Gov. Dan McKee on Thursday unveiled the details of his plan to spend $113 million of the state's $1.1-billion federal American Rescue plan windfall, p
Gov. Dan McKee on Thursday unveiled the details of his plan to spend $113 million of the state’s $1.1-billion federal American Rescue plan windfall, pitching bonuses for child care workers, money to build affordable housing and grants to small businesses.
The midyear budget proposal now heads to state lawmakers, who have been noncommittal on spending a chunk of the federal cash before deciding on a strategic plan to spend all of it.
“If we invest soon and invest wisely, we can continue to lead rather than follow, creating opportunities for Rhode Islanders as a result,” McKee said in a news release.
Aid to small businesses
As he promised in an editorial last month, McKee’s plan focuses on small business aid, child care and affordable housing.
And the biggest chunk of money, $45 million, would go to help small businesses, including a variety of grants and technical assistance programs. Of that total, $8 million would be set aside for grants to the tourism industry, $7.5 million for a new round of “Take It Outside” payments to help businesses operate outdoors and $2 million to the Rhode Island Airport Corporation.
“As we emerge from the COVID crisis, many of our small businesses are still struggling — or are concerned that the colder months will bring renewed hardship,” said Rhode Island Commerce Secretary Stefan Pryor.
Affordable housing construction
On housing, McKee proposed $15 million to supplement the $65 million bond voters approved this spring for affordable housing construction through Rhode Island Housing.
In the first round of applications for the $65 million pool of bond, money affordable housing developers asked for $54 million. The program typically includes three funding rounds and the initial level of demand, nearly exhausting the fund off the bat, shows the need for more money, Pryor said.
McKee also wants to spend $12 million of the federal money on acquiring land for future construction of shelters or housing for people without it. And the budget amendment includes $1.5 million for the Office of Housing and Community Development to provide “navigation and stabilization services to address the rise in pandemic-related homelessness.”
Raises for child-care workers
As he said he would, McKee has earmarked a big chunk of the money for pay raises –he describes as retention bonuses – for employees in privately run child-care centers and agencies that work with at-risk children.
That includes $12.7 million to cover semiannual bonuses of $1,000, for an estimated 8,200 full- and part-time employees of state-licensed child-care providers.
It was not immediately clear if this pay boost would also be available to the army of home-based home care providers affiliated with the Service Employees International Union.
But it follows legislative efforts earlier this year to aid the child-care industry by providing a total of $74.2 million, up from $67 million last year.
That included extra money to increase reimbursement rates for child-care centers beginning Jan. 1, 2022. The rate increases average 26% for school-age children, and between 16% and 23% for infants, toddlers, and preschool-age children.
McKee’s proposed pay boost comes in response to a pleas from the child-care industry for even more help keeping workers.
“Every day, we hear from the child-care providers in our community how difficult it has been to attract and retain staff for these essential jobs,” McKee said Wednesday at a media event. “Not only are child-care providers struggling to attract new staff, they are losing current staff who are leaving for jobs that can offer higher wages.”
A budget memo says the plan “also directly addresses critical needs resulting from labor shortages in the child-care industry. The child care industry provides an essential service to Rhode Island families, and the uninterrupted operation of child care providers is critical in getting Rhode Islanders in all industries back to work.
“When considering the benefit to the child care provider workforce, it should be noted that nearly all early childhood educators are women and women of color.”
McKee’s proposed spending package also included $300,000 to help pay the costs to open new Family Child Care provider sites, including $2,000 startup grants.
He has proposed $694.50-per-month raises for a second employee group as well: those earning less than $75,000 a year who work for the “direct-care providers” under contract with the Department of Children, Youth, and Families.
There are currently 37 DCYF-contracted service provider organizations employing up to 1,500 direct care workers whose wages would make them eligible for this wage supplement, according to the memo signed by new state Budget Officer Joseph Codega.
In a joint statement, Senate President Dominick Ruggerio and House Speaker K. Joseph Shekarchi said their fiscal staffs will begin reviewing McKee’s proposal to set up a “vigorous public review” in the respective finance committees.
“This will include consideration of the merits of the expenditures, the urgency of the need, and anticipated recommendations from other groups who have been studying the best use of these funds,” they wrote.