The upper chamber of the Rhode Island General Assembly gave its seal approval to the state’s $14.3 billion fiscal 2026 Friday.
The Rhode Island Senate’s 32-4 vote was divided along party lines with all four Republican senators opposed. The Senate’s decision marks the penultimate hurdle for the state’s annual tax-and-spend plan. The last stop: Gov. Dan McKee’s desk for signature.
The Rhode Island House of Representatives approved a carbon copy of the spending plan in a 66-9 vote on Tuesday.
The $14.3 billion bottom line for fiscal 2026 falls $433 million shy of the record, $14.8 million final budget for the prior year. But, it’s $118 million higher than what McKee proposed in January.
Despite a series of new and increasing taxes and fees on motorists, nicotine pouch users and high-end second homeowners, the spending plan drew relatively little opposition in both chambers this year. Advocates praised the inclusion of extra health care funding for primary care providers, hospitals and nursing homes, though many acknowledge the extra money is not a panacea for the deep wounds of the state’s health care industry.
The cash-strapped Rhode Island Public Transit Authority (RIPTA) is also facing uncertainty, with $15 million of its $33.6 million shortfall plugged in the final budget, partly through a 2-cent-per gallon increase in state gas taxes. RIPTA CEO Chris Durand indicated the remaining shortfall may lead to layoffs of 90 of the agency’s staff, along with a 20% cut to service of buses other than the paratransit program.
In addition to a hike in gas taxes, the budget also increases the real estate conveyance tax, and adds a new property tax on second homes valued at over $1 million. Meanwhile, costs for traffic violations, short-term public parking and electric and hybrid vehicles are all going up under a set of new and increasing fees and tax changes.
Despite vocal and persistent advocacy, lawmakers opted to forgo a “millionaire’s tax” on top earners, though House Speaker K. Joseph Shekarchi indicated that might be considered if and when lawmakers reconvene for a special session in the fall — subject to fallout from the federal budget.
Other elements of interest in the spending plan include:
- Extending the state’s 5% hotel tax to short-term rentals, dividing up the revenue it generates between homelessness services, municipalities and local tourism districts
- Imposing an 80% wholesale tax to nicotine pouches (The tax already applies to other tobacco products.)
- Adding a new $4 per-person fee to monthly health insurance premiums to fund a state assessment of primary care and other health care needs
- Revising the state’s Rebuild Rhode Island tax credit program to allow the developers of the Superman building in downtown Providence to qualify for a sales tax exemption on construction materials
- Increasing state aid to local school districts for special education students and backfilling an inadvertent $12 million shortfall in state aid already required for students in poverty
- Adding $22 million in the long-term capital projects budget for the state’s share of costs in the Washington Bridge rebuild
McKee’s office did not immediately respond to questions Friday regarding when he will sign the budget.
Sen. Ryan Pearson, a Cumberland Democrat, was absent from the vote Friday.
Christopher Shea contributed to this story.
This story was originally published by the Rhode Island Current.
