Last year U.S. Commerce Secretary Gina Raimondo addressed legislators in what would be her last State of the State address as governor with an empty room due to the pandemic. 

While the House Chambers wasn’t at full capacity like it normally is, Gov. Dan McKee had an audience both in person and virtually for his first State of the State address as governor on Tuesday. 

“Tonight, I am here to lay out our Administration’s plan to build a stronger tomorrow – to increase per capita income for individuals and families across our state,” said McKee. “ This means increasing earning power for all Rhode Islanders. It means putting more money in your pocket and improving your quality of life for years to come. And the only way to do that is by building a stronger, more stable, and fairer economy while prioritizing public health decisions that keep us all safe.”

Housing 

One of the most talked about issues in Rhode Island over the past couple of years has centered around housing.

On Tuesday, McKee addressed what he hopes will be in his budget to help address the housing crisis. 

“For Rhode Island to be an attractive place to live, work, and raise a family, we must address the availability and quality of housing – that means everything from providing supports to those experiencing homelessness, to increasing affordable housing, to ensuring we build more workforce housing for our middle-class families,” said McKee. 

One of the issues that McKee pointed to is the lack of housing itself in Rhode Island. 

“Rhode Island has historically under invested in housing. We are experiencing a housing shortage in part because too few units have been built over several years,” said McKee. “ In 2020, we built fewer units per capita than any other state in New England.”

McKee said the state made some progress last year with the General Assembly creating a permanent funding stream for affordable housing, and the state’s first deputy housing secretary position.

“But we can do more,” said McKee. “Let’s come together again and allocate a quarter billion dollars to make a once in a generation investment in our state’s housing stock.”

During his speech McKee said that the proposal he plans to send to the General Assembly would create and preserve thousands of units of housing.

“It will also transform blighted properties, strengthen communities, and create good-paying construction jobs in the process,” said McKee. “ How can we expect our sons and daughters to stay in Rhode Island if they don’t have housing they can afford to live in?”

McKee also pointed to the fact that homeownership is one of the most important ways to build generational wealth. But as McKee said during his speech the Ocean State has one of the lowest homeownership rates in the country “largely because families and individuals cannot afford the down payment.”

“It’s time to change that. That’s why I will be sending the General Assembly a proposal for investing $50 million to provide down payment assistance to Rhode Island households who need it most,” said McKee. 

One of those in attendance for the State of the State was Mayor Frank Picozzi. Liz Tufts, a spokesperson for Picozzi said “he enjoyed being in attendance last night,” and said that the Mayor thought that the Governor “had some very interesting proposals.”

“He’s very interested in affordable housing,” said Tufts.

House Speaker K. Joseph Shekarchi, who has made addressing the housing crisis in Rhode Island as one of his top priorities, said he was pleased to hear McKee speak about it during his address. 

“I am pleased that housing continues to be one of the Governor’s top priorities, as it is one of mine too,” said Shekarchi. “It’s good to hear the Governor’s focus on investment when it comes to the federal ARPA funds – I have been advocating for uses that produce long-term benefits for Rhode Islanders.  We need to balance competing priorities while making these meaningful investments.  I look forward to having the House continue its work, with our colleagues in the Senate and the executive branch, on all of these important issues this session.”

Education 

During McKee’s speech Tuesday, he said that his Administration is going to work with the General Assembly to “make sure our schools get the funding they need. My budget fully funds the state’s K-12 school system at the funding formula level, which will increase state aid to school districts.”

“My budget fully funds the state’s K-12 school system at the funding formula level, which will increase state aid to school districts,” said McKee. “We also want to ensure that any school district that would have experienced a cut in funding because of student enrollment decline, will not see that cut this year. We’ll also be continuing the commitment to a $250 million school construction bond with $50 million dedicated to crucial smaller projects like better heating and cooling equipment and safety upgrades.”

McKee also noted that higher education is important.

“We all know that the economy was changing well before the pandemic. A college degree or credential is a basic qualification for over 70 percent of jobs created since 2008. Although we have made great progress over the last decade, there’s more to do.”

