STORY OF THE WEEK: Two different factors – a tougher fiscal climate and the approach of the next race for governor – converge as Gov. Dan McKee prepares his State of the State message on Tuesday and a budget proposal for 2025-26 on Thursday.

McKee is poised to turn 74 in June, and he shows no signs of backing away from a run for reelection.

Traffic on the Washington Bridge is generally moving more smoothly than in the past, although the governor still faces headwinds, as indicated by a slumping approval rating and the ongoing headache of the RIBridges cyber-breach.

As this column is being written Monday, McKee has the chance to offer a forward-looking message Tuesday night, while looking to expand his support and tease some of the highlights from the spending plan set to emerge on Thursday.

Rhode Island’s budget (which includes a lot of federal money) has grown dramatically, to more than $14 billion, from $8.1 billion in 2014. With about $330 million in red ink that needs to be wiped out by July 1, the state appears to be sailing back into a new era of perennial deficits, as spending is growing faster than revenue. (RIPEC has a detailed look at the deficit.)

The red ink limits McKee’s ability to offer new initiatives and to invest in efforts to bolster the economy. But the governor has demonstrated an uncanny ability to emerge victorious in close elections, so – barring a change in course – many eyes will be watching to see if he can pull another rabbit out of the hat in 2026. 

SUCCESSION: The narrative from supporters of Senate President Dominick Ruggerio is that the 76-year-old legislative leader is in better shape heading into the new session, and Ruggerio told reporters on opening day, “My health is very good. That’s why I don’t want you guys to get mixed up.” But Ruggerio mistakenly voted “present” rather than for himself during the vote for president, he rested his head on a hand during a brief scrum after session, and a faction of senators led by former majority leader Ryan Pearson say their concerns about Ruggerio’s health remain.

In an interview, Pearson said the proof will be in the pudding when it comes to Ruggerio and his ability to effectively lead in 2025. For now, Ruggerio has elevated Sen. David Tikoian (D-Smithfield), a former state trooper and North Providence police chief, as Senate whip, taking the role formerly held by new Majority Leader Val Lawson (D-East Providence). As expected, Ruggerio also stripped the respective Judiciary and Environment and Agriculture committee chairmanships of Pearson supporters Dawn Euer (D-Newport) and Alana DiMario(D-Narragansett). The question of whether Ruggerio will stick it out or pass off the presidency will linger as the Senate continues to meet this year, just one day a week for now, on Tuesdays. While majority leaders have traditionally had an edge on moving up to top roles in the General Assembly (as Ruggerio did in March 2017), Lawson, Tikoianand another Ruggerio stalwart, Sen. Matthew LaMountain (D-Warwick), are up-and-comers in the Senate.  

FIRING OFF: Given the tendency of legislative leaders to avoid making news in year-end interviews, it attracted notice when Ruggerio told the Globe that he might be open to ban on sales of semiautomatic rifles, aka “assault weapons.” But some supporters of that issue think the configuration of the Senate Judiciary Committee may be enough to squelch the ban, since, with the addition of Sen. Thomas Paolino (R-Lincoln), it maintains three Republicans on the 10-member committee (Senate GOP Leader Jessica de la Cruz (R-North Smithfield) and GOP Whip Gordon Rogers (R-Foster) are ex-officio members) and not every Judiciary Democrat backs the gun-restriction side. In 2021, the top two Democratic leaders in the House and Senate made the difference in using their ex-officio capacity to cast deciding affirmative votes on two gun bills. But Ruggerio may now have plausible deniability on the committee, and Whip Tikoiantells me he is reserving judgment on a proposed semiautomatic rifle ban until he reads the legislation. 

CATBIRD SEAT: In contrast to the division in the Senate, where almost a third of members did not support Ruggerio for president, House Speaker Joe Shekarchi continues to preside over an era of good feeling in the larger House of Representatives. Only one Democrat, progressive Rep. Enrique Sanchez, did not vote for Shekarchi as he won his third two-year term as speaker on a 62-10 vote Tuesday. The 10-member GOP faction backed Republican Minority Leader Mike Chippendale (R-Foster) and two pro-ShekarchiDemocrats were absent.

The speaker is sitting on more than $3 million in his campaign account – a sum that will expand with contributions from the 475 people who attended his first big fundraiser of 2025 – at Bally’s in Lincoln on Thursday night. That money makes Shekarchi well-positioned to run for governor next year, squaring off against Democratic candidate-in-waiting Helena Foulkes, if Gov. McKee decides to call it a day. “I think my statement has been I can’t see myself running against Governor McKee, and nothing has changed in that position,” Shekarchi told me on Political Roundtable last week. But despite Shekarchi’s advocacy, efforts to address Rhode Island’s housing crisis remain at an early level. Health care is another vexing challenge, and while the speaker has also championed attempts to develop the life sciences, the state still suffers from such long-running bugaboos as under-performing public schools and an uneven economy.

SHEKARCHI SHORTTAKES: Some highlights from our interview.

***Shekarchi suggested the state has limited influence over Hasbro’s potential move out of state because, unlike Citizens Bank, the company has not made a specific ask. He added: “If industry in Rhode Island wants to speak or talk or need anything or want anything from the Speaker of the House, they will get it, and they’ll get it within 24 hours.”

