Copyright The Boston Globe
Three reports released Thursday afternoon by the McKee administration spell out how those changes will be felt in Rhode Island. In its report, the Rhode Island Department of Revenue estimates provisions in the law will reduce state revenue by $34.7 million in fiscal year 2026; by $36.4 million the following year; and by “an average of $15.0 million in the following three years.” “Trump’s fiscal policies are nothing more than a shell game that shifts staggering federal costs onto states that simply can’t absorb them,” McKee, a Democrat, said in a statement. “My administration will use our limited state resources to try and protect the most vulnerable, but no state can backfill an entire federal program, and the President and Congressional Republicans now own the devastating consequences of these choices.” The reports were developed by the Office of Management and Budget, Department of Revenue, Executive Office of Health and Human Services, Department of Human Services, and HealthSource RI. The law sets new, expanded work requirements for Medicaid and SNAP clients to receive the benefits. According to the report compiled by the state’s Executive Office of Health and Human Services, under the new law, an estimated 2,300 Rhode Island households “will lose SNAP eligibility entirely,” including some of the state’s most vulnerable residents, such as “asylum seekers, survivors of trafficking or domestic violence, and other humanitarian entrants currently receiving assistance.” Hundreds more will see their benefits reduced, McKee’s office said. “Food pantries, refugee resettlement agencies, and community based nonprofits will face increased demand as SNAP households lose access to benefits,” the report states, adding that the state’s Department of Human Services will work with the Department of Children, Youth, and Families and the Office of Refugee Resettlement “to identify interim supports for affected households.” According to McKee’s office, the law also “severely threatens Medicaid coverage for over 30,000 Rhode Islanders.” Approximately 24,600 people will be at risk of losing coverage due to the updated work requirements as well as 9,000 others, who could see coverage end over new restrictions placed on immigrants, refugees, and asylum seekers, the report states. Additionally, the law “ends the Affordable Care Act enhanced premium tax credits that help keep health insurance affordable, driving up costs and forcing families to pay hundreds more each month for coverage,” officials said. As a result, HealthSource RI, the state’s health care exchange, estimates about 13,100 customers will drop coverage by 2027, the HHS report states. “Customers that drop coverage will leave an additional $70 million in federal assistance on the table,” the report states. “This money, instead of primarily flowing to local healthcare providers, will not arrive in Rhode Island at all.” According to the report, the “One Big Beautiful Bill Act” will also reduce the state’s Medicaid provider tax by about $151 million by fiscal year 2032, a move that puts at risk “our support to hospitals and critical providers,” officials said. The tax is a mechanism states can use to finance Medicaid spending not covered by federal funding, according to the report, which notes these taxes “are a significant source of state revenue.” According to state officials, the law also “terminates or freezes over $75 million in federal funding support for energy investments, scientific research, and critical infrastructure.” The measure also strips clean-energy tax credits included in the Biden-era “Inflation Reduction Act,” “cutting clean-energy investment and freezing over $80 million in grants, while pausing vehicle-emissions standards, threatening Rhode Island’s ability to meet its climate goals,” McKee’s office said. The law “reduced or eliminated many federal clean energy and energy efficiency initiatives, which may complicate the state’s efforts to attain required emissions reductions under the state’s Act on Climate,” according to the report compiled by the Office of Management and Budget. “[The law’s] provisions have mixed impacts on K-12 and higher education, while new federal policy changes may present both challenges and opportunities to the state’s economic development activity,” the report states. Federal funding makes up more than 35 percent, or $5.1 billion, of the state’s 2026 fiscal year budget of $14.3 billion, according to the report, which states “the uncertainty of the federal landscape is challenging to state agencies relying on federal awards for key operations.” “The state cannot backfill substantive reductions in federal aid with general revenue – particularly as the state faces a projected deficit of approximately $300 million in fiscal year 2027,” states the report, which aims to inform lawmakers about how to make budget and policy decisions in the coming year. In its statement, McKee’s office said, “Like states nationwide, Rhode Island continues to evaluate these changes, await critical federal guidance, and determine its course of action.” Read the reports: Office of Management & Budget Department of Revenue Executive Office of Health & Human Services
