State Budgets 2012: Rhode Island


Rhode Island

To see more state budget news and information, visit State Budgets 2012

Budget Background:

  • Fiscal Year Begins: July 
  • Frequency of Legislative Cycle: Annual
  • Legislative Session for 2012: Convened January 3, 2012
  • Frequency of Budget Cycle: Annual

Learn more from the National Association of State Budget Officers

Budget News and Information: 2012


4/12/12: RI Gov. urges lawmakers to pass pension cut plan

Gov. Lincoln Chafee and mayors from cash-strapped cities pleaded with Rhode Island lawmakers Thursday to approve a municipal rescue package as angry firefighters worried about their pensions looked on. Chafee, an independent, warned that additional Rhode Island cities will face insolvency if they aren't given authority to cut pension benefits and waive certain state mandates. He said the state's reputation and economy are on the line if more cities join Central Falls in seeking bankruptcy protection.

Read More:      

3/22/12: RI lawmakers reviewing state budget

Rhode Island lawmakers are continuing their work on the state budget. The House and Senate finance committees have scheduled hearings Thursday on Gov. Lincoln Chafee's recommended budget for the fiscal year beginning July 1.

Read more:  Associated Press

3/17/12: State House Report: Gambling Revenues, Student Loan Rates & the Ban on Tanning

This week the General Assembly tackled the state’s deficit crunch through a series of proactive bills. The GA's latest proposals were aimed at generating additional revenue through increased taxes on the wealthy and by giving tax breaks to small businesses. 

Read more: Go Local Prov

3/15/12: House gets earful on proposal to change rental, meals taxes

State Rep. Donna Walsh (D-Dist. 36) was among more than two dozen people who spoke against Governor Chafee’s proposed new taxes at a hearing March 7 before the General Assembly’s House Finance Committee.  The taxes would be aimed at Rhode Island’s tourism industry and include a hike in the tax levied on restaurant meals and beverages, from 8 to 10 percent, which attracted the most opposition. There is also a proposal to extend the 13 percent lodging tax to vacation home rentals and smaller bed-and-breakfasts, which are currently exempt.

Read more: South County Independent

3/7/12: RI restaurant owners decry proposed meal tax hike

Rhode Island restaurateurs urged state lawmakers to defeat a proposed meals tax increase Tuesday, saying the higher taxes could keep diners out of their eateries.  The proposal from Gov. Lincoln Chafee, under legislative review this week, would raise the state's tax on restaurant meals from eight to 10 percent. The estimated $40 million in new revenue would be dedicated to public schools. The state faces a projected $117 million deficit next year.

Read more: CBS Money Watch

3/6/12: RI coalition seeks tax hike on wealthiest earners

A coalition of organized labor and advocates for the disabled and the homeless in Rhode Island are asking state lawmakers to raise taxes on wealthy residents to prevent further budget cuts. The group calling itself Rhode Islanders for Tax Equity launched its tax increase campaign Tuesday at the Statehouse.  The coalition supports raising the income tax rate from 5.99 percent to 9.99 percent for individuals making $250,000 a year or more. The proposal would raise $118 million a year -- enough to eliminate the state's projected deficit for next year.

Read more: Boston Globe

2/28/12: RI lawmakers to review budget proposal

Reductions in Medicaid benefits and the elimination of a state worker holiday are on the agenda as Rhode Island lawmakers return to the Statehouse after a week off. The House and Senate finance committees are slated to review various proposed budget cuts Tuesday. One would eliminate dental services now provided to adult Medicaid recipients. Another would abolish Election Day as a paid holiday for state workers.  Both proposals are included in Gov. Lincoln Chafee's budget recommendation, which seeks to eliminate a $117 million deficit projected for the fiscal year beginning July 1.

Read more:  Boston Globe

2/27/12: RI mulls ending dental care for low-income adults

Rhode Island would no longer cover routine dental care for low-income adults under a proposal by Gov. Lincoln Chafee that aims to save the state $2.7 million. Public health advocates are urging lawmakers to reject the cut, saying the state could end up paying more if people show up at emergency rooms with serious complications from preventable dental problems. Chafee spokeswoman Christine Hunsinger said eliminating dental coverage for adult Medicaid recipients isn’t a step Chafee wants to take, but that it’s necessary to resolve a $117 million budget deficit without other, more damaging cuts to social service programs.

