What's in RI's proposed $14.3B budget? Help for primary care, RIPTA funds and 'Taylor Swift tax'
The proposed tax and spending plan for the year starting July 1 would raise Medicaid reimbursement rates to inject, including federal dollars, $45 million into primary care, $38 million into hospitals and $12 million into nursing homes. Funding for primary care practices would come in part from a new health insurance fee estimated to generate $30 million per year.
Although it spares the well-heeled an income tax hike, the House budget resurrects a tax proposed a decade ago on second homes worth more than $1 million, branded the "Taylor Swift tax" after the Watch Hill vacation home of the famous pop star. Proceeds would go to fund the state's low-income housing tax credit.
The budget would inject $15 million into the Rhode Island Public Transit Authority, the same amount of money lawmakers added to the statewide bus system a year ago but less than half of the $33 million the agency says it needs to plug a budget hole and avoid service cuts.
The extra RIPTA funding will come from a 3-cent-per-gallon hike in the gas tax slated to go into effect July 1 and tweaks to the formula that distributes transportation funds. A 1-cent-per-gallon increase in the gas tax is already set to go into effect in July.
The budget, a rewrite of the $14.2 billion tax and spending plan Gov. Dan McKee proposed in January, was quickly passed on an 11-3 vote by the House Finance Committee on June 10, setting it up for a vote before the full House on June 17.
"All our colleagues have heard, the Senate has heard and we decided that we needed to take action now," House Speaker K. Joseph Shekarchi told reporters about the money for primary care. "We've heard that our reimbursement rates are low, and that's the primary cause of the health care shortage. We wanted to address that immediately."
Senate President Valarie Lawson in an email applauded budget investments in healthcare, RIPTA and child care, suggesting it won't have much trouble passing that chamber.
As expected, the House abandoned several of McKee's proposals, including a 50-cent hike in the cigarette tax, buying an office building from Citizens Bank in East Providence and a tax on digital advertising that the governor hoped would pull in $9.5 million next year and $23.5 million annually by 2030.
But the House budget agreed with the governor on other proposals, including a new fee on electric vehicles and charging the state's 5% hotel tax to short-term rentals of whole homes on sites such as Airbnb.
Other budget highlights include:
Truck tolls. The House accepted McKee's plan to turn on the legal-again tolls on tractor trailers in the first half of 2026 and collect an estimated $10 million in state revenue.
Washington Bridge: $22 million in state dollars to match federal funds to build a new westbound Washington Bridge.
Education: The House proposal would spend $16.5 million more on education than McKee proposed and $59 million more than the current-year budget.
Conveyance tax: A 63% increase in the real estate conveyance tax on all home purchases, which doubles for the portion of a sale over $800,000 is proposed with proceeds going to services for homeless Rhode Islanders. The tax increase is projected to raise $8.4 million next year.
Airbnb: Extends the 5% state hotel tax to whole-house rentals, something lawmakers rejected last year but McKee's budget expects will generate $4.7 million per year, with a part of the collections also going to homeless services.
DMV: A $1 hike in the Division of Motor Vehicles "technology fee" to $3.50 per transaction.
Superman Building: The House budget included a provision, already passed as a standalone bill in the Senate, that would exempt the owner of the vacant Industrial Trust Tower in Providence from sales tax on construction materials while claiming a maximum in other state incentives.
Parking: The state's 7% sales tax would be charged to parking, generating $3.2 million per year.
Nicotine pouches: The tax applied to the wholesale cost of tobacco products would be expanded to synthetic nicotine pouches such as Zyn, generating $12 million per year.
Vacation home tax: The "Taylor Swift Tax" would not go into effect until the fiscal year that starts July 1, 2026 and no estimate was provided of how much it would eventually raise.
Longtime advocates of increasing taxes on Rhode Island's highest-earning residents hoped the budget pressure facing the state this year would convince top lawmakers that the time was now right to do it. They proposed a 3% surcharge on income above $625,000, which was estimated to generate $190 million in annual revenue.
And as lawmakers waited for the final details of the budget to be hammered out on June 10, the Working Families Party camped outside the State House with a box truck showing illuminated messages of support for a tax hike, such as, "Save Rhode Island. Tax the Rich."
