CHALLENGES AHEAD
Federal cuts, election politics loom over 2026 RI legislative session
Katherine Gregg and Patrick Anderson
Providence Journal I USA TODAY NETWORK
What is the likelihood of a tax increase for Rhode Island’s highest earners – and possibly others – during the new legislative session that begins on Tuesday, Jan. 6? ●The official answer from legislative leaders: “Everything is on the table.” ● But unlike other years, the chances appear better in 2026 than they have been in the past, thanks to President Donald Trump, the GOP-led Congress, their “One Big Beautiful Bill” and a series of converging events.
At $101.3 million, the state’s projected budget hole is not as big as it has been in some years. But that projection does not yet reflect the potentially huge impact of federal aid cutbacks in multiple arenas, including the elimination of the enhanced Affordable Care Act subsidies that have helped thousands of Rhode Islanders buy health insurance, or the potential closure, without a state bailout, of two privately owned hospitals.
Another wrinkle: 2026 is an election year, so any big policy questions facing Rhode Island’s $20,391-a-year part-time lawmakers when they return to the State House at 4 p.m. on Tuesday will inevitably be filtered through a campaign lens.
The big political question heading into the 2026 session, and election, is whether risk-averse House Speaker K. Joseph Shekarchi will run for governor, giving the unions and other key players in the Democratic establishment an alternative to the “very unpopular” incumbent, Dan McKee, and former CVS executive Helena Foulkes.
Democrat Shekarchi, of Warwick, has promised a decision during the first quarter of the new year, which insiders take to mean during the legislature’s break between Feb. 16 and Feb. 20.
He has told The Journal he is not convinced he would need to step away from the speakership to run for governor.
Should that happen, there is no doubt his trusty second-in-command, House Majority Leader Christopher Blazejewski, would move up the ladder.
Two Democratic lawmakers have already announced they are running for other offices in 2026 – Rep. Jason Knight for attorney general, and Rep. David Moralesfor Providence mayor. At least one more – Rep. Joseph Solomon – has said he is “seriously” considering a run for AG.
The General Assembly starts another year with a familiar partisan balance, or imbalance, of 10 Republicans in the 75 member House and 4 in the 38-member Senate fighting uphill battles to make their voices heard. In the Senate at least, two of the three top Democrats reach across the aisle on certain high-profile issues, such as guns.
What is RI’s budget outlook?
The short answer is: It depends.
Based purely on the projected deficit for the year ahead, the budget is in as good, or better, a position as it has been in recent years.
But if lawmakers want to replace any of the federal spending cuts to health insurance, food assistance or clean energy programs in the Trump administration’s “One Big Beautiful Bill Act,” the costs could rise quickly.
And that doesn’t count any potential increase in reimbursement rates for medical or social service providers. The state Office of the Health Insurance Commissioner is slated to complete a review of reimbursement rates for primary care providers by Sept. 1, 2026.
A preliminary analysis by the state Budget Office raises concerns about “upward pressure(s)” from a number of directions that are currently “expected to increase the deficit by $55 [million] $70 million.”
State officials hope to learn this month that the sale of the struggling CharterCARE hospitals to the Centurion Foundation is going through.
If it doesn’t, the state may end up footing additional costs to keep Roger Williams Medical Center and Our Lady of Fatima Hospital open.
And this doesn’t count any new election year initiatives that McKee might propose later this month in his annual budget, such as cutting taxes on Social Security income over $107,000 per year.
Lawmakers will spend the next six months trying to figure out what to put in a state budget that has grown by 52% since the COVID pandemic, from $9.4 billion in 2019 to $14.3 billion this year.
Senate Republican Leader Jessica de la Cruz said the GOP will try to make Rhode Island more affordable by trimming state spending, or at least keeping spending growth in check.
“Rather than look for new revenue streams or shift tax burdens from one class to another, for example, the millionaire’s tax, we will look to cut spending, eliminate waste and hold agencies accountable,” de la Cruz wrote. “Look no further than the Washington Bridge debacle, the state is still hiring and paying the same contractors that it is suing for negligent work.”
