Highlights of Governor’s Proposed FY2022 Budget

Last month, Governor McKee released his FY2022 proposed budget. The "budget” totals $11.17 billion, a decrease of $1.56 billion over the enacted FY2021 budget. The Institute analyzed the budget, taking a look at proposals that are important to the fiscal health of the state and its residents. Here are some key points from the perspective of what will impact the fiscal health of the state and Rhode Islanders with low- or modest-incomes.

RI Works
  • The budget proposes changes to the RI Works law that would: provide the $100 clothing allowance to all children in the family, including children birth to age 4; exclude earned income for 6 months after a parent starts a job; and allow an 18-year-old to be eligible for cash assistance as long as s/he is attending high school or other educational program.
Child Care Assistance Program
  • The budget includes $6M in federal funds to increase reimbursement rates to providers. While this funding is an increase over pre-pandemic rates, it would mean a significant cut from pandemic rates being paid since March 2020. The proposal also includes a pilot program allowing a parent to access CCAP to enroll or maintain enrollment in a public higher education institution.
  • The budget does not include any changes to the rates for broad-based taxes, including the personal income tax, the corporate income tax, or the sales tax. There are no proposals to change alcohol, tobacco or hotel taxes. 
  • The budget proposes no change to the phasing out of the car tax, spending $139.7M from general revenue to reimburse local governments for lost revenue. 
  • The budget includes $65M from the bond passed in March 2021 plus another $20M from bonds passed in 2012 and 2016 $85.1M for affordable housing, including rehabilitation of existing buildings and new construction for FY2021-FY2025.
  • The budget includes $1.5M in funds ($660,000 general revenue) to finance a rate increase for home stabilization services provided to individuals enrolled in Medicaid. Services include finding and applying for housing or rental assistance, transitioning into or maintaining housing, and preventing evictions.
Health Care
  • The budget increases the maintenance of needs allowance (MNA) from 100% FPL to three times the SSI standard (from $12,880 to $28,584/year) for Medicaid-eligible individuals who are receiving long term services and supports in their homes. Income above the MNA is contributed by the individual for cost of services received.