But Shekarchi told reporters that lawmakers decided against a tax hike, at least until the state knows whether Congress is going to pass a tax cut bill that could slash Medicaid funding and shift more costs to states.
"We don't know what's going to happen in Washington," 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 issue when we have more clarity from Washington."
But Working Families Political Director Zack Mezera said what's happening in Washington is even more reason to make the "1% pay their fair share," not an excuse.
'Today's budget shows that state leadership would rather raise gas taxes for working families than increase taxes on millionaires," Mezera wrote in a news release. "As President Trump and his allies advance destructive cuts that could cause over 240,000 Rhode Islanders to lose Medicaid and hundreds of educators and care workers to lose their jobs, we need bold action to raise revenue now – otherwise working people and small businesses will be paying the price for years."
With $15 million from the budget to fill a $33 million projected shortfall, it looks as though RIPTA is going to need to scale back what it does, but Shekarchi said it would not necessarily mean large layoffs or route cuts.
"I think they need to look at everything," he said. "Maybe it's smaller buses, maybe it's addressing the ride schedule, maybe it's a slight fare increase, maybe it's looking at management positions. That's why we mandated, when we gave them $15 million last year, they do an efficiency study and find out the solutions."
Despite the prospect of having to make painful cuts this summer, RIPTA CEO Christopher Durand said the bus system is "grateful" for the additional permanent state revenue.
"The agency has long needed a consistent funding stream to allow us to better support getting Rhode Islanders to work, school and healthcare," he said in an email. "The last time the agency saw a permanent change in its funding structure was over ten years ago; this is a needed improvement, which we are thankful for."
This article originally appeared on The Providence Journal: RI's proposed $14.3B budget: Primary care; RIPTA; 'Taylor Swift tax'
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Business Insider
14 minutes ago
- Business Insider
An anti-DEI investment firm is postponing its Tesla ETF, saying Elon Musk has 'gone too far' by launching a political party
Elon Musk's decision to set up a new political party is already proving a headache for Tesla. James Fishback, CEO of investment firm Azoria, said on Sunday that the firm — which has stated its opposition to DEI targets and "woke" companies — will postpone its planned public listing of a Tesla ETF, which would invest in the EV giant's shares and options. In a post on X, Fishback, who previously worked as an outside advisor to DOGE, said that the billionaire had "gone too far" with his latest plan to set up the "America Party" and take on both Republicans and Democrats. Fishback, who included a letter to Tesla Chair Robyn Denholm in his X post, added that the new party "creates a conflict" with Musk's responsibilities as CEO of Tesla and "actively undermines" the company's mission. "I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO," said Fishback. Tesla's share price was down as much as 7% premarket on Monday, as investors expressed unease over Musk's decision to dive back into politics. Wedbush Securities analyst Dan Ives wrote in a Sunday note that investors were feeling a "sense of exhaustion" over Musk's new political party. The longtime Tesla bear said that Musk, who told investors in April that he would step back from his role in the Trump administration to focus on the beleaguered EV maker, was going in "exactly the opposition direction" to what Tesla shareholders wanted. Ives also warned that the billionaire's extremely public falling out with Trump could create additional hurdles for Tesla in the future. Other investors expressed similar frustrations. "Waymo has solved autonomous driving. Meanwhile, Elon is starting a new political party," wrote Tesla investor and regular Musk critic Ross Gerber on X. An outspoken supporter of President Donald Trump, Fishback told Business Insider in January he had served as an outside advisor to DOGE, and proposed the idea of a "DOGE dividend" earlier this year. The investment banker, who has said that he owns Tesla stock and that the EV giant is Azoria's largest position, also accused Musk of being fixated on "sabotaging President Trump" and said the Tesla CEO was an "absolute failure" at DOGE in a series of posts on X.