McKee said he hopes to launch “Rhode Island’s first Higher Ed Academy, a statewide effort to meet Rhode Islanders where they are and provide access to education and training, that leads to a good-paying job. Through this initiative, which will be run by our Postsecondary Education Commissioner Shannon Gilkey, we expect to support over a thousand Rhode Islanders helping them gain the skills needed to be successful in obtaining a credential or degree.”

COVID response

One of the biggest questions facing the McKee Administration is whom he will pick to replace outgoing Rhode Island Department of Health Director Dr. Nicole Alexander-Scott. McKee thanked Alexander-Scott in his address, which brought a standing ovation by those in the gallery. 

McKee said that later this week he would be announcing a committee of Rhode Island Health professionals to lead a search for the interim and permanent director of the Department of Health.

“This once-in-a-generation public health crisis has taken more than 3,000 of our fellow Rhode Islanders – and we remember each and every one of them,” said McKee. “The pandemic continues to challenge our health care systems, our schools, our small businesses and it has created significant staffing challenges across many industries. It continues to challenge our resolve, our patience, and our strength. But time and time again, Rhode Islanders have shown that we are persistent. And even when we are faced with historic challenges, we continue to live with purpose and hope.”

 Despite the issues revolving around the pandemic, McKee used part of his speech to point to some positives regarding Rhode Island’s response. 

 “Rhode Islanders should be proud of how far we’ve come together. We’re number two in the country for putting shots in arms,” said McKee. “We are number one in the nation for tests per capita. Just two weeks ago, we did 175,000 tests, four times more per capita than Massachusetts.”

McKee attributed the positives to the fact that the State has been  “able to respond and adapt quickly.”

Notably, McKee said that he recently reassigned   Emergency Management Director Marc Pappas to lead the whole government COVID-19 response with a focus on expanding testing and vaccinations.

“While there are still pandemic challenges facing our schools, our students are largely back in the classroom where we know they learn best,” said McKee. “ Our doctors, nurses and health care professionals continue to prove that they are the best in the country. Together, we will continue to make the best decisions possible for our families and loved ones to keep them safe.”

Small Businesses 

According to McKee, small businesses employ over half of the workforce in the State. 

It’s why on Tuesday, he made small businesses a focus of his speech. 

“As these businesses continue to recover from the pandemic – we know that challenges still persist,” said McKee. That’s why in the first several weeks of my Administration, I put millions of unspent CARES Act dollars that we received in 2020 into grants to help more than 3,600 small businesses stay afloat.”

McKee said that his budget will call for a Small Business Budget Article which will:

-Reduce the corporate minimum tax from $400 to $375.

-Eliminate the sunset provision for liquor to-go, permanently allowing restaurants and brewpubs to sell alcoholic beverages with take-out food.

-Reform tangible taxes by allowing cities and towns to exempt a portion of business property from the tangible tax without seeking individual exemptions from the General Assembly.

-Reduce the interest rate on delinquent tax payments from 18 percent to 12 percent for non-trust fund taxes, bringing Rhode Island in line with Connecticut.

-Create the position of a Taxpayer Steward within the Rhode Island Division of Taxation. The Taxpayer Steward would guide both small businesses and individuals through the taxation process and assist with getting a resolution to various taxation challenges.

-Provide an exemption from sales tax for the trade-in value of motorcycles. Under current law, an exemption is provided for only private passenger automobiles not used for hire.

-Allow home-based cottage food production for non-farmers. The proposal permits home-based production of baked goods that do not require refrigeration or time/temperature control for safety. Currently, Rhode Island is the only state in the country that restricts cottage food licenses to farmers.

-Expand the entity type of financial institutions that are eligible to apply for the Small Business Development Fund, a tax credit program adopted by the General Assembly in 201

Also in the gallery from Warwick was Senate Majority Leader Michael McCaffrey.

“Governor McKee offered a thoughtful address in which he articulated several important priorities,” said McCaffrey in a statement. “ I am pleased that the areas he chose to highlight align with Senate priorities, such as investing in education, school facilities, housing, the environment, and supports for small business struggling under the weight of the pandemic. Of course, a speech is just a broad outline of priorities, and we will need to thoroughly review the details of the Governor’s proposals when they are presented to us.”