Summary:
The Rhode Island State Fiscal Year 2021 budget which runs from July 1, 2020-June 30, 2021 was passed by the House Finance Committee on December 9, 2020. The budget proposal is scheduled for a vote by the full House and Senate on December 16, 2020.  Overall, the budget proposed by House Finance provides level funding of state general revenue to sustain existing early childhood programs, but no new state investments. 

  • No additional state or federal funding was allocated to the Child Care Assistance Program for FY21, with state funding expected to decline from $9.4 million in FY20 to $9.0 million in FY21. Rates for the Child Care Assistance Program were not increased in statute for any age category or setting. The continuation of the temporary rate increases authorized by the Governor to start in June 2020 have been continued on a month-by-month basis and due to declines in active subsidies, the overall funding has not increased. Continuation of enhanced rates depends on federal COVID relief funding continuing through June 2021 or new state funding. The rates in statute have not been increased and do not meet the federal equal access standard.
  • No additional state funding was allocated for the RI Pre-K expansion.  The budget continues the $14.9 million in state funding allocated for FY20 and relies on federal grant funding to support the new 17 classrooms added for the 2020-2021 school year ($4.2 million from the PDG Birth to 5 grant).
  • No state funding has been allocated to fund perinatal doula services through Medicaid.
  • No state funding has been allocated to fund family home visiting programs.
  • A $65 million bond referendum question to support affordable housing will be placed as a proposition on a statewide the ballot with a vote to be held on March 1, 2021.
  • A separate $15 million bond referendum question to support physical improvements to and development of licensed early childhood care and education facilities through an Early Childhood Care and Education Capital Fund will be placed as a proposition on a statewide ballot with a vote to be held on March 1, 2021.

Notes on Federal Grants:
The FY21 budget includes $8.9 million federal funding from the Preschool Development Grant: Birth to Five (Year One of a three-year $27 million grant) allocated as follows:

  • $4.2 million to RIDE for 17 new RI Pre-K classrooms and program management/professional development in 2020-2021
  • $1.9 million to RIDOH to conduct a comprehensive statewide birth through five needs assessment to provide more choices for child care centers, home visiting service providers and home-based child care providers,
  • $1.5 million for EOHHS to fund a public awareness campaign, research activities related to the barriers to access child care, and a survey to determine child care needs in the state. Funding also supports contracted information technology management and program evaluation services.
  • $1.4 million for DHS for unspecified projects.

The FY21 budget includes $5.0 million from federal CARES Act funds for a new child care relief capital fund. Funds are being awarded to centers and family based providers, including those that do not currently participate in the Child Care Assistance Program so long as they meet the grant requirements. The Department anticipates awarding up to 500 grants to providers for physical space improvements needed to comply with enhanced health and safety regulations.

FY21 HOUSE FINANCE BUDGET DETAILS COPIED FROM HOUSE FISCAL OFFICE SUMMARY:

Commerce: Housing Governance Fund. H 7171, Substitute A does not include the Governor’s proposal to double the Real Estate Conveyance Tax for values over $0.5 million to support $3.5 million of expenditures for new programs established in conjunction with her proposed housing policy governance restructuring. While that restructuring is also not included, H 7171, Substitute A does include a $65.0 million bond referendum to support affordable housing.

DHS: Child Care Provider Capital Support. H 7171, Substitute A includes $5.0 million from federal Child Care Development funds for a new child care relief capital fund. Funds will be awarded to center and family based providers, including those that do not currently participate in the Child Care Assistance Program so long as they meet the grant requirements. The Department anticipates awarding up to 500 grants to providers for physical space improvements needed to comply with enhanced health and safety regulations.

DHS: Child Care Rates – Current Law. H 7171, Substitute A excludes the Governor’s proposal to increase rates paid to center-based child care providers for infant, toddler and preschool age children in the child care assistance program. The budget delay revised the FY 2021 estimated to cost $1.9 million. It should be noted, however, that on May 27, the Governor signed Executive Order 20-39 authorizing the Department to temporarily increase child care reimbursement rates for Child Care Assistance Program providers to assist with the cost of new regulations. Through executive orders, the enhanced rates have been extended each month through December 23. The November caseload estimate assumes the enhanced rates will continue to be extended through the remainder of FY 2021.