Read more: Boston Globe

2/23/12: Chafee hints at withdrawing meal tax hike if revenue strong enough

Speaking at a business development forum Thursday, Gov. Lincoln Chafee hinted that he might withdraw his proposed hike in the meals and beverage tax if new revenue forecasts due in May are high enough. “We’re hoping with those new revenue estimates we can work on the meals and beverage tax,” Chafee said. “Let’s hope those May numbers continue the positive trend they’re on.”

Read more: Woonsocket Call

2/9/12: R.I. budget proposal targets eateries

A week after Gov. Lincoln Chafee released his budget proposal to the General Assembly, Rhode Island residents are expressing their distress over its proposed tax increases, which Chafee himself called "controversial" during his annual State of the State address to legislators last week. The almost $76 million of tax hikes in the proposal include a four-cent increase to the state tax on cigarettes, as well as an expansion of the taxable base for the lodging tax, extending it to certain bed-and-breakfasts and rental properties. The sales and use tax would expand to include services such as limousines and taxis, moving, storage and car washes. A new tax would also be applied to clothing and footwear purchases exceeding $175.

Read more: The Brown Daily Herald

1/31/12: RI Gov. calls for new taxes, more school spending

Rhode Island Gov. Lincoln Chafee made his pitch for new taxes on restaurant meals, pet grooming, car washes and taxi fares Tuesday, saying higher taxes on discretionary spending is the best way to rescue struggling cities and schools as the nation's smallest state struggles to escape its economic doldrums. Chafee, an independent, unveiled his $7.9 billion budget proposal Tuesday night as he delivered the annual State of the State address. It now moves to lawmakers, who are likely to make big changes before approving a final budget later this spring.

Read more: Boston Globe

1/31/12: Details from RI Gov.'s $7.9 billion budget proposal

Highlights from Rhode Island Gov. Lincoln Chafee's $7.9 billion budget proposal for the fiscal year beginning July 1.

Read more: Boston Globe

1/31/12: Chafee proposes tax hikes to boost aid to schools

In a state of the state speech promising “the future is today for our cities and towns,” Gov. Lincoln D. Chafee Tuesday unveiled a $7.94 billion state budget for fiscal 2013 that boosts spending on local schools by extending the reach of the state sales tax and cutting spending on areas including health care services.  The budget, which represents a $241.5 million, or 3.1 percent, spending increase from the fiscal 2012 budget, would tax transactions now exempt from the 7 percent sales tax, such as pet supplies, taxi rides, freight shipments, car washes, warehousing, storage and clothing items worth more than $175. The combined sales tax increases are projected to contribute $27.1 million to state coffers.

Read more: Providence Business News

Budget News and Information: Previous Budget Cycles


6/13/11: Budget Plan due to Emerge Shortly

With a new state budget likely to emerge from closed-door negotiations this week, top Democrats in the state General Assembly were still wrangling late last week over how to raise taxes — if at all — and how deep to cut spending. State lawmakers, as usual at this point in the legislative session, were reluctant to reveal any specifics about how they plan to close a state budget deficit initially pegged as high as $331 million, but since revised to about $186 million.

Read more: Providence Journal

6/10/11: Rhode Island Lawmakers to Pitch New Budget Proposal

Rhode Island lawmakers say they'll introduce a new state budget proposal next week. Time is running out for lawmakers to adopt a new spending plan before the next fiscal year begins July 1. Gov. Lincoln Chafee, an independent, proposed a $7.66 billion budget in March that included a lower but broader sales tax. Lawmakers balked at the breadth of Chafee's tax expansion, and have been working on a revised proposal ever since.

Read more: Boston Globe

6/8/11: State GOP: Tax Increases Inevitable

With 23 days to the start of the new fiscal year and still no details on what the final state budget will look like, the Rhode Island GOP warned yesterday that the state is inevitably headed for higher taxes. State Chairman Ken McKay pointed to a news report that said the Senate Finance Committee chairman is in negotiations over “raising taxes.” McKay demanded to know more about those negotiations—saying General Assembly leaders should disclose what is being discussed.

