As state and local budget deliberations begin to heat up, RIPEC brings you an update on major public policy developments in the Ocean State. 

RIPEC on Public Policy

• Thank you to everyone who supported RIPEC’s gubernatorial forum. WPRI Investigative Reporter Steph Machado moderated a lively discussion among gubernatorial candidates Matt Brown, Helena Buonanno Foulkes, Nellie Gorbea, Ashley Kalus, Dan McKee, and Dr. Luis Daniel Muñoz. For those who missed the event, a video of the forum is available here.
  • WPRI 12, “RI governor candidates meet in first on-stage forum”
  • The Public’s Radio, “RI candidates for governor focus on housing, other issues, in forum”
  • The Boston Globe, “Forum underscores differences between R.I. candidates for governor”
  • The Providence Journal, “Governor’s race kicks off with candidates sparring over rent, abortion rights and sales tax”
  • WJAR 10, “Six candidates for Rhode Island governor aim to differentiate themselves at forum”
  • Providence Business News, “Gubernatorial candidates sound off on housing, taxation at RIPEC debate”

• RIPEC published an analysis of education finance in Rhode Island, the third report in its series on municipal finance. The report found that while implementation of the state’s funding formula has successfully targeted additional state aid to districts with high concentrations of student poverty, some of these districts still spend less per pupil than the state overall and lack the fiscal capacity needed to raise additional local revenue.
  • WJAR 10, “Report says Rhode Island public schools ‘approaching state of crisis’”
  • WPRI 12, “Report: Poor districts hurt by RI K-12 funding formula”
  • ABC 6, “Report: RIPEC calls on state to distribute education funds among underfunded school districts hit hard by pandemic”

• In partnership with Bryant University’s Center for Global and Regional Economic Studies, RIPEC published the Key Performance Indicators Quarterly Briefing for the first quarter of 2022. The data show that despite improvements in Rhode Island’s economy across several measures, the state remains 15,500 jobs below pre-pandemic levels and is regaining jobs at a slower pace than both the New England region and the nation.
  • The Boston Globe, “R.I. economy continues to grow, but not everything is so rosy”
  • Providence Business News, “RIPEC-Bryant report: R.I.’s GDP grows for 3^rd straight quarter”

Inside Insights

• ­­­­The proposed fiscal year (FY) 2023 budget for the City of Providence responds to soaring home values by increasing the city’s homestead exemption from 40 percent of assessed value to 45 percent, worsening an imbalance in the city’s property tax system that already heavily shifts the tax burden onto renters and businesses.

• The Rhode Island Office of the General Treasurer released the annual Report of the Advisory Council for Locally Administered Pension Plans, which found that while the funded status improved in 30 of the state’s 34 locally administered pension plans, the combined unfunded liability of these plans amounts to about $2.78 billion.

• An advance estimate released last week by the U.S. Bureau of Economic Analysis projects a 1.4 percent decrease in U.S. GDP in the first quarter of 2022 (annualized), the first contraction since 2020. Combined with the anticipated tightening of federal monetary policy and the Russian invasion of Ukraine, this development has some economists warning of a potential recession. The U.S. Treasury has said that the American “economy is expected to continue its expansion this year,” however.

What to Look for in May

• At the May Revenue Estimating Conference, state budget officers will determine updated estimates of state revenues that lawmakers will use to craft a budget for FY 2023. The conference principals have already heard economic forecasting testimony that projects slower nonfarm employment growth in Rhode Island as compared to projections offered at the Conference last November.