Rhode Island — One Capitol Hill, Providence
Summary
This section, titled State Fiscal Changes and Actions, describes how Rhode Island supports elementary and secondary education through the Education Aid Funding Formula, enacted in FY 2010 and implemented in FY 2012. It says statewide student enrollment in March 2021 had decreased by 3,995 students compared to March 2020. It says the General Assembly enacted legislation to hold school districts harmless for FY 2022, which resulted in an increase of $39.7 million in FY 2022 aid. It also reports the Department of Revenue share of total state expenditures growing from 3.9 percent in FY 2018 to 5.9 percent in the FY 2022 Enacted Budget.
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Cite this document
“Rhode Island — One Capitol Hill, Providence.”
Original at www.ed.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-education-pdf-www-ed-gov-35c3da7ba8/
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CE O ANAGE EN UDGE
One Capitol Hill Office: (401) 574-8430
Providence, RI 02908-5890 Fax: (401) 222-6436
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State Fiscal Changes and Actions
State support for elementary and secondary education in Rhode Island is driven by the
Education Aid Funding Formula. This is an equity-driven formula whose principles include that
funding should follow the student and that community fiscal capacity and student need should
be weighted when determining the extent of state support. The Education Aid Funding Formula
was enacted in FY 2010, implemented in FY 2012, and funding education at the formula-
determined level is generally accepted as “full” state funding for education by local
stakeholders. The formula incorporates a wide range of factors, including a per-student core
instruction amount, a poverty factor adjustment to the core instruction amount, and a state
share ratio, which is calculated using municipal property values, median family income, and
student poverty status. These factors are used to calculate aid that each Local Education
Agency (LEA) receives, and all data elements are recalculated annually. Therefore, full funding
of Education Aid Funding Formula has, for the past decade, been the measure by which State
support for elementary and secondary education is measured in Rhode Island.
Since the onset of the COVID-19 Pandemic, Rhode Island has taken exceptional steps to
ensure that the direct and indirect impacts of the pandemic did not have an adverse fiscal
impact on state support for K--12 education. Rhode Island has experienced a statewide
decrease in student enrollment compared to pre-pandemic levels. In March 2021, statewide
student enrollment had decreased by 3,995 students compared to March 2020. Recognizing
the decrease in enrollment, the Rhode Island General Assembly enacted legislation to hold
school districts harmless from the impacts of the COVID-19 pandemic on student enrollment
for FY 2022. For FY 2022, school districts will receive aid based on student enrollment in
either March 2020 or March 2021, whichever is greater. For any community in which
enrollment was higher in March 2020, enrollment is adjusted for students enrolling in new
and expanding charter schools for FY 2022. This legislative change resulted in an increase of
$39.7 million in FY 2022 aid to Rhode Island public schools compared to the true funding
formula calculation.
As a result of the pandemic and other longstanding State policies, various funding shifts have
occurred across State-funded programs. Taken together, these shifts have resulted in a lower
proportion of state expenditures dedicated to education support compared to the baseline
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period, even though per-pupil and total education expenditures have steadily increased.
These expenditure shifts include:
In FY 2022, State support for non-education programs, such as municipal aid, is expected
to grow faster than funding for education compared to FY 2021 and the baseline period.
Rhode Island’s municipal aid is budgeted in the State’s Department of Revenue (DOR). In
FY 2018 DOR’s actual expenditures were 3.9 percent of total state expenditures, in the FY
2022 Enacted Budget DOR’s expenditures have grown to 5.9 percent of total
expenditures. The growth represents an increase of $106.8 million from FY 2018 to FY
2022. State-provided aid to municipalities is a substantial source of revenue for local
governments and indirectly supports the municipal share of education aid. The FY 2022
Enacted Budget appropriates $199.6 million in unrestricted aid to Rhode Island
municipalities The local education appropriation is the single largest expense for all Rhode
Island municipalities. Based on self-reported data, in FY 2020 on average the local
appropriation to education was 50.5% of a municipality’s total expenditures.
