Rhode Island

Rhode Island

Budget Links

FY2026 (enacted)
FY2026 (proposed)
FY2025 (enacted)
FY2024 (enacted)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)

Enacted Budget – Fiscal Year 2026

Rhode Island Governor Dan McKee allowed the state’s fiscal 2026 budget to become law without his signature. The budget provides for total spending from all funds of $14.34 billion, a 2.9 percent decrease compared to fiscal 2025 final expenditures. The budget includes general fund spending of $5.81 billion, a 3.8 percent annual increase, and federal aid spending of $5.1 billion, a 9.0 percent decrease compared to fiscal 2025 final levels. The budget is based on general fund revenue of $5.77 billion, reflecting a 2.5 percent increase over fiscal 2025, and a beginning balance (or free surplus) of $230 million. The fiscal 2026 budget projects an ending balance or free surplus of $1 million. The balance in the state’s rainy day fund (Budget Stabilization and Cash Reserve Account) is projected to increase, ending fiscal 2026 at $300 million. 

The enacted budget makes several tax policy changes, including expanding taxes on nicotine pouches, increasing the local hotel tax rate, and imposing a new tax on whole home short-term rentals. The budget includes several additional tax and fee increases objected to by the governor, including a state gas tax increase, a new fee on health insurers, an increase to the real estate conveyance tax, and several tax and fee increases related to parking, traffic fines, and DMV surcharges. The governor objected to these increases, saying in a letter, “the Budget Act imposes tax and fee increases on everyday Rhode Islanders at a time when they are not necessary.” Without line-item authority to reverse these tax and fee changes, the governor allowed the budget to take effect without signing it. On the spending side, the budget increases funding for primary care providers, hospitals and nursing homes. The budget also increases state aid to local school districts for special education and adds funds to backfill a shortfall in state aid already required for students living in poverty. The budget also adds long-term capital funding to cover the state’s share of costs in the Washington Bridge rebuild. Additionally, the spending plan partially addresses the projected shortfall in the state’s public transit system, the Rhode Island Public Transit Authority (RIPTA).

Enacted Budget Information
Fiscal Year 2026 Enacted Budget 

House Fiscal Report 

Governor’s Letter 

Press Clip

Proposed Budget - Fiscal Year 2026

On January 16, Rhode Island Governor Dan McKee submitted a budget recommendation for fiscal 2026. The budget calls for all funds spending of $14.22 billion in fiscal 2026, including general fund spending of $5.74 billion. This represents an all funds spending increase of 1.8 percent and a general fund spending increase of 2.6 percent compared to enacted fiscal 2025 levels. Federal fund expenditures for fiscal 2026 are projected at $5.09 billion, a 0.5 percent increase from enacted fiscal 2025. The governor’s budget is based on a general fund revenue estimate of $5.73 billion in fiscal 2026, reflecting 3.0 percent growth over the revised fiscal 2025 estimate. The fiscal 2026 estimate includes $267 million in recommended revenue actions. After a $178 million transfer to the state’s rainy day fund, the recommended budget projects a general fund ending balance of $0.8 million and a balance in the state’s rainy day fund of $296 million (about 5 percent of general fund spending, per the cap). The governor also recommends revisions to the fiscal 2025 enacted budget that would increase spending from all funds by $970 million, mostly driven by a $593 million increase in federal fund expenditures.

Proposed Budget Highlights 

The governor’s budget proposal invests in key priorities including workforce development, education, and health wellness, with a focus on improving education outcomes, raising incomes, and making residents healthier – the three pillars of the Rhode Island 2030 plan. The governor’s recommendation closes a projected deficit without raising broad-based taxes or cutting core services, instead creating savings through operational efficiencies, strategic cost-cutting efforts, and targeted new revenue streams. Highlights of the budget include:

Education and Workforce

• Increases funding for K-12 education aid, including raising per-pupil funding levels
• Provides funds for Learn365RI municipal grants to support high-quality, out-of-school programming
• Launches Ready to Build, a pre-apprenticeship pathway to building trades
• Build new Culinary and Hospitality Hub at a community college
• Invests in the creation of 1,000 new work-based learning opportunities
• Allocates funding for dual and concurrent enrollment programs
• Funds a 4 percent increase for public higher education institutions, including funding for services related to career readiness, placement and internships
• Funds two positions in the Office of Postsecondary Commissioner to form a federated integrated data system across state agencies to evaluate programs

Health and Wellness

• Recommends a review of primary care provider rates by the Office of the Health Insurance Commissioner
• Provides for loan repayment assistance for primary care providers and pediatricians
• Increases funding for senior support services
• Bans assault weapons and creates a sales tax exemption for gun safety goods
• Increases the per-pack cigarette tax by 50 cents

Government Efficiencies

• Recommends purchasing a large, commercial building to co-locate multiple state agencies and achieve long-term savings
• Closes a minimum security correctional facility and creates a new unit within the medium security facility instead
• Reduces agency contractor expenses, eliminates telephone landlines, and pursues other cost-cutting measures
• Adds four new positions in Medicaid to identify provider fraud

Infrastructure 

• Directs more funds to RhodeRestore to provide cities and towns with reliable funding to defray the costs of transportation projects and makes the program permanent
• Creates new, two-year registration fees for battery electric vehicles and plug-in hybrid vehicles to help offset declining gas tax revenue

Addressing Homelessness

• Provides funding from multiple sources for homelessness initiatives, including a new 5 percent hotel tax on whole-home short-term rentals (previously excluded) and an increase to the real estate conveyance tax for certain properties.

Proposed Budget Information
Fiscal Year 2026 Proposed Budget 

Executive Summary 

Budget Data Visualization 

Governor’s Press Release