Senate Republicans plan to propose bills that would eliminate the corporate minimum tax, end all state taxation of Social Security income, reduce utility fees for energy ratepayers and create an independent Office of the Inspector General, de la Cruz said.
What do the advocacy groups want?
The legislature’s Democratic leaders each have their own priorities. For Senate President Valarie Lawson, the president of the National Education Association Rhode Island, education funding is high on the list. Shekarchi is expected to unveil his sixth annual package of housing affordability bills before spring. And both are hyperaware of the precarious state of health care industry finances.
The Journal also asked a number of high-profile advocacy groups for their own 2026 legislative priorities. Here’s a sampling of what they had to say:
Rhode Island Coalition Against Gun Violence, Board Chair Ariana L. Wohl: “In light of the tragic mass shooting at Brown, RICAGV is revisiting its agenda to ensure we are meeting the moment.”
“We are, however, committed to working on an industry accountability bill that would ensure that victims of gun violence harmed by corporate misconduct can seek fair and appropriate justice in court,” Wohl said.
Wohl said the coalition is also considering a renewed push for a ban on the “possession of assault weapons” to help avert more “gun violence.” The compromise bill passed in 2025 bans future sales of certain firearms, but not possession.
AFL-CIO RI President Patrick Crowley:
Passage of a long-sought income tax surcharge for Rhode Island’s highest earners is the AFL-CIO’s top priority.
“I like to refer to it as ‘Wealth for Health,’” says Crowley. “The health care system is so precarious, largely because of the underfunding of reimbursement rates from the state.”
His pitch: “Use a wealth tax that is competitive with Massachusetts so we can shore up our system. Given how much of a tax break Trump’s HR. 1 [provides the wealthy] I’m [optimistic] we can get something done this year.”
Not far behind is this AFL-CIO ask: Index the minimum wage to inflation starting Jan. 1, 2028.
“We have increases scheduled on Jan. 1, 2026, and 2027. After that it’s time to index it in a way that is predictable to workers and businesses,” Crowley said.
Other AFL-CIO priorities:
● Pass an “extreme temperature regulation bill,” requiring employers to “mitigate” working conditions in extreme cold and extreme heat
● Regulate the use of self-checkout scanners to protect jobs
● Allow the state to negotiate automatic “longevity” bonuses back into state contracts
● A $20 million Climate Action Bond to build clean energy infrastructure
● Bonds to support career and technical education “We believe that a real … transition to a carbon-free economy must be union led,” Crowley said.
Economic Progress Institute Executive Director Weayonnoh Nelson-Davies: “Our entire team will be focused on protecting Rhode Islanders from the impact of this anything-but-beautiful bill,” passed by the GOP-led Congress, she said.
Specifically, she said, the EPI plans to advocate for creation of a state health care subsidy, at a projected cost of $60 million, to replace the expired enhanced tax credits that tens of thousands of Rhode Islanders relied on to purchase coverage through HealthSource RI.
“When they expire, premiums will double on average,” effectively forcing thousands of Rhode Islanders to give up their insurance through HSRI which will, in turn, “cause health insurance rates to increase for all Rhode Islanders.”
A second priority is convincing state lawmakers to replace nutrition assistance for the 14,000 Rhode Islanders at risk of losing SNAP benefits.
And finally, raising revenue by hiking the income tax rate on the “top 1%” to harvest “a projected $194 million in new revenue for Rhode Island annually.”
Although no one in the state’s ruling triumvirate has endorsed a tax increase, the chilly reception McKee and Shekarchi have given the idea in prior years has thawed a little this winter.
Greater Providence Chamber of Commerce President Laurie White: Needless to say, not everyone thinks a new “wealth tax” is a good idea. In fact, the Greater Providence Chamber of Commerce and the Rhode Island Public Expenditure Council say fighting it is their top priority.
In a commentary circulated to the media, the chamber’s president, White, argued, “Rhode Islanders have to work hard and live within their means – and state government should, too” instead of “once again looking for a get-rich quick scheme that is going to erode our long-term prosperity.”
Rhode Island has a “spending problem, not a revenue shortfall,” she said, adding that general revenue spending has increased 11% in two years, “far exceeding inflation over the same period. When spending grows at that pace, no narrowly targeted tax increase can help the problem.”
