McKee proposes budget fix to cover gaps in providing homelessness services

PROVIDENCE — A week ago when the Rhode Island Coalition to End Homelessness announced it would hold a rally Tuesday at the State House, the plan was to call on state leaders to allocate $30 million in the state’s fiscal year 2025 budget in order to maintain current services for homeless people.

But when dozens of lawmakers, shelter providers, and advocates convened Tuesday afternoon, the House Lounge they had reserved instead became a celebration space. 

Just 24 hours before the event, Gov. Dan McKee announced plans to amend his proposed fiscal year 2025 budget with a plan that could produce up to $31 million in funding to tackle the state’s rise in homelessness.

“This is welcome news to all of us,” Kimberly Simmon, the coalition’s executive director, told the crowd. “Without this much-needed funding, hundreds more Rhode Islanders will become unsheltered and exacerbate an already-burdened homelessness system.”

McKee’s plan includes a one-time $16.6 million appropriation of unspent pandemic relief funds to extend housing navigation, behavioral health, and stabilization services. The governor also wants to create a permanent funding stream by extending the state’s 5% hotel tax to short-term rental homes.

The change would bring the tax on entire homes rented for 30 days or less in line with how short-term rentals of rooms or units in owner-occupied homes are taxed, which is at the significantly higher rate of 13%.

Those combined sources have the ability to generate $31 million for homelessness, Housing Secretary Stefan Pryor said in an emailed statement Tuesday.

“My administration is committed to improving the housing outlook for Rhode Islanders — whether they are experiencing housing insecurity, seeking rentals that families can afford or working toward first-time home ownership,” McKee said in a statement Monday.

No date has yet been scheduled for a hearing on the governor’s proposed budget amendment.

House spokesperson Larry Berman said in an email: “Speaker K. Joseph Shekarchi is looking forward to reviewing the testimony on the amendments that will soon be heard by the House Finance Committee.” 

Senate president Dominick Ruggerio said in a statement Wednesday he too plans to thoroughly review McKee’s amendment as the chamber conducts its budget hearings.

“Continuing to address Rhode Island’s housing crisis remains an important priority for the Senate,” Ruggerio said.

McKee’s proposal may add to the work of a special House commission studying the impact of short-term rentals. The commission created last June was supposed to publish a report with recommendations for the full House by March 15, 2024. However, a resolution sponsored by the commission’s chairwoman, Rep. Lauren Carson, a Newport Democrat, seeks to extend that date to Sept. 30, 2025. The commission, originally set to expire on April 15, 2026, would instead expire on Dec. 10, 2025. 

Carson’s bill was heard by the House Committee on Municipal Government & Housing on April 11 where it was held for further study, as is standard practice for initial public hearings. The legislation is supported by the Rhode Island League of Cities and Towns.

1,000 shelter beds at risk if funding lost

The governor’s budget proposal comes as the state’s homeless response system faces a $22 million budget shortfall in the next fiscal year after pandemic-era federal aid runs out. Without funding, the coalition estimates 1,000 shelter beds across the state would close.

The coalition ahead of Tuesday’s rally also warned of 346 winter shelter beds set to expire at the end of this month. Housing Department spokesperson Patti Doyle acknowledged some shelter contracts are set to expire at the end of April, but would only result in the closure of 47 shelter beds.

“We expect these projects will apply to reopen for next winter,” she said.

Funding for additional seasonal beds at Providence’s Emmanuel House is being extended through September, Doyle added. The state also extended the lease for a 30-bed shelter in Washington County through the end of July.

Department officials also plan to extend contracts for a 120-bed Open Doors program in Warwick and the 30-bed Tri-county Community Action’s Family Shelter in Burrillville through September, Doyle said.

“As the governor has indicated, it is important to identify new recurring funding sources that can help address our housing and homelessness challenges over multiple years,” Doyle said.

Though advocates and shelter providers celebrated the governor’s proposed budget amendment, many told the crowd the fight to ensure funding is far from over.

“Meet your reps and senators if you haven’t already,” Rep. Teresa Tanzi, a South Kingstown Democrat, told the crowd. “While the governor has made this proposal, it is the first step — we as the House need to recognize the need for that and keep it in that budget.”

Sen. Jonathon Acosta, a Central Falls Democrat, said the governor’s commitment to homeless services touched a personal chord. Acosta recalled his own experience sleeping in the car with his mom as a child.

“At that age, I was too young to realize the gravity of our situation — we were homeless,” he said. “With time, it grew into a resentment and anger that I spent years trying to navigate.”

But that experience, Acosta said, also gave him purpose: to help create stable shelter for other families dealing with homelessness.

“Something came out of that suffering, something came out of that misery,” he said. “The work is long and tiring, and complex.”

This story was updated to include a statement from Senate President Dominick Ruggerio.