RIPEC’s analysis of the governor’s FY 2027 proposed budget, a study on rent control in Providence, and mixed signals for Rhode Island’s economy
RIPEC on Public Policy
- RIPEC released a policy brief detailing key features of the governor’s FY 2027 budget proposal. The brief found that state spending growth is relatively restrained after a period of extraordinary expansion, but that spending relies on a sharp tax increase on individual and pass-through business income over $1.0 million. The brief also highlights that despite major changes in federal programs, federal spending by the state is set to increase 7.8 percent over the FY 2026 enacted budget. The budget includes a $600 million bond offering, which would be by far the highest in the state’s history.
- Rhode Island Current, “RIPEC warns of unsustainable pace of state spending in FY27 budget analysis”
- Ocean State Media, “Rhode Island business group offers mixed review for McKee’s new budget”
- Providence Business News, “RIPEC: McKee’s FY 2027 budget controls spending but relies on ‘millionaires tax’”
- GoLocalProv, “Gov. McKee’s Tax Increase Criticized in Study of Proposed Budget”
- What’s Up Newp, “RIPEC: Governor’s budget holds spending in check, but millionaire’s tax raises competitiveness concerns”
- The Brown Daily Herald, “Proposed $14.2 billion state budget seeks to close deficit”
- The Providence Foundation commissioned RIPEC to report on the potential effects of rent control policies in Providence. The report found that rent control has negative long-term impacts on housing markets, including reducing supply and worsening overall affordability. The report recommends that policymakers focus on expanding housing production, implementing targeted rental subsidies, and utilizing tax stabilization agreements to facilitate commercial-to-residential conversions.
- Providence Journal, “Biz group report says rent control won’t solve housing affordability”
- Providence Business News, “New report warns rent control could shrink Providence’s housing supply, drive up costs”
- Rhode Island Current, “Ready or not, the Providence City Council is pursuing rent stabilization”
- The Brown Daily Herald, “Providence City Council proposes 4% cap on annual rent increases”
- RIPEC and the Center for Regional and Economic Studies at Bryant University released its quarterly Key Performance Indicators (KPI) Briefing, which found that Rhode Island’s economy experienced mixed performance at the end of 2025. The number of employed Rhode Island residents rebounded and the state’s unemployment rate fell, but in-state jobs declined, sales tax receipts dipped, and labor force participation remained flat.
- Boston Globe, “R.I. economy saw ‘mixed performance’ at end of 2025: As employment rebounded, jobs dropped, briefing says”
- Providence Business News, “RIPEC: Economic ‘mixed signals’ mark Q4 of 2025”
- What’s Up Newp, “Rhode Island economy sends mixed signals to close out 2025, new report finds”
- In an interview with Channel 10 WJAR, RIPEC Director of Policy and Research Justine Oliva commented on the focus on affordability in Governor McKee’s State of the State address. “The most important thing that the general assembly can do to address the affordability issue is to hold the line on spending,” she said.
- RIPEC Senior Policy Analyst Jeffrey Hamill spoke to the Providence Business News concerning the new $120 million housing bond in the governor’s proposed FY 2027 budget. “The state’s strategy has focused almost entirely on high-cost, heavily subsidized new construction for lower-income households,” Hamill said. “It hasn’t been an efficient way to address Rhode Island’s broader housing challenges.”
- We are excited to welcome Jonathan Wang to the RIPEC team as our new Public Policy Analyst. Jon, a Rhode Island native, brings research and consulting experience in the areas of education, healthcare, and economic policy. Jon holds a bachelor’s degree from Bucknell University and a master’s degree from the Duke University Sanford School of Public Policy.
Inside Insights
- The United Van Lines 49th Annual National Movers Study highlights Rhode Island as a moderately inbound state, while continuing to rank New Jersey and Massachusetts as among top outbound states nationally. The 2025 U-Haul Growth Index identifies Rhode Island as among top outbound state in terms of the net loss of residents (ranking 40th in 2025 and 38th in 2024). RIPEC’s 2025 policy brief on the risks of increased income taxes on high earners found the state to be a net loser of income-tax-paying residents and highlighted a strong correlation between high tax burdens and net outmigration. [This entry reflects a correction included in an earlier version of this newsletter]
- A new study from WalletHub ranks Rhode Island last in the nation for starting a business in 2026. The ranking is based on the state’s performance across three primary categories: Business Environment (50th), Access to Resources (19th), and Business Costs (38th).
- The U.S. Census Bureau released its American Community Survey 5-year estimates for 2024, finding that 51.1 percent of Rhode Island renter households are housing cost-burdened—defined as spending more than 30 percent of their income on housing—compared to 29.1 percent of owner-occupied households. RIPEC has previously found that many Rhode Island cities and towns, including those with the highest shares of renters, exacerbate this disparity by imposing substantially higher property taxes on non-owner-occupied properties.
What to Look for in February
- RIPEC will release an analysis on chronic student absenteeism in Rhode Island’s K-12 schools, updating findings from its December 2023 report on empty seats in Rhode Island classrooms.