PROVIDENCE, R.I. — Governor Dan McKee delivered his 2026 State of the State address on Monday, highlighting a suite of initiatives aimed at reducing costs for Rhode Islanders and boosting economic development under his “Affordability for All” plan.
Tax Relief and Child Credit
A central focus of the speech was McKee’s plan to return $215 million to residents in the first year and $1.4 billion over five years. Proposals include:
Eliminating the state tax on Social Security benefits, a policy Rhode Island currently shares with only seven other states.
Rolling back the recent increase in the gas tax, projected to save nearly $9 million annually.
Creating a permanent child tax credit of $325 per child.
Energy and Healthcare Cost Reductions
McKee also emphasized efforts to lower utility and healthcare expenses:
Utility bills could be reduced by 25% through a combination of state programs and tax relief, totaling more than $1 billion over the next five years.
Health care costs will be curbed via price caps and penalties for insurance companies that fail to comply.
The budget allocates $9.5 million for a “Marketplace Affordability Program” to help residents who may lose HealthSource RI coverage due to stalled federal ACA subsidies.
Bond Proposals for Education, Housing, and Economic Development
The governor’s budget outlines $600 million in proposed bonds for key projects:
$115 million for maritime, defense, and life sciences expansion, as well as construction-ready sites to attract manufacturing jobs.
$215 million for upgrades at Rhode Island College, University of Rhode Island, and Community College of Rhode Island, with the Hope Scholarship program, providing two years of free tuition, becoming permanent.
$50 million for improvements to career and technical education classrooms statewide.
$120 million for housing initiatives, including $25 million to promote homeownership.
The Rhode Island Public Transit Authority (RIPTA) is slated to receive full funding to cover a $14 million deficit, following last year’s service cuts.
Roger Williams and Fatima hospitals
McKee discussed ongoing efforts to keep Roger Williams Medical Center and Fatima Hospital open amid bankruptcy proceedings and funding challenges. He is coordinating with the General Assembly and attorney general’s office to secure the facilities’ future.
Responding to the Trump Administration and federal changes
The governor highlighted budget allocations to mitigate federal cuts and new rules, including:
$10 million for hospitals
$20 million to maintain Medicaid coverage
Increased funding for senior centers
Doubling grants for the Rhode Island Community Food Bank
Additional support for Planned Parenthood
While McKee did not address the proposed millionaires tax in his speech, he indicated it will likely be included in the detailed budget briefing later this week.
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