***The speaker declined to wade in on what he would advise Ruggerioif asked for advice. “I have learned a long time ago that the best position for the speaker is to take no position on the internal workings of the other chamber,” Shekarchi said. “I will not comment on whether the Senate president should stay or not. I will tell you, he tells me he wants to stay. And I think if that’s what he wants, then he should do it. He tells me he’s well enough to run the Senate, and I believe him.”

***Shekarchi expects fewer federal dollars from the Trump administration – a not-surprising view given that a gusher of COVID aid fueled an uncharacteristic string of budget surpluses in RI.

CAMPAIGN 2026: A current poll is testing the job approval of Attorney General Peter Neronha and Central Falls Mayor Maria Rivera as prospective candidates for lieutenant governor. Given the sour relations between Neronha and Gov. McKee, the thinking is the poll may be coming from Helena Foulkes’ campaign

PRIVATE EQUITY BLUES, PART I: It’s no secret that the California-based owner of Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence has financial issues. As I reported in 2021, a state advisory council approved an ownership change involving Prospect Medical Holdings even though an accounting firm warned that its liabilities exceeded assets by more than $1 billion. Now, Prospect may be headed toward bankruptcy, a move that would delay attempts by the Centurion Foundation, an Atlanta-based nonprofit, to acquire the two Rhode Island hospitals. The state has signed off on the deal, but Centurion is still working to complete its financing. Both AG Neronha and Centurion remain hopeful that the ownership change will move ahead, although that is not without its own risks. Neronha used the situation to renew his criticism that private equity is having a devastating effect on healthcare – a situation that has also played out with Steward Health Care in Massachusetts.

PRIVATE EQUITY BLUES, PART II: A new bipartisan report by the U.S. Senate Budget Committee lambastes how private equity firms –including Leonard Green & Partners, the former majority owner of Prospect Medical Holdings — have extracted profits from poor communities and put patients in danger. U.S. Sen. Sheldon Whitehouse, who led the probe with Sen. Chuck Grassley, an Iowa Republican, shared this observation with CBS News: "Private equity has infected our health care system, putting patients, communities and providers at risk. As our investigation revealed, these financial entities are putting their own profits over patients, leading to health and safety violations, chronic understaffing and hospital closures." Among other details, the report found that in 2022 Prospect CEO Sam Lee “invested heavily” at his home in Aspen, Colorado, one of two homes he owns with a combined value of $20 million. 

THE UNHOUSED: As surely as night follows day, it gets cold in Rhode Island every winter – and the state faces a new crisis surrounding a lack of housing for homeless people. Gov. McKee’s office announced emergency winter hubs and added hours at drop-in centers for people seeking to escape the elements. But advocates for the unhoused and some elected officials argued for McKee to declare a state of emergency – a move whose value was downplayed by the governor. Helena Foulkes was among those advocating for the declaration. Via statement, she said, “A public-health emergency declaration would cut through red tape, unlock vital resources and enable faster deployment of emergency-shelter options. We cannot afford to wait while Rhode Islanders suffer in the cold.”

RI POLI-MEDIA PEOPLE ON THE MOVE: Peter H. Chapman, most recently CEO for a public-private development partnership in the Virgin Islands, is the new president/CEO of ONE Neighborhood Builders …. Emily Howe, a former executive director of the Rhode Island Democratic Party, has been named permanent director of Clean Water Action RI …. David O. McCready, president/CEO of Southcoast Health, was elected as an at-large delegate to a regional policy board of the American Hospital Association …. There’s no truth to the rumor that former Ruggerio CoS and inveterate NYY fan Stephen Iannazzi will search for George Steinbrenner artifacts via his new Cleveland market leader assignment for Cox Communications.

CANNABIS: Rhode Island’s Cannabis Control Commission has established its rules and regulations, almost three years after the state legalized adult-use cannabis. With social-equity licenses yet to be awarded, questions remain about whether the state’s effort to right some of the wrongs of the war on drugs will live up to the hype. 

LABOR: While the percentage of Americans who belong to a union is down from years ago, more organizing continues here and there. One example is how medical residents at Rhode Island Hospital overwhelmingly voted in favor of establishing a union, as my colleague Olivia Ebertz reports. Objectives sought by the residents include a 401(k) matching plan, parental leave, fertility leave and specific departmental benefits.

BOOK CORNER: If your New Year’s resolutions include reading more, allow me to suggest G-Man: J. Edgar Hoover and the Making of the American Century by Yale professor Beverly Gage. It’s a long, fascinating and authoritative account of the man whose name remains synonymous with the institution he once led, the FBI. Of course, there’s a Rhode Island connection, too, since, as Gage writes, TheProvidence Journal was among the newspapers sugar-coating Hoover’s life when he died in 1972: “He rigorously forbade FBI men from engaging in partisan politics in any way, shape or form.” That doesn’t square with Hoover’s extra-legal surveillance of Americans and the expansive harassment campaign launched against Martin Luther King Jr. Much of this did not come out until after Hoover’s death, explaining why his reputation plummeted after soaring to lofty heights for much of the 20th century.  

KICKER: Speaking of books, the annual reading of “Moby-Dick”attracted record attendance in New Bedford. As Ben Berke reports, attendees came from 37 states and as far away as Brazil, Sweden and Australia. The reason for the heightened interest is uncertain, although New Bedford Mayor Jon Mitchell recently unveiled designsfor a forthcoming Herman Meville statue. As Ben reports, “Next year marks the 30th anniversary of New Bedford’s Moby Dick marathon. It began on January 3, the same date that Melville shipped out of the port of New Bedford in 1841 on his first and only whaling voyage.”