“Just this year, the General Assembly already enacted more than $100 million in new and enhanced taxes and fees on Rhode Island residents and business in an attempt to keep pace with runaway spending. Without meaningful spending discipline, a ‘tax the rich’ policy is not a solution,” White said.
Agreeing, Rhode Island Public Expenditure Council Executive Director Michael DiBiase says a tax increase would “undermine Rhode Island’s already weak competitive position and would do little to resolve the state’s spending problem.”
Common Cause RI Executive Director John Marion The top priority for this good-government citizens’ advocacy group – and the ACLU of Rhode Island – will be a “Rhode Island Voting Rights Act” that codifies federal protections into state law “that are being eroded by U.S. Supreme Court decisions and a lack of enforcement.”
Elaborating, Marion cited “protections against voter intimidation, vote suppression and vote dilution for racial and ethnic minorities,” coupled with protections for voter information.
Common Cause will also seek a tweak to the state’s campaign finance law to stop a single group from controlling multiple PACs,” which “has been a problem for years but has been taken to an extreme” by the newly formed Rhode Island League of Businesses.
At this point, the league has created 40 connected political action committees, one for every municipality plus a statewide entity, each potentially able to give the $2,000 annual maximum donation to league-supported candidates. Common Cause is also a member, along with the ACLU of Rhode Island, of a coalition pushing to close loopholes in the state’s Access to Public Records Act (APRA), to “make it easier for the public to access public documents.”
McKee’s administration fought earlier versions and the bill died a quiet death, with no one in power willing to remove any one of the obstacles to obtaining public records. Common Cause has one more big “sleeper” issue, and it takes a little explanation: As Marion explains, the Rhode Island General Assembly has four times since the 1940s passed resolutions seeking a federal Constitutional Convention.
“The most recent was in 2016 when it passed a resolution … requesting a convention to overturn the Supreme Court’s Citizens United decision. In 1977 it passed a resolution seeking a ‘Right to Life’ amendment. In 1971 it passed a resolution seeking an amendment that would require revenue sharing with the states. … In 1940 it passed a resolution seeking to limit the federal government’s taxing power.” “All four of those resolutions are considered active because they have never been repealed. So if 33 other states were to pass a resolution on any of those topics, it could trigger an Article V constitutional convention, which has never happened in history.”
Common Cause Rhode Island is seeking passage of a single resolution that will repeal all four of those active Article V resolutions going back to 1940.
“Massachusetts just did the same about a month ago. It’s part of a national effort of ours to get as many of these repealed as we can,” Marion said.
“There is far too much that could go wrong with a federal constitutional convention,” he said.
ACLU of Rhode Island Executive Director Steven Brown:
A third big priority for the ACLU – along with voting rights and public records legislation – is passage of the so called “364-day bill” that has passed the Senate five years in a row, only to die in the House. The legislation would reduce the maximum misdemeanor incarceration by one day to avert the deportation of non-citizens for minor offenses that carry a potential “one year” prison sentence.
“At a time when ICE is acting like a secret police force and using every excuse imaginable to round up and detain immigrants, passage of this bill would protect lawful permanent residents and others from deportation based on the commission of minor offenses,” Brown told The Journal.
Rhode Island Medical Society Vice President Stacy Paterno: Paterno named three top areas of concern where the RIMS hopes to have a say, including the physician shortage, the need to “stabilize” Fatima and Roger Williams Medical Center and the potential impacts of federal funding cuts on health care access.
To address physician shortages, especially in primary care and behavioral health, the group will be pushing policies that “improve reimbursement, reduce administrative barriers, strengthen malpractice stability and support clinician well-being – all critical factors in retaining current physicians and attracting new ones to the state.”
The group is also focused on the implications of Medicaid cuts in the “One Big Beautiful Bill Act” and the expiration of health insurance premium subsidies, Paterno said.
“Both issues raise real concern about access to care and affordability for patients, and about the downstream effects on practices already under strain,” she said.
—
Articled shared by RIMBA’s Lobbyist, Lenette Forry-Menard, Champion Advocacy Assoc. 1/5/26