R.I. House approves $15.2 billion state budget that phases in millionaires tax

PROVIDENCE — The Rhode Island House of Representatives on Friday voted for a record $15.2 billion state budget after beating back attempts to halt a millionaires tax and to apply the scrutiny of a new inspector general’s office to the legislature as well as the executive branch.

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The House voted 65 to 10, along party lines, to approve the budget for the for the 2027 fiscal year. The Senate is expected to approve the budget next week as the General Assembly aims to wrap up the 2026 legislative session by June 12.

The sharpest debate focused on the millionaires tax that would raise the tax rate on personal income of more than $1 million over three years — going to 6.99 percent for tax year 2027, 7.99 percent in 2028, and 8.99 percent for 2029. It is expected to generate an estimated $22.4 million in 2027 and $142 million by 2030.

Representative Richard Fascia, a Johnston Republican, predicted the millionaires tax will accomplish “nothing, zero, nada” but that it will “negatively affect our children and grandchildren.”

Fascia argued that the millionaires tax will punish people who have worked hard to be successful, and he said those “talented entrepreneurs most affected by this bill can easily move to areas more tax friendly.”

Fascia warned that the new tax will be passed on to lower income Rhode Islanders. “Millionaires do not pay taxes — their customers and clients pay taxes,” he said. “As tax liability goes up, they’ll simply increase prices.” He said, “The real problem is overspending.”

But Representative Teresa A. Tanzi, a South Kingstown Democrat, said the Trump administration and congressional Republicans have passed legislation that will devastate Rhode Island’s budget in the coming years. And she said the millionaires tax is needed to ensure “that we would still be able to provide the bare minimum for individuals who need it the most in our state.”

Right now, one in three children in Rhode Island “are going hungry,” considered “food insecure,” Tanzi said.

“I urge my colleagues to support their constituents — the 80 percent, not the 1 percent, not the millionaires,” she said. “I’m shocked that some of the people who represent the poorest communities in our state are standing up and shilling for the billionaires. It blows my mind.”

Representative Evan P. Shanley, a Warwick Democrat, said the millionaires tax is not a penalty meant to punish success. “It is an investment in the community that, in some measure, fosters the conditions for your business and your family to grow,” he said.

Shanley said the income gap between the richest and the majority of the state’s population is growing.

“That creates instability, because you end up with the majority of the population that has nothing to lose, despite the fact that they are working full-time and playing by the rules,” he said. “At the end of the day, the wealthiest among us have the most to lose if our society collapses.”

This marks the first budget passed under new House Speaker Christopher R. Blazejewski, a Providence Democrat who took the gavel on May 7 after K. Joseph Shekarchi stepped down to apply for a state Supreme Court vacancy.

“This budget is an effort to address the concerns and struggles of everyday Rhode Islanders who need good schools, who need access to healthcare, who need to be able to pay their bills and who need to know that their government is honest and effective,” Blazejewski said in a statement. “It provides relief today while being fiscally responsible and putting our state in a better position in the years to come.”

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House Minority Leader Michael W. Chippendale, a Foster Republican, voted against the budget, saying the $15.2 billion total is more than triple the 2000 state budget total of $4.5 billion. In the same time frame, wages have only grown by 25 to 30 percent, he said.

“What those numbers tell me is that it’s not something that can be sustained,” Chippendale said. “We can’t spend beyond our limits and expect that to be sustained.”

Chippendale noted that last year Rhode Island enacted the so-called “Taylor Swift tax‚“ charging an extra $2.50 for every $500 of the assessed value in excess of $1 million on non-owner-occupied houses, and now it’s passing a millionaires tax.

”We feel that these are the wrong steps,” he said. “We should not be looking for where can we get more money.”

But Chippendale and other Republicans praised Blazejewski for pushing for the creation of an independent inspector general’s office soon after he became speaker.

Blazejewski, who first proposed an inspector general in 2015, has said now is the time to create the office because the Trump administration is cutting funds for Rhode Island and the public has witnessed a series of “high-profile state failures” including the Washington Bridge crisis, the recent partial collapse of an on-ramp over Amtrak lines, and the botched rollout of a $99 million payroll system.

On Friday, Representative Charlene M. Lima, a Cranston Democrat, and Republicans called for allowing the new inspector general to scrutinize the legislature and the judiciary, in addition to the executive branch.

Lima praised Blazejewski, saying, “You have done what no other speaker, no governor has ever had the courage to do — you put the good of the public over political expediency.”

She argued that the House should not tarnish that accomplishment by preventing the inspector general from investigating the legislature. She said the public suspects there’s “something really sinister going on,” although that’s not the case. She urged the House to make that change and to let the courts decide if it’s constitutional.

But House Majority Leader Katherine S. Kazarian, an East Providence Democrat, noted that in 2004 voters overwhelmingly approved a separation of powers amendment to the state Constitution. “Separation of powers basically just means each of their three branches of government need to stay in their own lane,” she said.

The House rejected Lima’s proposed amendment by a vote of 16 to 56.

The budget also returns the Central Falls school district to control.

“For more than 30 years, the children, families, and residents of Central Falls have lived under state control of our schools,” said Representative Joshua J. Giraldo, a Central Falls Democrat. “It’s been the longest state takeover in United States industry. This budget recognizes something that many of us know to be true — that the people of Central Falls are ready and deserve to lead their own schools.”

Secretary of State Gregg M. Amore hailed the budget’s inclusion of a $45 million bond question for the construction of a Rhode Island State History Center.

Amore, an East Providence Democrat, said it was fitting that this decision comes weeks ahead of the 250th anniversary of the signing of the Declaration of Independence. “Rhode Island is fortunate to have its own magnificent copies of that very document we’re celebrating as part of America’s semiquincentennial – and now, we are one step closer to a permanent home for their display and preservation,” he said.

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