Read more: Go Local Prov

6/7/11: Cuts, changes in RIte Care under examination

General Assembly leaders crafting a state budget for next year are weighing a proposal that would save more than $26 million next year from RIte Care, the state’s health-insurance program for low-income families, but leave about 6,600 Rhode Island parents without health insurance. The proposal would lower the income ceiling for adults and parents to qualify for RIte Care, from 175 percent of the federal poverty level (which is about $32,428 a year for a family of three) to 133 percent (about $24,645 a year for a family of three), according to lawmakers familiar with budget deliberations.

Read more: Providence Journal

6/7/11: Chafee’s MAST program may strain most fiscally-stressed communities

The Municipal Accountability Stability Transparency Fund, proposed by Gov. Lincoln D. Chafee in the 2012 fiscal budget, is a good idea but could strain the most fiscally-stressed communities in the state, the Rhode Island Public Expenditure Council said Tuesday. MAST, designed to motivate cities and towns to properly fund their municipal pension obligations, would provide $19.3 million of additional state aid using money collected through the state meals and beverage tax to those communities that employ fiscally prudent practices. The plan was flagged by Moody’s Investors Service as “positive” last March.

Read more: Providence Business News

6/3/11: RIPEC Report Backs Sales-Tax Reform, with  Caution

The Rhode Island Public Expenditure Council, a business-backed think tank, released a report Thursday concluding that Rhode Island’s sales tax should be reformed, lending a degree of public support for a controversial tax plan pushed by Governor Chafee. The report comes as leading state lawmakers continue to hint that some of the sales-tax changes proposed by the governor may be incorporated into the state budget they will unveil later this month.

Read more: Providence Journal

5/20/11: Poll: Most in R.I. Don't Want Nursing Home Funds Cut

In their drive to head off the $12.8-million cut in Medicaid spending that Governor Chafee has proposed, the state’s nursing-home industry is circulating results of a poll that suggest the vast majority of Rhode Islanders do not want their government to slash money to nursing homes that “serve our most vulnerable citizens.” For every cut in state spending that Chafee has proposed, there has been opposition. The poll that McLaughlin & Associates conducted for the Rhode Island Health Care Association reflects the lobby’s own effort to escape the new governor’s budget-cutting knife. The association represents 60 of the 85 homes that accept Medicaid patients.

Read more: Providence Journal

5/17/11: R.I. Assembly, governor agree on need for pension reform

Will 2011 be the year of pension reform in Rhode Island? With time running out in the current session of the General Assembly and a growing sense of urgency that Rhode Island must deal quickly with its crushing pension debt, leaders are talking about a special legislative session this fall to fix a broken retirement system.

Read more: Providence Journal

4/12/11: RI business groups protest gov's sales tax plan

Dozens of Rhode Island business owners and advocates rallied at the Statehouse on Tuesday to protest Gov. Lincoln Chafee's call to impose new sales taxes on a range of goods and services. They urged lawmakers to oppose Chafee's tax proposal, which they said would stifle the economic recovery just as it takes hold. The rally came a day before the House Finance Committee begins hearings on the sales tax proposal.

Read more: Associated Press

4/12/11: Chafee plan: Consumers could save $95 million in taxes

Rhode Islanders could save close to $95 million on certain purchases, if a proposal by Governor Chafee to reduce the state sales tax on those items is adopted by the state General Assembly, according to updated estimates released by the administration late Monday. The estimated savings would come from cutting the tax from 7 to 6 percent, which would reduce the cost to consumers for electricity, televisions, cars, computers and more.

Read moreProvidence Journal

4/11/11: State looking to maintain Medicaid coverage level

In Arizona, the state stopped paying for transplants for poor people covered by its Medicaid program; two people have reportedly died as a result.  In Idaho, people rallied at the State House asking for tax increases rather than the $108-million cut planned for Medicaid — to no avail. But in Rhode Island, Governor Chafee’s proposals for the state Medicaid program have yet to attract much noise. Some providers, especially nursing homes, are upset about proposed cuts in reimbursements. But Chafee’s plan does not involve removing anyone from the Medicaid rolls or making draconian cuts in services.