Associated Press
24 minutes ago
- Associated Press
Molina Healthcare Announces Preliminary Second Quarter Financial Results and Updates Fiscal Year 2025 Earnings Per Share Guidance
LONG BEACH, Calif.--(BUSINESS WIRE)--Jul 7, 2025-- Molina Healthcare, Inc. (NYSE: MOH) today announced preliminary financial results for the second quarter of 2025 and updated its full year 2025 adjusted earnings per share guidance. The Company's announcement of preliminary results was driven by recent market dynamics and off-cycle disclosures from others in the managed health care sector. The Company now expects its second quarter 2025 adjusted earnings to be approximately $5.50 per share (1), which is modestly below its prior expectations. This preliminary result reflects medical cost pressures in all three lines of business. The Company expects these medical cost pressures to continue into the second half of the year. As a result, the Company now expects its full year 2025 adjusted earnings to be in the range of $21.50 to $22.50 per share (1), reflecting a consolidated pre-tax margin of just under 4%, the low-end of its long-term guidance range. 'The short-term earnings pressure we are experiencing results from what we believe to be a temporary dislocation between premium rates and medical cost trend which has recently accelerated,' said Joseph Zubretsky, President and Chief Executive Officer. 'As we are still performing near our long-term target ranges, nothing, including the potential impacts of the budget bill, has changed our outlook for the long-term performance of the business.' As previously announced, the Company expects to report its full second quarter results after the market closes on Wednesday, July 23, 2025, and will host a conference call and webcast to discuss the earnings release on Thursday, July 24, 2025, at 8:00 a.m. Eastern Time. About Molina Healthcare Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. For more information about Molina Healthcare, please visit Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements. The Company intends such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements contained in this press release include, but are not limited to, statements regarding the Company's 2025 preliminary second quarter financial results, our 2025 guidance and our long-term performance. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings 'Forward-Looking Statements,' and 'Risk Factors,' in the Company's Annual Report on Form 10‑K for the year ended December 31, 2024, which is on file with the U.S. Securities and Exchange Commission (the 'SEC'), and in the Company's other filings with the SEC, including its Quarterly Report on Form 10-Q for the period ended March 31, 2025. These reports can be accessed under the investor relations tab of the Company's website or on the SEC's website at Given these risks and uncertainties, the Company can give no assurances that its forward-looking statements will prove to be accurate, or that any other results or developments projected or contemplated by its forward-looking statements will in fact occur, and the Company cautions investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company's judgment as of July 7, 2025, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations. Financial Disclosure Advisory All financial data in this press release is preliminary and represents the most current information available to the Company's management, as financial closing procedures for the quarter ended June 30, 2025 are not yet complete. These estimates are not a comprehensive statement of the Company's financial results for the quarter ended June 30, 2025 and actual results may differ from these estimates as a result of the completion of normal quarter-end accounting procedures and adjustments, including the preparation and review of the Company's financial statements for the quarter ended June 30, 2025 and the subsequent occurrence or identification of events prior to the formal issuance of our second quarter financial results. View source version on CONTACT: Investor Contact: Jeffrey Geyer,[email protected], 305-317-3012 Media Contact: Caroline Zubieta,[email protected], 562-951-1588 KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA INDUSTRY KEYWORD: GENERAL HEALTH OTHER HEALTH HEALTH MANAGED CARE HEALTH INSURANCE SOURCE: Molina Healthcare, Inc. Copyright Business Wire 2025. PUB: 07/07/2025 06:30 AM/DISC: 07/07/2025 06:31 AM


Axios
31 minutes ago
- Axios
Former state House Democratic leader eyes attorney general race
Bob Trammell, a lawyer and former leader of the Democrats in the state House of Representatives, is exploring a run for Georgia attorney general. Why it matters: Trammell is the first Democrat to officially consider the job. Though not a household name statewide, Trammell was enough of a political threat that national Republicans spent $1 million in 2020 to boot him from office. Driving the news: Trammell, who lives in Luthersville, filed paperwork Tuesday to begin the exploratory process and start raising money for a campaign. Catch up quick: Trammell took office in 2015 and was one of the last white rural Democrats elected to the Georgia General Assembly. Two years later, his colleagues chose him to serve as House minority leader. After several close elections, he was defeated in 2020 by first-time candidate and veteran David Jenkins, whose campaign was boosted by the Washington, D.C.-based Republican State Leadership Committee. What he's saying: Trammell told Axios that he's running now "to protect Georgians. That's the job." "At a time when Georgians are feeling the pressure of an erratic economy, subject to more sophisticated and complex frauds and scams, and feeling the erosion of their rights, Georgians need assurance that they have somebody fighting to protect them at all times."