & CEO Michael DiBiase, is developing options for consideration by the General Assembly to improve pension programs and address unintended consequences of the 2011 reforms.