News Summary
Rhode Island House Democrats have introduced a $14.3 billion state budget focusing on healthcare funding and transit services, without increasing taxes on the wealthy. The budget allocates $45 million for Medicaid reimbursement rates for primary care, $38 million for hospitals, and $12 million for nursing homes. A ‘Taylor Swift tax’ on second homes valued over $1 million has been proposed to diversify revenue. Although the budget aims to address healthcare shortages, critics argue it does not impose sufficient taxes on high-income earners. A vote on the budget is scheduled for June 17, 2021.
Rhode Island House Democrats have proposed a comprehensive state budget amounting to $14.3 billion, which is set to focus heavily on enhancing health care funding and transit services. This proposal aims to bolster the financial viability of primary care doctors, hospitals, and nursing homes, while strategically avoiding any increase in income taxes on the wealthiest individuals in the state.
The new budget is scheduled to take effect on July 1, 2021. As part of the proposal, $45 million is earmarked to raise Medicaid reimbursement rates specifically for primary care practices. Additionally, $38 million is dedicated to hospitals, while nursing homes will receive $12 million. The funding strategy also introduces a new health insurance fee, which is expected to generate $30 million annually, enhancing financial support for primary care practices.
Another significant aspect of the proposed budget is the reintroduction of a tax on second homes valued at over $1 million, popularly referred to as the “Taylor Swift tax.” This measure is part of the broader effort to diversify the state’s revenue sources without imposing a heavy burden on high-income earners.
In terms of public transportation, the proposal includes an additional $15 million for the Rhode Island Public Transit Authority (RIPTA). To fund this, a 3-cent-per-gallon increase in the gas tax is set to be implemented from July 1, 2021. This measure comes alongside a previously approved 1-cent-per-gallon increase in gas taxes. Although the budget addresses a $33 million projected shortfall for RIPTA, the allocated amount falls short of the funding needed to maintain current services.
The recent budget proposal is a revision of Governor Dan McKee’s earlier budget plan and was endorsed by the House Finance Committee with an 11-3 vote on June 10, 2021. Legislative members have opted to remove several of McKee’s proposals, including a 50-cent increase in the cigarette tax and a new tax on digital advertising. However, they did retain elements of the governor’s previous plans, such as a fee on electric vehicles and the extension of the state’s 5% hotel tax to short-term home rentals.
While the Democrats’ budget aims to alleviate some of the financial strains in the healthcare system, it has faced criticism from various advocates who campaigned for a 3% surcharge on income exceeding $625,000. This surcharge was projected to generate $190 million but did not gain sufficient legislative support.
House Speaker K. Joseph Shekarchi has highlighted the necessity for immediate action to rectify low reimbursement rates which contribute to ongoing healthcare shortages. Senate President Valarie Lawson has also expressed her backing for the healthcare investments depicted in the proposed budget.
Opponents of the plan, such as the Working Families Party, argue against the lack of increased taxes on the wealthy, positing that such taxes are a fairer alternative to the gas tax increase that would affect working families. Advocates for healthcare reform have welcomed the budget’s commitment to addressing staffing shortages in nursing homes, including agreements to ease penalties and set new staffing requirements.
The budget also reflects a future goal to raise payments to primary care providers to 100% of Medicare rates by October 1, 2025, illustrating long-term plans for improving healthcare accessibility and quality in the state.
The proposed budget is set to be voted on by the full House on June 17, 2021. As Rhode Island moves forward with this financial planning, the implications of the budget’s components will be closely monitored by both supporters and critics alike.
Deeper Dive: News & Info About This Topic
- Providence Journal: Rhode Island Medical Community Cheers Proposed $14.3 Billion Budget
- WPRI: Taxes and Fees Going Up in $14.3 Billion RI Budget
- Providence Journal: RI’s Proposed $14.3B Budget Focuses on Primary Care
- Boston Globe: RI House Budget Includes Taylor Swift Tax
- Rhode Island Current: 14 Things to Know About McKee’s Proposed Budget
- Wikipedia: Rhode Island
- Google Search: Rhode Island Budget
- Google Scholar: Rhode Island Budget
- Encyclopedia Britannica: Rhode Island
- Google News: Rhode Island Budget
Author: STAFF HERE PROVIDENCE WRITER
PROVIDENCE STAFF WRITER The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