Eleanor Slater Hospital, a state-operated Long-Term Acute Care Hospital, is required to
have at least fifty percent of the patient census with a primary diagnosis of medical versus
psychiatric in order to maintain its Medicaid billing status. Since FY 2020, over fifty percent
of the hospital’s patient census has psychiatric primary diagnosis and as a result, the State
has been required to supplant the loss of Medicaid billing with general revenue
expenditures to maintain hospital operations. In FY 2022 it is projected that the inability
to bill Medicaid will result in additional state general revenue expenditures of
approximately $30.0 million.
While not education aid, the state has made significant investment in services for youth.
The FY 2022 Enacted Budget added 75 front line worker positions and $9.4 million in the
Department of Children, Youth, and Families (DCYF) to provide the necessary services to
Rhode Island’s children and needed for the Department to achieve accreditation.
The FY 2022 Enacted Budget includes an appropriation of $39.0 million in Rhode Island’s
Medicaid program as a contingency in the case the federal government ends the COVID-
19 public health emergency and the associated enhanced Federal Medical Assistance
Percentage (FMAP).
Included in the FY 2022 Enacted Budget is a $25.0 investment into a Housing Production
Fund to increase in the supply of affordable housing in Rhode Island over the long term.
The FY 2022 Enacted Budget includes an additional $52.0 million to finance existing
obligations made under the Rebuild Rhode Island Tax Credit program. The intention of this
investment is to pre-fund tax credits and sales and use tax exemptions which will be
redeemed over current and future fiscal years to avoid budget fluctuations.
Included in the FY 2022 Enacted Budget is an appropriation of $15.0 million to establish
a body camera grant program intended to supply state and local law enforcement officials
with body worn cameras.
In FY 2022 a contract negotiation was settled with State employees, included in the
contract was a cost-of-living-adjustment retroactively applied to July 1, 2020, which was
paid in FY 2022. This has resulted in approximately $17 million in the current year for
work performed in FY 2021. Furthermore, these retroactive payments for work performed
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in the prior fiscal year distort the State’s MOU calculation because they exclusively impact
non-education related expenditures, as the State does not directly finance local education
agency personnel. The contract was finalized after the enactment of the FY 2022 budget
and is not represented in the numbers below but will be included in the FY 2022 final
actual expenditures.
In order to meet the FY 2022 MOE requirement, based on education support appropriated in
the FY 2022 Enacted Budget, Rhode Island would need to reduce non-education expenditures
by $174,178,088. The chart below shows various non-education required investments
discussed above that are contributing to Rhode Island’s non-compliance with the MOE
provision in FY 2022.
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Rebuild RI Existing Commitments $52,000,000
Enhanced FMAP Contingency $39,000,000
Elanor Slater- Medicaid Supplantation $30,000,000
Housing Production Fund $25,000,000
Municipal Aid $16,000,000
Body Worn Camera Statewide Project $15,000,000
DCYF Accreditation Investments $9,000,000
0 0
Possible One-Time Transfers in FY 2022
Furthermore, while the FY 2022 expenditure actuals are not yet available, the Office of
Management and Budget projected an operating surplus of $618.4 million for Fiscal Year
2022. As a result, in addition to the shifts in state expenditures described above, the revised
FY 2022 budget will likely include substantial one-time expenditures as well as one-time
transfers to other state funds.
These transfers and set asides (1) would not necessarily be expended for their end use during
FY 2022 and (2) do not represent ongoing operating commitments. Rather, they are intended
to facilitate multi-year investments. Such transfers include:
$100.0 million transfer to the Rhode Island Capital Fund as state match through FY 2024
in anticipation of federal funds provided through the federal Infrastructure Investment and
Jobs Act. The federal law requires a state match for a wide range of transportation and
infrastructure projects that include roads, bridges, highways, and transit facilities, among
others.
