Veterans, housing, children: Who benefits, and who doesn't, in McKee's proposed RI budget

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Even a billion dollars in federal cash and a $600-million surplus aren't enough to satisfy all the demands for funding made on a state budget.

But the rare pandemic windfall allowed Gov. Dan McKee — around eight months before he has to face primary voters — to show his support for retired military veterans, the Rhode Island Convention Center and affordable-housing developers, among others.

Here are some early reactions to the $12.8-billion spending plan.

Military pensions

Veterans for years have been lobbying Rhode Island to join states including such as Massachusetts and Connecticut that exempt military retirement benefits from state taxes. (Rhode Island currently exempts the first $15,000 in military pension income.)

And McKee's budget would do that gradually over the next five years.

More: McKee's $12.8-billion budget targets COVID recovery, avoids tax or fee hikes

The tax cut is one of the few permanent state tax or spending changes proposed in a budget dominated by one-time spending.

The cost of the military exemption to the state in lost revenue would rise from $736,000 in the first year to $5.8 million annually when the exemption is fully phased in, according to Department of Revenue estimates.

Convention Center

Gov. Dan McKee
Gov. Dan McKee

The pandemic halted conventions and sporting events while turning the Rhode Island Convention Center and Dunkin' Donuts Center into COVID testing sites and mass vaccination clinics.

Now McKee wants to get the facilities going again and budgets $47 million in federal American Rescue Plan money for them.

What's the money for?

McKee would spent $9 million to cover operating losses at the Convention Center Authority and the remaining $38 million for "facility improvements."

Those improvements, according to Department of Administration spokesman Derek Gomes, include a new roof for the Dunkin' Donuts Center, a renovation of the fifth floor of the Convention Center, heating, ventilation and cooling work and "tech upgrades."

More: This Just In: McKee's budget; people want to live here

Medicaid

Progressives are unenthusiastic about much of the budget — including the absence of any tax increases on high earners — but they welcome McKee's move to expand Medicaid eligibility for undocumented immigrants and new mothers.

For $6.6 million, the budget would make all new mothers with incomes up to 258% of the federal poverty level — regardless of immigration status — eligible for a full year of Medicaid after the birth of a child. Currently, mothers who make between 138% and 258% of the poverty level are eligible for coverage 60 days after birth. (Women who make up to 258% are already eligible while they are pregnant.)

The budget's "Cover All Kids" proposal, estimated to cost $1.9 million, would extend Medicaid coverage to children now ineligible due to immigration status.

Housing

If there was any doubt that housing has risen from obscurity to the top of the state policy agenda, the $250 million in federal funds McKee wants to spend on a variety of housing programs should put an end to it.

Homes RI, a coalition led by nonprofit housing developers, had suggested half a billion dollars for affordable housing in the budget and said in a statement it was "pleased" by McKee's plan.

However, the group asked state lawmakers, who will ultimately decide what is spent, "to consider fully funding our collective recommended investments."

"We ask state leaders to also think about long-term, sustained investments in housing that will be necessary for the prosperity of the State in decades to come — especially for Rhode Islanders with the lowest incomes," Homes RI said in a news release.

More: RI housing market plagued by a ‘critical shortage’ of homes in December

The proposed Rescue Plan spending on housing includes $90 million that would go into Rhode Island Housing's affordable housing development programs, $50 million for down payment assistance and $25 million for affordable housing site acquisition.

But it also includes $55 million for real estate programs whose contours are relatively undefined. It proposes $20 million to build "workforce housing" for people making up to 120% of area median income, $10 million to "increase developers’ ability to get projects under way" and $25 million to redevelop properties in low-income communities "for the express purpose of creating housing and community/commercial spaces that satisfy community needs, as well as supporting critical home repairs."

There is no spending proposed on traditional government-run public housing.

Children

McKee's budget receives mixed reviews from health care and social service providers.

It includes large infusions of federal cash for child care workers, social workers and pediatricians' practices but does not raise the reimbursement rates for many services, which providers say have not kept up with rising costs.

One example is in Early Intervention, a program that provides free therapy and special education for children younger than 3.

Last year, shortages of clinicians and therapists forced all Early Intervention providers in the state to put children not already receiving services on a wait list.

McKee's budget includes $11 million in federal money for Early Intervention on top of the $5.5 million lawmakers approved at the start of this year.

But what happens after that federal money runs out is unclear, as it is for other proposed one-time boosts for child care workers, pediatric medical practices and child welfare workers.

The Community Provider Network of Rhode Island, a trade association for providers of services to people with developmental disabilities, praised McKee's Cover All Kids, housing and child care proposals.

"However, the proposed budget neglects to solve the underlying structural financing for the early intervention program," the group said in a new release. "Using [American Rescue Plan] funding, which is one-time funding, without proposing State investments to maintain these programs, is disappointing, and doing so merely delays the problem rather than solving it."

The budget also did not include additional funding for the First Connections program that sends nurses or case workers to check in on newborns.

Cities and towns

Former Cumberland mayor McKee talks a lot about helping municipalities, so it's no surprise that city and town leaders are mostly pleased with the budget.

The budget would maintain school aid and allow communities to give businesses breaks on the tangible tax they pay without General Assembly approval.

But it would not fully fund the payments, mostly to Providence, that communities receive for forgoing taxes from nonprofits.

The budget includes $47 million for a municipal matching grant program for building or renovating a "community wellness center."

Administration officials said the definition of community wellness center is based in federal law and had few specific examples of what would qualify.

However, one thing that they said would qualify for the money is a "municipal learning center," McKee's signature local education program. The budget separately includes $15 million for municipal learning centers.

The McKee administration says, in addition to the original center in Cumberland, it has received interest from five communities in building nine new municipal learning centers. They would be in Middletown, North Providence, Central Falls and Woonsocket, plus five in Providence.

Not in the budget

There was no mention of funding for redeveloping the vacant Industrial Trust tower in downtown Providence.

However, the budget gives state Commerce officials enough money in a variety of economic development programs to invest in a Superman Building project if they decide to create one.

panderson@providencejournal.com

(401) 277-7384

On Twitter: @PatrickAnderso_

This article originally appeared on The Providence Journal: Here's a breakdown of Gov. Dan Mckee's Rhode Island state budget

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