Read more: Providence Journal

4/10/11: General Treasurer Gina Raimondo wants long-term solution to underfunded pension system

As Rhode Island struggles with a recession, crippling budget deficits, high taxes and declining services, General Treasurer Gina Raimondo is trying to break free of the chains of the past and help guide the state to a brighter future. Her objective: comprehensive public-pension reform that will provide greater security to public employees without crushing the taxpayers. The challenge is daunting, the obstacles formidable, the numbers staggering.

Read more:  Providence Journal

3/22/11: RI lawmakers to begin work on state budget

Rhode Island lawmakers are starting their most important work of the year with hearings into Gov. Lincoln Chafee's budget proposal.  The House Finance Committee on Tuesday is scheduled to begin the first of many hearings into Chafee's $7.66 billion spending recommendation.  Lawmakers will use the governor's proposal as a template but are likely to make big changes before approving the budget. The cornerstone of Chafee's plan calls for a lower, broader sales tax imposed on a long list of services and goods not currently taxed.

Read more: Associated Press

3/22/11: Lawmakers begin hard look at Chafee budget

Legislative hearings begin this week on Governor Chafee’s $7.66-billion tax-and-spending plan. Most of the opposition, so far, has centered on Chafee’s bid to extend the state’s sales tax to a long list of items from haircuts to home-heating oil, while reducing the tax on most items from 7 percent to 6 percent. But the April 13 hearing on that proposal is still weeks away.

Read more: Providence Journal

3/20/11: RI Gov. Chafee's tax proposal faces criticism

Rhode Island business groups and lawmakers are taking aim at Gov. Lincoln Chafee's plan to lower the sales tax and impose it on many more goods and services, saying the proposal would put the state at a competitive disadvantage with its neighbors. Chafee is proposing to lower the overall sales tax from 7 to 6 percent, to make it lower than the sales tax rates in Massachusetts and Connecticut. He would expand the tax to items that have long gone tax-free, including eyeglasses, haircuts, taxi rides, non-prescription drugs and tickets to movies, concerts and sporting events.

Read more:  Associated Press

3/18/11: Legislators hear opposition to expanding R.I. sales tax

Legislators got their first earful of opposition from the state’s Realtors, movie-theater owners and the manufacturers of prescription drugs at risk of losing exemptions from the state’s 7-percent sales tax under proposals that both Governor Chafee and a number of legislators are pushing in the General Assembly this year.

Read more: Providence Journal

3/17/11: Chafee, Raimondo eye far-reaching pension changes

Rhode Island taxpayers and state workers are likely to face much higher pension payments under new policies being seriously considered by Gov. Lincoln Chafee and General Treasurer Gina Raimondo that have received scant attention up to now. The Chafee administration quietly disclosed last week that it’s weighing a major change in how taxpayers and workers divide up the escalating cost of annual contributions to Rhode Island’s state pension fund. The idea was buried deep inside official budget documents reviewed by

Read more: WPRI

3/16/11: Chafee: 6% tax would help RI's image

Governor Lincoln Chafee says he believes his plan to dramatically change Rhode Island's sales tax structure will improve the state's image. The Governor's 2012 budget plan includes lowering the state sales tax from seven-percent to six-percent, while also adding a one-percent sales tax on certain items and services that are currently tax-exempt.

Read more: WPRI

3/16/11: Lawmakers to get down to business on budget

Last week, with the lights and cameras capturing his every move, Governor Chafee told Rhode Islanders just how he plans to raise enough taxes to fill the state budget deficit and still spark an economy that boasts one of the highest unemployment rates in the nation. His budget presentation, delivered March 8, was essentially the end of act one — the first piece of a story line that had been building for several months. Act two begins this week, and with it, the focus shifts to a different set of players who will ultimately determine how the story ends.

Read more:  Providence Journal

3/16/11: Rhode Island Seeks To Bolster Local Pension Plans

Rhode Island Gov. Lincoln Chafee is proposing a program that provides incentives for cities and towns to fully fund their pensions and report financial data, an approach considered unique by several observers. The governor's plan, part of his budget proposal that must be enacted by the legislature, aims to encourage municipalities to address shortfalls in local pension plans. Combined, the plans are only 41% funded and face $2 billion in unfunded liabilities, according to the state.

