As lawmakers begin scrutinizing a new state budget proposal for next year, RIPEC brings you a brief update on major public policy developments in the Ocean State.
RIPEC on Public Policy
- RIPEC released the Key Performance Indicators Quarterly Briefing for Q4 2021 in partnership with Bryant University’s Center for Global and Regional Economic Studies. The data show that while the state’s economic outlook continues to improve, Rhode Island lags New England and the U.S. in key areas, including unemployment and job growth.
- The Providence Journal, “Study: RI economy recovers from pandemic, but slower than nation’s economy”
- Providence Business News, “RIPEC-Bryant report: R.I. economic recovery lagging nation”
- The second report in RIPEC’s series on municipal finance analyzes property tax systems across the state’s 39 cities and towns. The report found that Rhode Island struggles with large imbalances in property wealth, as well as striking differences among the tax burdens of property owners, and that these imbalances affect the delivery of equitable municipal services while hindering economic development and affordable housing.
- The Boston Globe, “New report says R.I.’s property tax system is ‘out of balance,’ hindering affordable housing construction, economic development”
- Providence Business News, “RIPEC: Municipal property tax system ‘out of balance,’ needs reform”
- Having served as co-chair to the City of Providence’s Pension Working Group, RIPEC President and CEO Michael DiBiase offered his support for recommendations to address the city’s $1.2 billion unfunded pension liability in the Working Group’s final report, including seeking approval for a $500 million pension obligation bond (POB). DiBiase noted that while POBs involve risk, the city has limited options and cannot afford to do nothing. Additionally, the Working Group is recommending additional guardrails for the POB, including gradually increasing the city’s annual pension payments and requiring voter approval.
- The Providence Journal, “Mayor Elorza floats $500 million pension obligation bond, smaller than last year’s pitch”
- Michael DiBiase commented to the Providence Business News that Governor Daniel J. McKee’s fiscal year 2023 budget proposal is relatively conservative overall, despite proposing hundreds of millions of dollars in new spending from the American Rescue Plan Act (ARPA) and surplus funds.
- The U.S. Department of the Treasury released its final regulations on how cities and states can spend billions in ARPA funds. Among other clarifications, the rule gives cities and towns greater flexibility to use funds to replace lost revenue.
- Thanks to stronger than expected revenues and an influx of federal funds, nearly half of states are considering proposals to cut taxes early in their 2022 legislative sessions.
What to Look for in February
- RIPEC will publish an analysis of Governor McKee’s FY 2023 budget proposal and the state’s fiscal position, as well as its annual “How Rhode Island Compares” report.
- State lawmakers in the House and Senate will begin holding hearings on the individual articles of the governor’s proposed FY 2023 budget.