Health care may have received top billing in the revised $14.3 billion fiscal year 2026 budget lawmakers unveiled late Tuesday night, but the silent star is its Congressional counterpart.
The federal budget reconciliation bill still under debate in D.C. threatens to topple safety net programs like Medicaid and food assistance, and in turn, the state’s carefully balanced budget.
“It seems like Washington doesn’t even know what’s going to happen in Washington,” House Speaker K. Joseph Shekarchi said in a June 12 briefing on the budget with fellow Democratic state representatives.
Which puts the onus on state lawmakers to prepare, and protect, as best they can in the face of uncertainty. One possibility: returning to Smith Hill in October to revise the fiscal 2026 budget based on any federal changes.
It’s an unusual but not unprecedented move; while the Rhode Island General Assembly typically convenes for six months, from January to June, lawmakers can come back — and they have. In 2020, after the pandemic abruptly curtailed the regular session less than halfway through, lawmakers returned for a brief December session to pass a state budget and appoint judges.
Shekarchi was reluctant to commit to the prospect of a second session this year, though both chambers will keep the option open by not formally adjourning after their final day in June.
“It’s a possibility not a probability,” Shekarchi said. “I don’t want to speculate.”
Senate President Valarie Lawson was also noncommittal.
“We will continue to monitor developments on the federal level and make a determination when the impact becomes clear,” Lawson said in an emailed statement.
What is clear is new language in Rhode Island’s revised fiscal 2026 budget, laying the groundwork for potential overhauls to federal tax policies and funding cuts.
Multiple ‘big beautiful bill’ mentions
The 435-page document contains at least five new sections specifically devoted to addressing uncertainty in D.C., including multiple references to President Donald Trump’s “big beautiful bill,” as the federal current tax and spending has been called.
The Republican budget reconciliation bill is named in Rhode Island’s proposed spending plan specifically in relation to taxes. Lawmakers want to make sure the existing state tax base upon which their revenue calculations rely is shielded from major changes in federal tax code.
Other, first-time additions to the annual state spending plan formalize work that has already begun behind-the-scenes, calling on various state agencies and departments to study and prepare for possible changes to federal grants, Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
Medicaid comprises more than one-third of the state’s annual budget. Rhode Island also received $343 million in federal food assistance funding in fiscal 2023, the most recent data available.
“We wanted to recognize the work that’s being done, and memorialize it,” Shekarchi said during the June 12 budget briefing. “We are making sure we are ready.”
Each advisory group is also required to submit a report of recommendations from its review to the governor, House speaker and Senate president, “as soon as practicable after the enactment of the federal budget for fiscal year 2026” and no later than Oct. 31.
And, based on Congressional Republicans’ push to increase cost-sharing requirements in states based on payment mistakes in their food assistance programs, Rhode Island’s revised budget plan also calls for a working group, led by its human services department, to study and make recommendations on how to reduce SNAP under and overpayments.
In fiscal 2023, Rhode Island’s food assistance program error rate was 12.4% compared with the 11.68% national average. The Congressional reconciliation proposal sets a 6% error rate cap before states have to spend more as a penalty for payment mistakes.
The reconciliation budget approved by the U.S. House of Representatives in a party-line vote on May 22 sets a 2028 start date on SNAP changes. But Rhode Island administrators want to start preparing now, said Sharon Reynolds Ferland, House fiscal advisor.
“This also sets up an ongoing framework for oversight reporting,” Reynolds Ferland said, speaking to the House Committee on Finance at its June 10 budget hearing.
Shekarchi said state officials remain in “close communication” with its federal delegation on measures out of Congress.
Until then?
“We’re flying blind to some degree on some it,” Shekarchi said.
The Rhode Island House of Representatives is scheduled to consider and vote on the revised fiscal 2026 budget at 3:30 p.m. Tuesday. If approved, the spending plan then heads to the Senate, which has not yet scheduled a vote.
This story was originally published by the Rhode Island Current.
