R.I. Governor McKee won't sign the $14.3b state budget, citing tax hikes. But he won't veto it, either.

Boston Globe

4 days ago

He noted the budget includes a 2-cent increase in the gas tax, an increase in the real estate conveyance tax beyond what he had proposed, and new sales tax on parking. 'We could have done things that would've been better for the taxpayers and the people who live in the state of Rhode Island without raising that cost,' he said.
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McKee's press conference came four days after the General Assembly wrapped up the 2025
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And it came as McKee is gearing up for
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In a letter Wednesday, McKee wrote to Shekarchi, a Warwick Democrat, saying, 'I cannot support the budget act because the proposed tax and fee increases would make it even harder for Rhode Island families to afford everyday life — at a time when inflation is still top of mind and affordability remains their top concern."
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McKee said that if he had line-item veto authority, he would have eliminated taxes and fee hikes in the budget. 'Lacking that authority, I am allowing this bill to become law without my signature as a clear and deliberate statement of my strong opposition to the cost increases it imposes on Rhode Islanders,' he wrote.
Speaking to reporters, McKee acknowledged his veto would likely have been overridden if he had sent the budget back to the Democratic-controlled Assembly, which passed the budget with veto-proof majorities.
Shekarchi has said McKee's proposed budget left big holes to fill because some ideas were unlikely to generate savings or produce immediate revenue.
For example, McKee proposed closing the state's minimum security prison, but his administration later scrapped that idea. And Shekarchi said McKee's proposed 10 percent tax on digital advertising revenues was too speculative, noting only Maryland has tried that and it's facing lawsuits.
But McKee said the May revenue estimating conference showed the state had $67 million more than expected, and he said the Assembly could have used that money to close any budget gaps without raising more taxes.
He objected to the 2-cent increase on the gas tax, saying Rhode Islanders already pay more at the pump than drivers in Massachusetts and Connecticut.
He objected to a new $48 annual fee on health insurers for every person they cover, saying that would mean $200 more each year for a family of four.
And he objected to increasing the real estate conveyance tax on sales under $800,000, saying that would add more than $1,300 in fees on the sale of a median-price home.
During the legislative session, advocates had called for Rhode Island to
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When asked about taxing the rich, McKee said, " There may come a time when there's a reason to to support tax increases, but this is not the time." He said, 'Let's see what happens in Washington. Let's see what comes our way. And there may be a time that you need to discuss that.'
While the governor said the Legislature could have passed a balanced budget without raising taxes, he did not lay out exactly which spending items he would have cut.
'Budgets are about choices,' said Brian Daniels, McKee's state budget director. 'We're not going to go line-by-line ... because the ship has sailed.'
Daniels did point to an increase in funding for the
Typically, the budget is negotiated behind closed doors between the House speaker, Senate president and governor before the amended version comes out of the House Finance Committee.
But McKee suggested he was cut out of those budget talks at a certain point, telling reporters he did not find out about changes – including the gas tax increase – until the amended budget was made public by House leaders on June 10.
'The issues I'm talking about today were not privy to me until they were privy to you,' McKee said.
Edward Fitzpatrick can be reached at