• RIPEC released its annual report on the governor’s proposed budget and the state’s fiscal outlook. The report found that the budget represents the continuation of a level of spending that is dramatically higher than just five years ago. “The governor’s FY 2024 budget appears to be the last of a series of flush state budgets fueled by enormous allocations of federal pandemic funding and very large general revenue surpluses,” said RIPEC President and CEO Michael DiBiase. Among the report’s recommendations are that policymakers prepare to curtail spending growth, seek improvements to the state’s business tax climate, and take on comprehensive reform to the education funding formula.
  • Boston Globe, “RIPEC warns that budget ‘dramatically higher’ than 5 years ago.”
  • Rhode Island Current, “New RIPEC Report: ‘Be prepared to curtail the level of spending growth.”
  • ABC 6, “Report highlights need to pull back on COVID-era spending.”
  • Providence Business News, “RIPEC: Fiscal belt-tightening required with drying up of federal funds.”

• Speaking with the Rhode Island Current, Michael DiBiase expressed support for a bill that would provide a tangible personal property exemption on the first $50,000 of assessed value, which RIPEC estimates would eliminate 75 percent of businesses from the tangible tax rolls. The bill “really advances tangible property tax relief,” he stated. In a report issued last year, RIPEC found that property taxes are relatively high in Rhode Island, and that the burden has over time been shifted to businesses and renters.

• RIPEC’s K-12 Education Forum was held May 17 and featured moderated panels on education funding, teacher workforce and professional development, and innovation and choice, as well as a keynote address from Susan F. Lusi, Ph.D., President and CEO of Mass Insight Education & Research. Highlighting last October’s RIPEC report, which outlined the crisis in Rhode Island schools and the need to take significant and immediate action, Michael DiBiase expressed his hope that the forum would “create some momentum and spark more discussions.”
  • Rhode Island Current, “Panelists say retention and recruitment of teachers of color remain a challenge.”

• With 1,700 full-time equivalent positions currently left unfilled, Michael DiBiase outlined the challenges and potential consequences in staffing state agencies with the Providence Business News. “It’s a public, transparent system that has a lot of rules,” he said. “Even in the best of times, it is going to be challenging, and it can inhibit the ability for state government to effectively perform.”

Inside Insights

• A new report from the Annenberg Institute for School Reform at Brown University found that Rhode Island districts have only spent about one-third of Elementary and Secondary School Emergency Relief  (ESSER) funds from the federal government. With $216.0 million in unspent funds as of June 2022, the report ranks Rhode Island’s ESSER spending progress as third-to-last among U.S. states, ahead of only Wisconsin and Vermont.

• A new review by Harvard University and Stanford University researchers shows that Rhode Island students suffered months of learning loss during the COVID-19 pandemic and that schools have not adopted accelerated programs to put students back on track. Harvard Center for Education Policy Research Faculty Director Thomas Kane said that schools “should be required to revisit their recovery plans and add instructional time . . . so that students are made whole.”

• A study from Syracuse University found that the transition to electric vehicles could cost Rhode Island $216.9 million in lost tax revenue by 2035. Governor Dan McKee has unveiled a proposal to mirror California’s emission standards, which would phase out the import of new, gas-powered cars and trucks to the state by 2035. The report also detailed that road usage fees and registration fees on electric vehicles could be potential solutions to fund transportation infrastructure as the state shifts to electric vehicles.

What to Look for in June

• With the first hearing on the budget bill scheduled for later today before the House Finance Committee, the General Assembly has begun its process of debating and passing the budget for fiscal year 2024, which begins on July 1. RIPEC will report on the enacted budget after it is passed in its final form.