DHS: Preschool Development Grant (GBA). In December 2019, the state was awarded a three-year, $26.8 million federal grant to improve birth through age five education. H 7171, Substitute A includes the Governor’s requested budget amendment to include $8.9 million for FY 2021 across four state agencies, including $1.4 million for the Department of Human Services.

RIDE: Pre-K Program to Current Law (1.0 FTE). The Governor recommends $4.9 million from general revenues from a proposal to add prekindergarten students enrolled in district-run classrooms to the funding formula, expand the number of non-district classrooms, and add a new full-time equivalent position. The proposal does not limit the expansion of district-run classrooms supported by the formula, so long as they are approved by the Department. Additionally, the state received a three-year, $26.8 million grant to improve birth through age five education, including creation of new classrooms. It appears that the new federal funds could be used for staff. H 7171, Substitute A maintains current law on the funding formula; it does, however, include $4.2 million from new federal funds, noted separately.

RIDE: Preschool Development Grant (GBA). In December 2019, the state was awarded a three-year, $26.8 million federal grant to improve birth through age five education. The Governor’s budget excludes the federal funds, though supporting documents indicate that funds would be used to expand and support the state’s prekindergarten program. It should also be noted that the Department awarded 17 new state classrooms in FY 2021 using $3.0 million of the new federal funds. H 7171, Substitute A is consistent with the Governor’s requested amendment to add $4.2 million from new federal preschool development funds, including the $3.0 million for classrooms and $1.2 million for program expenses, including professional development and technical assistance for those new classrooms.

EOHHS: Preschool Development Grant. In December 2019, the state was awarded a three-year, $26.8 million federal grant to improve birth through age five education through the federal Preschool Developmental Grant. H 7171, Substitute A includes $1.5 million in the Executive Office’s budget to fund a public awareness campaign, research activities related to the barriers to access child care, and a survey to determine child care needs in the state. Funding also supports contracted information technology management and program evaluation services.

EOHHS: Perinatal Doula Services. H 7171, Substitute A does not include the Governor’s recommendation to expand the Medicaid program to include coverage for Perinatal Doula Services. Originally estimated to cost $0.2 million with half coming from general revenues, the revised estimate calculated with the November Caseload Estimate to reflect delay in budget adoption is $149,956, including $57,308 from general revenues.

RIDOH: Home Visiting Program Expansion. The Governor’s budget adds new general revenue expenditures of $0.4 million to provide families with resources and services such as preventive health and prenatal care and $0.7 million to support family home visiting programs, which provide families with resources and services such as promoting positive parenting techniques, and finding employment and child care solutions. H 7171, Substitute A does not include the new funding. This program is currently funded with federal Maternal and Child Health Care Block Grant funds.

RIDOH: Preschool Development Grant & Other Federal Adjustments (GBA). The Executive Office of Health and Human Services received a new three year grant award of $27.0 million to improve the quality and availability of early childhood care and education services in the state. The Executive Office entered into a Memorandum of Understanding with the Department of Health to complete certain tasks. The Governor subsequently requested an amendment to include $1.9 million in the Department of Health to conduct a comprehensive statewide birth through five needs assessment to provide more choices for child care centers, home visiting service providers and home-based child care providers.

Proposed Ballot Questions for March 1, 2021 Special Election:

Question 3: Housing and Community Opportunity $65,000,000
Approval of this question will allow the State of Rhode Island to issue general obligation bonds, refunding bonds, and/or temporary notes in an amount not to exceed sixty-five million dollars ($65,000,000) to increase the availability of affordable housing and support community revitalization through the redevelopment of existing structures, new construction, and property acquisition

Question 5: Early Childhood Care and Education Capital Fund $15,000,000
Approval of this question will allow the State of Rhode Island to issue general obligation bonds, refunding bonds, and/or temporary notes in an amount not to exceed fifteen million dollars ($15,000,000) for physical improvements to and development of licensed early childhood care and education facilities through an Early Childhood Care and Education Capital Fund. Quality early childhood education and child care is necessary for a robust economy in support of parents in the workplace and as foundation to the academic success of Rhode Island’s children. In 2019, only twenty percent (20%) of the physical space licensed for the State’s four-year-old population meets the State definition of quality, and there are eighteen (18) cities and towns that do not have any infant/toddler care options. These funds will support greater access to safe, high-quality early learning opportunities for Rhode Island children.