Rhode Island Public Expenditure Council

• RIPEC released a report ahead of the fiscal year (FY) 2026 budget process, finding that the projected funding gap for FY 2026 of about $300 million is primarily attributable to the use of substantial one-time revenues to pay for recurring expenditures. Other contributing factors include the growth of health and human services spending—especially on Medicaid—and inflationary mechanisms in the state funding formula for education.
  • Providence Business News, “RIPEC: State has ‘spending problem’“
  • WJAR 10, “RIPEC report finds a projected funding gap of $300 million”
  • Go Local Prov, “RIPEC Blames RI’s $300 million Deficit on Use of One-Time Revenue for Reoccurring Costs”
  • WPRI 12, “Nesi’s Notes”
  • The Public’s Radio, “TGIF: Rhode Island Politics Roundup”

• RIPEC’s comprehensive report on housing policy in Rhode Island received continuing news coverage. Stories highlighted the report’s recommendations for the state to maximize its return on investment, consolidate housing governance structures and programs, and seek innovative solutions to the state’s housing challenges.
  • Governing Magazine, “Rhode Island Could Create a ‘Public Developer’ to Address Housing Crisis”
  • Providence Journal, “Three years in, is RI’s Department of Housing making a difference? Here’s where it stands.”
  • Ocean State Stories, “’Do the math’: Historic $120 million bond not enough to solve Rhode Island’s housing crisis”

• A Providence Journal article on a plan by the City of Providence to ask the General Assembly to exceed the state’s four percent cap on year-over-year property tax levy increases cited RIPEC’s June 2024 analysis of Rhode Island property taxes; the report “found that extreme surges in residential property values in recent years have accelerated inequity [between taxpayers] and exacerbated the affordable housing crisis while limiting economic growth.”

• RIPEC President and CEO Michael DiBiase spoke with the Providence Business News concerning the state’s projected budget deficit for FY 2026. “You have to look at spending first,” DiBiase said. “Spending is higher than revenue, even with a budget last year that was balanced using a lot of one-time money. When you do that and [those funds are] not available the following year, you have a structural problem.”

Inside Insights

• Rhode Island’s Department of Housing submitted its Organizational Plan to the General Assembly. The plan suggests consolidating responsibilities under the Executive Office of Housing to improve accountability in policymaking and the use of public dollars. RIPEC identified the fragmented nature of the state’s housing agencies in its October report and called for structural changes in a November op-ed in the Boston Globe.

• Many Americans are choosing to move to low-tax states over high-tax states, according to a January report from the Tax Foundation. Calculating inbound to outbound migration in each state, the report ranked Rhode Island in the bottom half of states (32nd) for net migration in 2024, with a net population decrease of 0.03 percent.  

• School and district accountability reports for 2024—released by the Rhode Island Department of Education in December—show year-over-year improvement in K-12 outcomes while pandemic-era losses linger; 60 percent of schools had a star rating of three or higher in 2024, up from 50 percent in 2023, but down from 70 percent in 2019.

• Rhode Island earned an F for the lack of fairness in its school finance system in the Education Law Center’s annual Making the Grade report, which evaluates the education finance systems of states. Using the most recent available school data from 2021-2022, the report labeled the Ocean State’s system “regressive” and highlighted the seven percent funding discrepancy between its low and high poverty districts.

• The Board of Commissioners of RIHousing approved Broad Street Homes for firm financing in December, after concerns about high per unit costs were raised by a Commissioner at a Credit Committee meeting. The 46-unit, 100.0 percent affordable project in Central Falls is estimated to cost $571,943 per unit, making it, on a per unit basis, the most expensive project to date financed from pandemic-era, one-time federal funds. RIPEC’s housing report found that project costs had been deemphasized in Rhode Island’s housing production programs and that many projects had high per unit costs.

What to Look for in January

• RIPEC will offer testimony based on its October report on the state’s recent investments in affordable housing to three House Commissions on January 16th.   

• The governor will release his budget proposal for FY 2026 on January 16th.