New taxes, money for primary care: Here's what's in the revised $14.3 billion R.I. state budget

Boston Globe

a day ago

Reimbursement rates for primary care doctors
Shekarchi, a Warwick Democrat, said the House budget adds $45 million to boost Medicaid reimbursement rates for
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'We are facing a primary care crisis in the state of Rhode Island,' Shekarchi said, noting that his own doctor retired and he does not have a primary care physician. He said legislators had heard from constituents that they are struggling to find primary care doctors.
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'There is a real problem,' Shekarchi said. 'And we can't afford to just study it another year or two. We need to take action.'
The budget also provides an additional $38 million for hospitals and invests $12 million more in nursing homes. 'We recognized health care is important to our constituencies,' Shekarchi said.
'Taylor Swift' tax and other tax changes
The revised budget creates a new tax on non-owner occupied homes worth more than $1 million, which has been dubbed the 'Taylor Swift tax' in the past because the megastar singer owns a $20 million home in Westerly.
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The tax would be assessed at a rate of $2.50 for every $500 of the assessed value in excess of $1 million. The House has not yet calculated how much revenue the new tax will generate, but Shekarchi said the money will be committed to producing housing and addressing homelessness.
The budget also would increase the hotel tax from 1 percent to 2 percent and includes McKee's proposal to impose a 5 percent tax on short-term rentals of entire homes, which are common on platforms such as AirBnB. The budget also would increase the real estate conveyance tax.
The new budget bill also extends the 7 percent sales tax to parking, a request by Providence Mayor Brett Smiley. The budget does not include McKee's proposal to hike the cigarette tax by 50 cents to $5 per pack.
No new income tax on the rich
The budget would not raise incomes taxes on the rich.
With the Trump administration slashing key programs and the state facing a budget deficit, advocates were calling for lawmakers to
As the
— Edward Fitzpatrick (@FitzProv)
Advocates cited the example of Massachusetts, which has generated $2.6 billion in revenue this fiscal year with a voter-approved millionaires tax. Opponents warned the tax hike would hamper Rhode Island's ability to compete for businesses, hurt pass-through corporations, and drive the rich to tax-friendly states.
Shekarchi said, " We don't know what changes are going to be made in the federal tax code. We felt comfortable enough to do the non-owner-occupied taxes over a million dollars at this time, and we will revisit that (tax the rich) issue when we have more clarity from Washington."
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Gas tax increased to fuel RIPTA
The budget would raise the state gas tax by 2 cents per gallon to fund the Rhode Island Public Transit Authority.
Shekarchi said this is not a one-time infusion of revenue such as the $15 million in federal COVID aid the legislature provided RIPTA last year
Shekarchi said public transportation is necessary for many Rhode Islanders, and he said the budget ensures the agency will not cut the
Transit
Tax relief for Superman
The amended budget bill incorporates the sales tax relief requested by the owners of the
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Washington Bridge money
Lawmakers plan to reallocate $22 million in Rhode Island capital funds toward the Washington Bridge, now that McKee has laid out a
Truck tolls
Despite no public plan to turn them back on, the budget includes $10 million from resuming truck tolls, which had been halted after a
In December, a federal appeals court ruled that the state can resume the tolls as long as it removes caps for in-state trucks. The tolls had been generating $40 million a year before they were stopped. Shekarchi said the Department of Transportation has not provided a date for reinstating the tolls.
No new tax on digital advertising
McKee proposed a new 10 percent tax on digital advertising revenues in the state, which would only apply to media companies with more than $1 billion in global revenues. But the administration quickly reversed course and said the proposal would exclude news media outlets. And the budget includes no revenue from that proposal.
'Honestly, it was just too speculative,' Shekarchi said. 'There's only one state in the union that's doing that. That's Maryland, and they're currently in two lawsuits. I did not feel comfortable putting that into the budget.'
No Citizens Bank building
The budget provided no money for McKee's proposal to purchase and renovate a 210,000-square-foot building from Citizens Bank in East Providence and move 800 state employees there.
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Education and child care
Lawmakers increased funding to special education in the state's funding formula, which Majority Leader Christopher R. Blazejewski said would result in $16.5 million more for school districts compared to McKee's proposal. The total amount of education spending for public school districts and charter schools is $1.3 billion.
The revised budget also makes a change to how child care is funded, separating infant and toddler rates so that child-care centers can get a 20 percent higher subsidy for infant rooms, which are the most expensive to run because of mandatory teacher-to-infant ratios. The high costs have been
Electric vehicle and hybrid car owners zapped with higher fees
McKee had proposed to increase registration fees for electric vehicles, and lawmakers opted to raise those fees even higher. The electric vehicle registration fee would be $200 per year, plug-in hybrid registrations would cost $100, and hybrid vehicles would cost $50 a year.
Edward Fitzpatrick can be reached at