Governor Dan McKee

011823/Ernest A. Brown photo/ Governor Dan McKee delivers his State of the State address in the House chamber at the Rhode Island Statehouse Tuesday night, rolling out a nearly $100 million tax relief plan to support Rhode Island families and businesses as part of his FY2024 budget proposal.

PROVIDENCE – Gov. Daniel McKee pledged to include broad tax relief in his 2024 budget and committed to quickly releasing a plan to boost education in his State of the State address Tuesday evening.

“As I look out at this audience tonight, I am more optimistic than ever about Rhode Island’s future,” he said. “And I hope you feel the same way too.”

McKee outlined five components of a nearly $100 million tax relief plan that will be included in his 2024 budget proposal. The plan builds on tax relief efforts implemented last year, including eliminating the car tax and the tax on military pensions, and issuing child tax rebate checks to over 40,000 parents.

The first component of McKee’s 2024 plan is incrementally reducing the state’s sales tax until it reaches the Massachusetts rate of 6.25%. McKee proposed starting this year with a drop from 7% to 6.85%, which he estimated will save $35 million.

Senate Minority Leader Jessica de la Cruz (R-Burrillville), in her rebuttal to the Governor’s address, proposed pushing the sales tax down to 5% “so we can do even better than Massachusetts.”

“Why does Rhode Island continue to be so timid and lackadaisical when it comes to tax policy?” She said. “We cannot and will not prosper without bold tax policy reform.”

McKee also proposed halting the three-cent gas tax increase, which is scheduled by law to take place in July. Stopping the increase is a more moderate action than temporarily eliminating the 35 cents per gallon tax altogether, which was proposed by Senate Republicans early last year when gas prices began to rise sharply nationwide. De la Cruz pointed this out in her rebuttal as well, calling McKee’s proposal “too little, too late.”

First Lady Susan McKee’s priority to “Keep Rhody Litter Free” also received attention in the speech, with McKee announcing the end of the litter tax levied on local businesses and a plan to replace it with a dedicated line item in his 2024 budget.

“Here’s the bottom line: The budget I’ll put forward this week will continue providing economic relief for Rhode Island families, invest in Rhode Island’s future and continue making progress toward our Rhode Island 2030 goals,” McKee said.

On education, McKee began with a story about “a painter who sets out to paint the perfect sunrise” but never does because he always thinks the next day’s sunrise will be better.

“When it comes to fixing Rhode Island’s education system, we can’t be like that painter,” McKee said. “Instead of waiting for what we think might be a better day in the future, we must stay the course, double down our efforts and tackle the challenges facing Rhode Island’s education system today.”

In addition to adding $57 million to his proposed budget for K-12 education, McKee pledged to release a plan within his first 100 days on how to reach “Massachusetts education levels” by 2030. Rhode Island adopted the same statewide standardized test as Massachusetts during the 2017-2018 school year but the percentage of Rhode Island students meeting or exceeding expectations on the exam has consistently fallen below that of their peers in the Bay State.

This past year, just over 30% of Rhode Island students who took the RICAS exam were meeting or exceeding expectations on the English Language Arts exam, and about 27% of students were exceeding or meeting expectations in math, according to the most recent state data.

De la Cruz cited these statistics in her rebuttal while promising that Republicans will submit an “ambitious legislative package” on education, the center of which will be allowing parents more choice in what schools their children attend.

“Republicans have repeatedly affirmed that access to a quality education is a civil rights issue of our time,” de la Cruz said. “We can no longer allow a child’s zip code or a family’s wealth to determine the quality of a child’s education. It’s critical that we as parents and lawmakers be the strongest advocates for our children’s education.”

McKee also announced support for making “a targeted modification to the funding formula to improve outcomes and support students with greater needs.” The current funding formula, which has not been substantially changed since its passage a decade ago, uses enrollment as a key factor in determining how much state aid each district gets. For the last three years, the budget has “held communities harmless” for enrollment drops during the pandemic, McKee said, but statewide, enrollment has declined by about 5,700 students since then.

“We know that the pandemic had a dramatic impact on our children’s education, and while we’re glad that our kids got back into the classroom as quickly and as safely as possible, we know that there are years of recovery ahead,” he said.

Changing the education formula has gained some traction in the General Assembly in recent years. A special legislative task force to study the formula, chaired by Sen. Ryan Pearson (D-Cumberland), released a report in January of 2020 with 15 recommendations, but no substantial amendment to the formula has passed.

Before signing off, McKee reprised his slogan from the campaign trail.

“We have momentum and if we keep up the tremendous determination we displayed during the pandemic, we will be ready to embrace the significant opportunity ahead.”

Follow Stella Lorence on Twitter @slorence3.

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