Through this extended budget season, RIPEC brings you a brief update on the major public policy issues impacting Rhode Island

RIPEC on Public Policy

• RIPEC delivered written testimony to the House Committee on Finance in opposition to the governor’s proposed amendment to Article 8 of the fiscal year (FY) 2021 budget, which would disallow the ability of taxpayers to utilize excess operating losses on their state tax returns as permitted for federal returns by recent COVID legislation intended to help businesses, particularly small businesses, survive pandemic-induced economic fallout.

• In an article on the Rhode Island state budget and proposed bond initiatives, The Bond Buyer cited RIPEC and Bryant University’s Center for Global and Regional Economic Studies’ Current Economic Indicator Briefing for the second quarter of 2020, which projected a historic contraction in Ocean State GDP that outpaced regional and national averages.

• Amid backlash from municipal leaders towards the news that the administration plans to cut state aid to distressed communities by half, the governor’s Municipal Resilience Task Force—comprised of eight members, including RIPEC President and CEO Michael DiBiase—convened for the first time.

Inside Insights

• The Rhode Island Department of Administration released a preliminary audit of FY 2020 that increased general revenues to $4,063.9 million, $141.8 million (3.6 percent) more than anticipated in the final budget enacted in June. Compared to FY 2019, the preliminary audit for FY 2020 found a $39.4 million (1.0 percent) increase in general revenues.

• According to the U.S. Department of Labor’s unemployment report for August, Rhode Island had the second highest unemployment rate in the country at 12.8 percent, and was one of only two states in which the unemployment rate increased from July (11.3 percent) to August.

What to Look for in October

• While the state has instructed all public schools except those in Providence and Central Falls to fully reopen by October 13, most districts are planning to stick with a hybrid model—at least for older students—in which students spend two to four days a week in distance learning.

• The next Revenue Estimating Conference will not take place until the first week in November, but economic forecasting and departmental testimony will begin October 22, giving Rhode Islanders their first real peek into anticipated FY 2021 revenues since May, as well as a preview of anticipated FY 2022 collections. Since legislative leadership has decided to defer action on the FY 2021 budget until after the November election, these projections will take on greater importance than in a more typical year.