$21.9 million as state match for the next two years to access federal funding available for
clean water and drinking water improvements
$62.0 million to pay down unfunded liabilities dating back to a financial downturn in 1991
and 1992 which resulted in deferred pension contributions.
$210.0 million transfer to the Rhode Island Capital Fund for state facility improvements
to help address longstanding deferred maintenance of state buildings and facilities. This
amount includes $108.2 million for construction of a new state-operated medical hospital.
4
$50.0 million for the state’s Information Technology Investment Fund, funding that would
be utilized over multiple years to implement necessary information technology projects,
such as a replacement of the Department of Labor and Training’s legacy mainframe with
a modern system for Temporary Disability Insurance and employer tax functions, as well
as an Electronic Medical Records Hospital Information System for the state-operated
Eleanor Slater Hospital.
Given that there are no assurances that the $618.4 million in FY 2022 surplus was
guaranteed to recur, these investments were deliberately chosen to defray past liabilities,
prefund anticipated liabilities and multi-year projects, and make targeted non-recurring
investments.
Bond Expenditures
In addition to education aid support, the state has supported several rounds of school
construction bonds, which provide pay-as-you-go funding to LEAs across the state improve
and replace school buildings across the state. While this is not included in the below general
revenue state education support totals, it does represent substantial state support for
education that continues to be accessed by municipalities in FY 2022.
In FY 2019, Rhode Island voters approved the Statewide School Construction Bond. The bond
activated access to $250 million in upfront funding to support the state share of foundation
school housing aid.
Furthermore, the FY 2023 Governor’s Recommended Budget proposes substantial additional
investments in K-12 and higher education, including:
A new tranche of $250.0 million in state borrowing to support the rehabilitation and new
construction of K-12 schools throughout Rhode Island. $200.0 million provides ongoing
support for the existing Statewide School Construction Bond program, mentioned above,
while the remaining $50.0 million capitalizes the Local Equity Initiative to finance smaller
dollar projects that make immediate improvements to health, safety, energy-efficiency and
learning spaces in existing school buildings. Combined with the $250 million bond
approved in FY 2019, Rhode Island anticipates investing $425.2 million to repair or
replace Rhode Island’s structurally deficient schools. The chart below highlights the
anticipated expenditures by fiscal year.
$50.0 million investment in the University of Rhode Island - Narragansett Bay Campus to
update and expand facilities at the school of oceanography, supporting research and
development in ocean-based renewables, marine trade and defense, and aquaculture and
fisheries
$12.0 million to upgrade and renovate Community College of Rhode Island facilities
While capital expenditures are not included as part of the higher education MOE calculation,
as described above the state has and will continue to make substantial capital investments
supporting both K-12 and higher education.
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FY 2021 MOE Requirement 1,133,662,523 178,712,614
FY 2021 Actual Support 1,258,710,734 189,309,003
Su p r I Ex ess Of FY 202 MOE Requireme $ 25 048 2 $ 0 596,389
In FY 2021 Rhode Island spent an additional $125.0 million in elementary and secondary
education support and an additional $10.6 in higher education support than what was
required by the MOE described in the CARES Act for FY 2021. The FY 2022 Enacted Budget
represents an increase in both elementary and secondary education and higher education
support compared to FY 2021 expenditures. Rhode Island has continued to increase
investments into public education but needed investments in other areas of state
expenditures, and financing of pre-existing commitments, have resulted in Rhode Island
failing to meet the proportional requirement of the MOE.
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y s o
While FY 2022 expenditure actuals have yet to be finalized, the below data for FY 2022 shows
the appropriated funding level included in the FY 2022 Enacted Budget. The level of support
for both K-12 education and higher education represent increases from the prior fiscal year.
