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McKee unveils plan to use $113m of Rhode Island’s ARPA funds

The governor recommended investments in small businesses, child care and social services, and affordable housing

Governor Dan McKee unveils a plan to spend 10 percent of the state's $1.13 billion of federal funds.Steven Senne/Associated Press

PROVIDENCE — Governor Dan McKee unveiled plans Thursday to spend 10 percent of Rhode Island’s $1.13 billion in American Rescue Plan by investing in small businesses, child care, and housing. His budget amendment, he said, was a “down payment” on Rhode Island’s economic comeback.

“We’re writing Rhode Island’s next chapter now,” said McKee. “If we invest soon and invest wisely, we can continue to lead rather than follow, creating opportunities for Rhode Islanders as a result.”

Investments in small businesses

His plan included approximately $32 million to go towards Rhode Island’s small businesses that have been hit hard by the COVID-19 pandemic. He said of this $32 million, about $12.5 million would go toward direct grants to provide immediate financial support to small businesses, with 20 percent of these funds going toward minority-owned businesses. About $10.5 million would go to small businesses’ technical assistance to help build and upgrade technical infrastructure, $7.5 million to increase outdoor activities, maintaining clean and safe business districts, and for public health improvements like HEPA filters and ventilation.

The plan also invests $13 million in federal funds from the state’s allocation of the State Fiscal Recovery Funds to support the recovery of the travel, tourism, and events industries. Of this, about $8 million will provide direct grants to support tourism, hospitality and travel, sports and recreation, arts and culture, and event businesses that either could not take advantage of previous opportunities for federal funding or require additional assistance.


Another $3 million will be used to fund sub-awards to intermediaries, including municipalities, chambers of commerce, business improvement districts, for initiatives such as public art installments, main street improvements, public or co-shared dining spaces, and outdoor performance venues.

The remaining $2 million would fund tourism marketing to be coordinated with the tourism regions and 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 Commerce Secretary Stefan Pryor.


Investments in child care, social services, and pediatric health care

The second pot of funds would invest in social support services and addressing the child care workforce shortage, said McKee’s office. It’s a $38.5 million investment in total where, as outlined in the budget, would recommend $12.7 million to provide retention bonuses of $1,000 per child care educator ever six months, up to $2,000 annually per recipient to full- and part-time staff of state-licensed child care providers in FY 2022. These bonuses, said McKee, are meant to increase attraction and retention of staff in the child care field.

“Working as an early childhood educator, social worker, or direct care staffer is a high-skill, but unfairly low-wage job. The majority of this workforce is made up of women– and many are women of color,” said Womazetta Jones, Secretary of the Executive Office of Health and Human Services. “All of our children and families deserve high-quality care options in their communities that meet their cultural and linguistic needs. This is an equity issue.”

The remaining $300,000 would provide startup grants to cover some initial costs and in-depth technical assistance to providers seeking to open new family child care sites.

McKee’s budget also recommends investing $12.5 million in funds to help provide workforce stabilization payments to the staff of the service provider organizations contracted by the Department of Children, Youth, and Families (DCYF). The funds will provide one-time supplemental wage payments (in Fiscal Year 2022 only) to recognize the extraordinary demands placed upon these essential workers. Only employees earning less than $75,000 would be eligible for supplemental wages and the proposal provides for a payment equal to $694.50 per month per eligible staff member and allows eligible employees to receive a full year of payments.


The budget also recommends $7.5 million for pediatric relief funding to help retain staff, extend hours, conduct enhanced outreach, and bring on additional family supports, such as social workers. An investment of $5.5 million for early intervention programming was also included, including $4.5 million for immediate stabilization grants and $1 million for performance-based bonuses. Performance bonuses would be based on targets that include retaining staff and reducing disparities in program engagement for Medicaid families and families of color, according to McKee’s office.

Investments in affordable housing, housing stability

Advocates had asked the state to consider a $500 million investment to go toward housing, but McKee shaved the number to about $29.5 million as an initial investment. His plan invests $15 million to incentivize the development and renovation of affordable housing. It would be targeted at assisting individuals with an income below 80 percent of area median income, according to McKee’s budget. And $12 million would go toward investing in property acquisition grants that would be administered by Rhode Island Housing.

About $1.5 million would invest in housing stability and mental health services for families and individuals experiencing homelessness and $500,000 would go toward temporary contract staffing support for the Office of Housing and Community Development. McKee also proposed that $500,000 to be allocated toward broadband coordination.


Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her @alexagagosz and on Instagram @AlexaGagosz.