Read more:

3/15/11: Chafee says RI must end borrowing for road work

Gov. Lincoln Chafee wants Rhode Island to stop borrowing money to pay for its highway projects. Chafee, an independent, said Tuesday that he wants to use driver's license and vehicle registration fees to pay for road work and upkeep. The move could save the state $43 million in annual interest payments on transportation debt. Those payments will reach an estimated $70 million within a decade.

Read more: Boston Globe

3/13/11: Chafee factors marijuana sales into budget plan

The long-awaited debut of medical marijuana dispensaries in Rhode Island this spring promises to help deal with the state’s projected $295-million budget deficit. Last week, Governor Chafee proposed $157 million in new taxes on a wide array of items, including a 6-percent sales tax on medical marijuana sold at dispensaries.

Read more: Providence Journal

3/13/11: Chafee says he tried to ‘share the sacrifice’ in his budget proposal

Governor Chafee acknowledges that some of the tax changes he proposes in his budget have irritated some people and businesses. He says it is fair to describe the budget as “a bitter pill … [with] not a lot of honey” that would make it more palatable.

Read moreProvidence Journal

3/11/11: Chafee’s budget proposes changes to jobless benefits

Governor Chafee, in the state budget he submitted to the General Assembly on Tuesday, proposed bringing the state’s unemployment-insurance trust fund back to solvency by 2015 through increases in the employer tax that funds unemployment and changing benefits paid out to future unemployed workers.

Read more: Providence Journal

3/11/11:  Chafee budget proposes ending textbook subsidy for non-public schools

As dozens of grade-school students from across the state gathered at the State House Thursday in their matching plaid skirts and burgundy sweaters for what is known as Catholic School Day, controversy erupted over Governor Chafee’s attempt to end the taxpayer subsidy that helps buy textbooks for students at non-public schools. Chafee’s proposed budget for next year would repeal a law that provides more than $241,000 a year in state reimbursements to school districts to provide about 6,000 school books to students at non-public schools, including the 44 schools under the wing of the Roman Catholic Diocese of Providence.

Read more: Providence Journal

3/10/11: Democrat Melo introduces Chafee's first RI budget bill

The first big political question surrounding independent Governor Chafee's first budget: who would introduce it? That question was answered Wednesday when new House Finance Committee Chairman Helio Melo, D-East Providence, introduced the bill on Chafee's behalf so that his committee could begin hearings on the 285-page bill perhaps as early as next week.

Read more: Providence Journal

3/10/11: R.I. mayors expecting more aid praise Chafee but he has critics
Mayoral reaction to Governor Chafee’s proposed budget varied predictably Wednesday, with the chief executives who got more state aid praising the package and those who lost fiscal ground less impressed.

Read more: Providence Journal

3/9/11: In budget address, R.I. Governor Chafee proposes new taxes

As he forewarned on the day he launched his campaign for the state’s top office a year ago, Governor Chafee is proposing $157 million in new taxes on a wide swath of items, including clothing, home heating oil and the price of admission to movies, plays, concerts and college basketball at The Dunk.

Read more: Providence Journal

3/9/11: First look at Chafee budget draws tempered response

On the whole, the reactions to Governor Chafee’s first budget address came across as measured.

Read more: Providence Journal

3/9/11: State to pursue toll creation to pay for highway repairs

Governor Chafee’s budget for next year takes the first step toward instituting tolls on the state’s highways, and it seeks to end a long-standing reliance on borrowing that is eroding the Department of Transportation’s ability to perform basic functions such as plowing snow.

Read more: Providence Journal

3/8/11: Taxes, pensions, top Chafee’s list

Governor Chafee began the sales pitch for his first multibillion state budget proposal in a series of private meetings with House and Senate Leaders on Monday, the day before he airs it publicly. And as he did so, more and more details emerged.

Read more: Providence Journal

3/7/11: Clues emerge to RI Governor Chafee’s first budget proposal

In the days leading up to the rollout of their first budget proposal, Governor Chafee’s advisers have given serious consideration to a new two-tiered sales tax and the first increase in public employee contributions to their pensions since the mid-1990s.

Read more: Providence Journal

3/7/11: New school funding formula anxiously awaited

It seems as if everyone is worried about a historic new law that changes the way the state hands out hundreds of millions of dollars for local schools, scheduled to launch July 1.

Read more: Providence Journal