Rhode Island Public Expenditure Council

• RIPEC released a new policy brief analyzing proposed legislation that would sharply raise the state’s top income tax rate from 5.99 to 8.99 percent on income above around $625,000. RIPEC’s research showed that the proposed 50.0 percent increase would risk negative long-term consequences for state revenues and the economy, threatening business growth, philanthropic activity, and other tax payments associated with the state’s highest earners. The brief also found Rhode Island already has a progressive income tax structure, and that the Ocean State has become less competitive in the last five years, as 20 other states have reduced their top rate.
  • Providence Business News, “RIPEC: Wealth tax is no solution to state’s fiscal challenges”
  • Boston Globe, “Leaders favored for R.I. Senate’s top posts revive debate on taxing state’s wealthiest”

• RIPEC published an op-ed in the Boston Globe calling on Providence city leaders to address the gross disparity in property tax rates among resident homeowners, businesses, landlords, and renters. RIPEC noted that the City’s especially unbalanced tax structure has a negative impact on both economic growth and housing affordability and offered recommendations for reform. 

• RIPEC and The Center for Global and Regional Economic Studies at Bryant University released the Key Performance Indicators Briefing for Q1 2025. The Briefing showed that despite adding 800 jobs in the first quarter, Rhode Island’s economy showed signs of increasing weakness. The number of employed Rhode Islanders fell by 2,300 in Q1, and the state’s unemployment rate of 4.7 percent significantly exceeds the rates of both New England and the nation.
  • Boston Globe, “R.I. added 800 jobs in the beginning of 2025, but the state economy is showing signs of ‘weakness,’ a new briefing says”
  • Providence Business News, “RIPEC: R.I.’s economy showed weakness despite adding 800 jobs in Q1”
  • What’s Up Newp, “Rhode Island adds jobs, but key indicators signal economic softening”

• RIPEC’s recent report on Rhode Island’s shift in state and local taxes and its effect on K-12 education funding was highlighted in a WJAR story. RIPEC’s report found that state aid to education grew nearly three times faster than local aid between fiscal years 2019 and 2023. “The state’s least wealthy districts experienced relatively low increases in state education aid and even smaller increases in local aid,” RIPEC’s Director of Policy and Research Dr. Justine Oliva noted, a combination that makes it more difficult “to get to greater educational equity.”

• RIPEC’s October report on housing was featured in a Providence Journal story on the struggle that Tempo, an affordable housing project on Parcel 9 in Providence, is having in  finding tenants for some of its income-restricted units. The second stage of the development on this parcel was highlighted in RIPEC’s report for having a particularly high development cost of $538,947 per unit despite being built on state land.

Inside Insights

• The independent forecasting firm Moody’s testified at the May Revenue Estimating Conference that “Rhode Island’s economy entered 2025 on solid footing” but that “shifting federal policy has dimmed prospects for the state’s near-term growth.” Moody’s projected that Rhode Island will lose jobs, and the unemployment rate will grow through 2026.

• A new report by Realtor.com ranked Rhode Island last among the 50 states with F grades for both housing affordability and homebuilding. The study cited complicated zoning as a reason for the high price of homes and lack of supply in the Ocean State.  

• The National Association of State Budget Officers (NASBO) detailed how unusually large surplus funds have affected state budgets in recent years. NASBO noted that these surpluses were spent on one-time purposes, increasing rainy day funds, or remained in states’ general funds. A recent report by RIPEC detailed how the use of surplus funds for recurring expenditures contributed to a large projected structural deficit for the Rhode Island state budget.

What to Look for in May

• RIPEC will hold a half-day Housing Forum on Wednesday, May 28th at Gilbane’s Learning Center in Providence. The forum will feature two panels on how Rhode Island can balance market and government solutions to address the state’s housing challenges. Rhode Island House Speaker K. Joseph Shekarchi will provide the keynote address to open the forum and Senator Jake Bissaillon will offer closing remarks.