K-12 Education
Rhode Island’s education support consists of seven distinct programs. For context, a
description of each program is as follows:
Education Aid. Primarily driven by the Education Aid Funding Formula, an enrollment and
means based formula, distributed to Local Education Agencies (LEAs or districts) to
finance the state’s portion of education expenditures. Other “categorical” funding is also
included within this program includes additional support for “Multilingual Learners” and
“High-Cost Special Education,” among others.
Central Falls School District. Primarily driven by the Education Aid Funding Formula, state
budget presentations itemize this aid separately as the state provides full financial support
for the operations of the Central Falls School District.
Davies Career and Tech. Primarily driven by the Education Aid Funding Formula, Davies is
a state financed and operated career and technical school.
Met. Career and Tech. Primarily driven by the Education Aid Funding Formula, the
Metropolitan Career and Technical School is a state financed career and technical school.
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RI School for the Deaf. Financed outside of the Education Aid Funding Formula, the RI
School for the Deaf (RISD) is financed and operated by the State.
School Construction Support. A means-based reimbursement program, distributed on a
sliding scale determined though fiscal capacity, financing portions of LEA construction
projects.
Teachers’ Retirement. Distributed as a reimbursement to LEAs for the State’s portion, or
40.0 percent, of the employer’s portion of retirement costs.
RI S e Su p r for Elem ry a d Se d ry E u a io : G er l Reve ue
Y 0 G
Y 0 Y 0 2
Education Aid 986,771,773 1,023,707,116 36,935,343
Central Falls School District 45,109,045 47,702,746 2,593,701
Davies Career and Tech. 13,717,317 14,437,904 720,587
Met. Career and Tech. 9,342,007 9,342,007 -
RI School for the Deaf 6,881,155 7,402,627 521,472
School Construction Support 80,000,000 80,000,000 -
Teachers' Retirement Program 116,889,437 123,916,166 7,026,729
a S $ 4 $ 06 50 56 $47 ,
The FY 2022 Enacted Budget represents an increase of $47.8 million compared to the FY
2021 actual expenditures. The enacted budget includes financing to hold school districts
harmless from the impacts of the COVID-19 Pandemic on student enrollment for FY 2022, an
exceptional policy decision made to maintain a high level of local education support. Student
enrollment in the 2020-2021 academic year decreased compared to the 2019-2020
academic year, and the updated enrollment data would have otherwise resulted in a reduction
of $39.7 million in aid compared to the Recommended Budget.
Higher Education
c c Y r w
Y Y 2 r Y2 2
RI Promise Scholarship 7,124,956 17,275,838 10,150,882
University of Rhode Island 77,752,796 84,745,516 6,992,720
Rhode Island College 52,172,385 55,818,736 3,646,351
Community College of RI 52,258,866 52,427,080 168,214
0 0 0 7 0 2 ,
The FY 2022 Enacted Budget represents an increase of $21.0 million compared to the FY
2021 Enacted Budget. This includes the unrestricted state appropriations to the University of
Rhode Island, Rhode Island College, and the Community College of Rhode Island, and the
general revenue-funded Rhode Island Promise scholarship for qualified students to attend
CCRI tuition-free. The FY 2022 Enacted Budget includes $9.6 million in new general revenue
8
expenditures to support last dollar scholarships, previously financed by tuition savings fees
and federal loan reserve funds.
. S K 2 r
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While the actual FY 2022 expenditures have yet to be finalized, the below data for FY 2022
shows the appropriated funding level included in the FY 2022 Enacted Budget.
K-12 Education
Rhode Island has consistently increased elementary and secondary education support
compared to the previous fiscal year. Again, Rhode Island is requesting a waiver of the
Maintenance of Effort provision because other areas of the State Budget, primarily municipal
aid, are increasing at a faster rate than elementary and secondary education. Rhode Island
did not enact a reduction in elementary and secondary education in FY 2022.
