Highlights of the FY2018 Budget

OVERVIEW

The 2018 budget for the fiscal year beginning July 1, 2017 was signed into law by the Governor on August 3, after the Senate and House came to agreement on the budget and a bill to monitor the impact of the phase out of the Motor Vehicle Tax. From July 1 through August 3, the state operated under the terms and resources of the 2017 budget which was $304 million less than the proposed 2018 budget.

The 2018 budget totals $9.2 billion, including $3.8 billion in general revenue, $3.1 billion in federal funds and $2.1 billion in “other” funds (including the Unemployment Insurance Fund, the Temporary Disability Insurance (TDI) Fund and tuition and fees from CCRI, URI and RIC). See Figure 1.

Policymakers made modest investments in programs that help working families, including early learning, child care assistance, health care and raised the minimum wage over the next two years. The free bus pass program for seniors and people with disabilities was restored and the budget establishes the RI Promise Scholarship Program which provides two years of free tuition and fees for students at CCRI who enroll after graduating high school or attaining a high school equivalency diploma before age 19.

Significant tax changes include phasing out the motor vehicle tax with full elimination scheduled for 2024 (the state reimburses localities for the lost revenue), expanding the sales tax base by improving collection of sales and use tax from on-line and catalogue sales and increasing taxes on cigarettes and other tobacco products. Policymakers continued to provide funds for a variety of tax-related economic development initiatives (although one new initiative proposed by the Governor was rejected) and postponed the sun-setting of the historic tax credit for two years.

CLICK HERE TO READ OUR SUMMARY OF THE FY2018 BUDGET