Governor Raimondo released her first budget last week. We have highlighted five areas that are important to the fiscal health of the state and its residents.
Making work pay
The Governor proposes to expand the state’s Earned Income Tax Credit which would allow working families to keep more of their paycheck. And while not a budget item, the Governor supports increasing the minimum wage to $10.10. These two proposals would help make work pay for tens of thousands of Rhode Islanders struggling to get by in our low-wage service economy.
A skilled workforce
Expanding pre- and full-day kindergarten, creating new pathways for high-school students to post-secondary education and employment, and providing funds to rehabilitate schools are welcome proposals. The budget also maintains state investments to improve the skills of current workers to better meet employer needs, though there are no new funds to open the door for hundreds of adults on waiting lists for English language services and basic foundational skills training.
Holding on to our health exchange
Maintaining HealthSource RI is good news for the small businesses and more than 30,000 subscribers who purchase health insurance through our health insurance exchange. Many subscribers get federal tax credits to help make premiums affordable. HealthSource RI provides “one stop shopping” for affordable coverage, whether that’s Medicaid or private insurance.
Medicaid on the move
Of concern is that the budget proposes to cut $180 million in state and federal Medicaid spending next year. While the budget does not include cuts to eligibility or elimination of benefits, the removal of nine percent of Medicaid spending from the state’s health care system is significant. The Economic Progress Institute is pleased to be part of the workgroup charged with “Reinventing Medicaid”.
Evaluating tax incentives
Governor Raimondo has been clear that growing good jobs needs to be our number one priority and we agree. The budget proposes to refinance state debt and use the over $60 million gained to create a host of economic development incentives, including new tax credits and incentives for capital investment. Our state has a long history of relying heavily on tax breaks and incentives as a primary economic strategy but failing to evaluate those policies to determine whether we are getting a bang for our buck. The budget instructs the Executive Office of Commerce to establish reporting requirements for all tax credits and incentives. We trust Governor Raimondo will put in place strong accountability and transparency measures so that policymakers and the public can carefully monitor whether the incentives are in fact growing well-paying jobs at a reasonable cost.
CLICK HERE TO READ THE SUMMARY.