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FY 2017 -
FY 2018 4.4%
FY 2019 2.2%
FY 2020 0.7%
FY 2021 7.2%
FY 2022 3.8%
(please see additional table on page 10)
Higher Education
Rhode Island has increased support for higher education in every year except FY 2020. In FY
2020, Rhode Island reduced state support for its public institutions by $16.4 million in order
to balance the budget while facing severe reductions in revenue forecasts. The decrease in
state support was compensated for by using $29.5 million in Higher Education Emergency
Relief HEER fund support as part of the federal CARES Act. The state increased its support for
higher education in FY 2021 while also allocating $23.0 million from the Coronavirus Relief
Fund to higher education institutions to help mitigate the costs of the ongoing public health
emergency.
c
c Y
G
FY 2017 -
FY 2018 3.2%
FY 2019 4.5%
FY 2020 -3.2%
FY 2021 5.4%
FY 2022 9.2%
(please see additional table on page 10)
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S c t
7 2 2 2 2 2
Education Aid 845,554,141 890,183,384 910,052,920 912,534,888 986,771,773 1,023,707,116
Central Falls School District 39,100,578 39,878,367 40,752,939 40,400,856 45,109,045 47,702,746
Davies Career and Tech. 12,590,092 13,399,536 13,647,518 13,429,495 13,717,317 14,437,904
Met. Career and Tech. 9,342,007 9,342,007 9,342,007 9,025,651 9,342,007 9,342,007
RI School for the Deaf 6,171,223 6,287,495 6,570,336 6,659,049 6,881,155 7,402,627
School Construction Support 80,000,000 80,000,000 80,000,000 79,664,215 80,000,000 80,000,000
Teachers' Retirement Program 100,358,782 102,157,673 106,256,564 112,916,232 116,889,437 123,916,166
3 $ 6 6 6 2 $ 7 3 7 $ 6 6
t
2 Y2 2 2 2 2 2
RI Promise Scholarship - 3,006,655 5,578,442 6,830,194 7,124,956 17,275,838
University of Rhode Island 76,137,630 77,929,815 80,567,459 78,741,738 77,752,796 84,745,516
Rhode Island College 46,996,330 47,903,024 48,845,064 47,805,887 52,172,385 52,208,155
Community College of RI 48,936,035 48,709,247 50,528,140 46,280,079 52,258,866 52,427,080
or 9 7 54 74 $ 6
10
S K 2 d d c c
c o
While the actual FY 2022 expenditures have yet to be finalized, the below data for FY 2022
shows the appropriated funding level included in the FY 2022 Enacted Budget.
K-12 Education
Y a
FY 2017 141,278
FY 2018 141,426
FY 2019 142,306
FY 2020 142,202
FY 2021 142,361
FY 2022 138,366
Rhode Island’s education Funding Formula is based on the March resident daily average
membership enrollment data from the March prior to the start of the fiscal year. For example,
the FY 2017 Funding Formula appropriations is based on the resident daily average
membership in March 2016. The above chart shows Rhode Island’s enrollment by fiscal year.
As noted above, Rhode Island’s student enrollment in FY 2022 has decreased compared to
pre-pandemic levels. In order to continue to provide the highest level of education support,
the FY 2022 Enacted Budget finances local education support for each school district on
student enrollment in either March 2020 or March 2021, whichever is greater.
o a G (
E ed E ted FY 2022 Grow
Y2 2 Y 2 Y
Education Aid+ 6,931 7,399 467
Central Falls School District* 16,042 18,015 1,973
Davies Career and Tech.* 15,500 16,168 668
Met. Career and Tech.* 11,977 11,519 (458)
RI School for the Deaf* 90,542 93,704 3,163
School Construction Support+ 562 578 16
Teachers' Retirement Program+ 821 896 74
8 842 ,4 6
+ Per Pupil Expenditures represent statewide enrollment
* Per Pupil Expenditures represent the specific LEAs enrollment
On a per pupil basis the FY 2022 Enacted Budget increases education aid compared to FY
2021, except for the Met. Career and Tech School which was level funded compared to FY
2021, resulting in a slight decrease in per pupil spending for that specific program.
