Local officials say financial impact of federal, state funds unclear | News

The $11.2 billion state budget that Gov. Dan McKee presented Thursday is only part of the spending picture for local towns that also stand to get millions of federal dollars to help them recover from COVID-19.

After reductions for administrative costs, South Kingstown is poised to receive about $9 million in municipal grants from the $1.9 trillion American Rescue Plan signed into law last week by President Joe Biden, Town Manager Rob Zarnetske said. South Kingstown officials were set to meet in a workshop Wednesday night to discuss the effect of the federal stimulus bill locally.  

“The South Kingstown School District is also eligible for additional grants in aid for education, but those grants are subject to more state control and the amounts have not yet been determined,” Zarnetske added.

The funds come from $1.78 billion in federal aid on its way to Rhode Island. The most immediate part of that aid that state residents will see comes in the form of $1,400 stimulus checks that have started going out this week.

Narragansett officials are also keeping a close eye on how the federal stimulus money is apportioned.

“Narragansett is estimated to receive $1.52 million in non-entitlement funds and a portion of $24.35 million due to Washington County,” Finance Director Christine Spagnoli said.

The towns don’t have estimates yet of how much they’ll get from the larger fund.

“The state is still working on the calculation for distribution,” Spagnoli said.

North Kingstown is projected to get an initial shot of $2.6 million in federal aid to localities, according to U.S. Sen. Jack Reed’s office. The aid to the town is projected to ultimately be as much as $11.8 million when factoring in the county aid, according to U.S. Sen. Sheldon Whitehouse’s office.

McKee’s budget contains no surprise increases in taxes or radical cuts to the education aid the state doles out yearly to local school districts.

There might be some concern from frequent state beach users, who could see a fee increase, and sellers of high-worth properties subject to a specific tax hike on sales.

But the new governor said he’s largely focused on keeping spending stable and helping cities, towns, businesses and residents recover from the economic slide that began last spring when COVID hit.

“Our Fiscal Year 2022 budget proposal addresses the pressing needs posed by the pandemic, none more important than vaccinating the state’s population as quickly and safely as possible,” McKee said Thursday. “Our proposal lays the foundation for us to equitably support the areas that need it the most in this recovery process: in our education system; in our cities and towns; and in our economy.”

It’s mostly good news for local officials who last year faced great uncertainties about what state aid to localities would look like this year.

The budget proposal fully funds the car tax phase-out, meaning cities and towns will see $139.7 million in relief. It also fully funds the education aid formula, with an increase of $34.9 million.

McKee’s budget also includes $30 million in COVID relief fund grants for small businesses hit hard by the pandemic and allocates $1 million for the Small Business Assistance Program, for businesses that have difficulties getting credit from traditional lenders.

As Lt. Governor, McKee traveled Wakefield late last year to stump for businesses to apply for COVID relief grant money as part of a statewide tour.

Now as governor, he’s also proposing legalizing retail marijuana sales for adults under what is described as a tightly-regulated program with a controlled annual rollout of 25 retail licenses, projected for three years. Several proposals for medical marijuana facilities in South County have already been submitted to the state, and the lottery process to award the limited licenses is scheduled to move forward this year.  

Sure to raise some objections in South County and beyond are proposals for a “modest” increase in fees for Misquamicut State Beach and parking at the port of Galilee.

Also of note is a plan to increase the maximum fine amount the Coastal Resources Management Council can levy from $2,500 to $10,000 per violation. And a proposal to update the structure of commercial fishing licensure would result in an additional $81,000 in revenue. The move would allow more flexibility for members of the fishing industry, as well as provide revenue necessary to support marine fisheries operations, according to the budget.

State aid to education for both Kingstowns and for Narragansett remains mostly level, with some changes.

South Kingstown would receive between $4.6 million and $4.9 million in state education formula aid according to the Department of Education. Narragansett would come in at about $2.2 million.

North Kingstown has budgeted for a total increase of 3 percent in state aid to the town, although that comes with a $521,000 reduction in school aid.

“The loss of over $500,000 in state aid this year will have an impact and the uncertainty of future years makes proper budget forecasting difficult,” Town Manager A. Ralph Mollis said. “We need a revised state formula to provide some budget certainty along with the recognition and financial support of outstanding systems like North Kingstown and the appropriate funding of unpredictable programs such as special education, transportation and charter schools.”

Also hit hard is revenue from the state tax on hotels, which is down 25 percent in the town’s proposed budget.

“This past year has been a challenging year to say the least,” Mollis said.