11
Fis al Y Ed i p G
FY 2017 -
FY 2018 2.3%
FY 2019 7.9%
FY 2020 -3.4%
FY 2021 7.9%
FY 2022 10.4%
Rhode Island has increased support for higher education compared to the previous fiscal year
on an FTE enrollee basis in every year except FY 2020. Note that the first chart above includes
the RI Promise Scholarship in the Total Support line but does not break it out separately.
8 p p d o K 2 h
a
K-12 Education
Rhode Island appropriates K-12 education and higher education funding on an annual basis.
As a result, no funding for future fiscal years has been appropriated. The Governor’s FY 2023
Recommended Budget represents a $40.1 million increase in education support compared
to the FY 2022 Enacted Budget. Similar to FY 2022, the Governor has recommended a
transition fund to hold school districts harmless from any loses in aid produced by the FY
2023 funding formula calculation.
Higher Education
Rhode Island appropriates K-12 education and higher education funding on an annual basis.
As a result, no funding for future fiscal years has been appropriated. The Governor’s FY 2023
Recommended Budget represents an increase of $5.7 million increase in appropriations to
higher education. The recommended increase includes a total increase of $15.3 million to
Rhode Island’s 3 public higher education institutions offset by a decrease of $9.6 million for
the RI Promise last dollar scholarship. Available non-general revenue funds are able to support
the scholarship’s expected expenditures in FY 2023, and general revenue financing is not
needed next fiscal year.
G o
r
Neither the FY 2022 Enacted Budget nor the FY 2023 Governor’s Recommended Budget uses
ESSER, GEER or HEER funding to replace state funding for education. However, in FY 2020,
there were shifts between funding sources for elementary and secondary education as well
as higher education that resulted in a net increase in funding, as described below.
K-12 Education
In FY 2020 Rhode Island faced a substantial end-of-year budget deficit, as the public health
emergency had dramatically decreased state revenues. In order to resolve this deficit, the
state took several actions which ultimately provided $50.0 million (all funds) in additional
education aid to its Local Education Authorities (LEAs – school districts, public charters, and
14
state schools) when compared to the original enacted budget of the same year. This was
accomplished by taking the following actions:
An additional $41.7 million distributed to LEAs through the Elementary and Secondary
School Emergency Relief (ESSER) Fund program as part of the federal CARES Act. These
funds were distributed according to federal rules in proportion with each LEA’s federal Title
1, Part A distribution.
An additional $50.0 million distributed to LEAs from the Coronavirus Relief Fund as part
of the federal CARES Act. This funding was distributed in proportion as ESSER funding and
were spent in accordance with federal guidance.
A $41.7 million reduction in state funding formula aid in proportion with ESSER funding.
Higher Education
In FY 2020, Rhode Island reduced state operational support for its public institutions by $16.4
million compared to original enacted budget. This reduction was distributed by institution as
follows:
University of Rhode Island: ($7.0 million)
Rhode Island College: ($4.0 million)
Community College or RI: ($5.4 million)
In the same year, FY 2020, the institutions received $29.5 million in Higher Education
Emergency Relief HEER Fund support as part of the federal CARES Act. These funds were
distributed by institution as follows:
University of Rhode Island: $11.2 million
Rhode Island College: $7.8 million
Community College or RI: $10.5 million
Finally, in FY 2021, the institutions were allocated an additional $23.0 million in Coronavirus
Relief Fund financing to help mitigate additional operating costs of the public health
emergency. These funds were distributed per institution as follows:
University of Rhode Island: $14.0 million
Rhode Island College: $4.0 million
Community College of RI: $5.0 million
v ve b p v
K 2 s a o a d b ac x
S K 2 d c d
The Governor’s Recommended Budget does not replace existing State commitments with
unallocated ESSER or GEER funds.
o b p
p x t t r o
The Governor’s Recommended Budget does not replace existing State commitments with
unallocated HEER funds.
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