R.I. Foundation recommends spending state’s ARPA funds on housing needs, substance abuse, mental health

The state needs to correction issues residents faced long before the COVID-19 pandemic, the foundation’s president and CEO said

The Rhode Island State House in Providence.Lane Turner/Globe Staff

PROVIDENCE — Lawmakers in Rhode island are about to meet in committee hearings to develop ways in which Governor Dan McKee’s administration can spend the state’s $1.13 billion in federal dollars. Many observers have called it a “once in a lifetime” opportunity, and Neil Steinberg, president and CEO of the Rhode Island Foundation, says it needs to be used to help correct issues the state faced long before COVID-19.

“In the beginning of the pandemic, there was a lot of talk about getting back to the ‘old normal.’ We pushed back on that because the ‘old normal’ left too many people behind,” Steinberg said as he unveiled the Foundation’s recommendations on how to use the state’s American Rescue Plan Act funds Monday night.

Earlier this year, the Foundation contracted with the Economic Progress Institute (EPI) and the Rhode Island Public Expenditure Council (RIPEC) and convened a 15-member Steering Committee to develop a set of spending recommendations.

The Steering Committee included Marcela Betancur, executive director of the Latino Policy Institute; Jessica David, founder and principal at Good Worth Working For; Marie Ganim, Rhode Island’s former Health Insurance Commissioner; Ross Gittell, Bryant University president; Tony Maione, former CEO and president of the United Way of Rhode Island; and Dr. Megan Ranney, an emergency medicine professor and associate dean of Brown University’s School of Public Health; among others.

After meeting 15 times, the committee offered a report detailing $1.065 billion in potential investments aimed at helping residents disproportionately impacted by COVID-19, low-income residents, and communities of color.

The recommendations included $405 million to address the state’s decades-long acute shortage of housing for those with low-to-moderate incomes, $255 million for mental health and substance abuse challenges, $205 million for workforce development, $100 million for small business assistance, and $50 million for neighborhood trusts and non-profits that provide immediate assistance to Rhode Islanders struggling with a variety of issues. They also recommended that the state to develop a cabinet-level oversight office to help administer and oversee the distribution of these funds.

The report did not make recommendations for uses of other ARPA earmarked funds, such as those for local cities and towns ($542 million), K-12 education ($400 million), higher education ($165 million), or the capital project fund ($113 million). Steinberg said the recommendations also did not include broadband or infrastructure initiatives; instead, he said, he hopes more dollars will soon come from newly passed federal policies.

Neil D. Steinberg, president and CEO of the Rhode Island FoundationConnie Grosch for the Rhode Island Foundation.

“All of [these issues] pre-date COVID. COVID just made everything worse,” said Steinberg. “We don’t want to sit here in five years wondering what happened to that billion dollars. We also don’t want to be sitting here in two years wondering why the money isn’t going out the door.”

“This isn’t ‘just do it.’ This is ‘let’s make the plans to do it right,’” said Steinberg.

Here are details about the foundation’s recommendations.

Housing: $405 million

The report detailed how there has been a “decades-long acute shortage of housing” throughout the state, especially for those with lowto moderate incomes. According to Linda Katz, co-founder and policy director of the EPI, the goal of this recommendation was to increase affordable housing options by investing in affordable rental housing, permanent supportive housing, and homeownership opportunities.

If the investments are made correctly, she said, they could help the state “end homelessness.” But spending the money immediately could also mean bringing the general assembly back for an emergency session, so it would be up to lawmakers to prevent families and children from having to sleep outside as winter approaches.

Recommendations include:

• Invest 4100 millionto remediate lead paint for at least 2,850 units and renovate or repair code violations for at least 400 homes.
• Invest $200 million in affordable rental housing production and preservation.
• Invest $50 million to build 500 units of permanent supportive housing and provide temporary housing for targeted populations.
• Invest $50 million to expand first-time home buyer programs to increase home ownership for BIPOC populations.

Behavioral health: $255 million

This investment would reduce emergency department visits for children and adults experiencing acute behavioral health crises by 20 percent each, and would decrease the number of unintentional opioid overdoses and suicides by 15 percent each. The committee also said it was crucial to increase the number of licenses for outpatient mental health counselors, social workers, psychologists, and psychiatrists.

Recommendations include:

• Invest $170 million to build new facilities and renovate and upgrade existing facilities.
• Invest $50 million in technology infrastructure, including electronic medical records and other non-facility infrastructure.
• Invest $30 million to increase provider capacity through a loan forgiveness program, which could include stipends and bonuses. The program, the committee said, should target BIPOC populations to “build a culturally and linguistically diverse behavioral health workforce.”

Workforce Development: $205 million

Nearly every industry in Rhode Island is facing a serious staffing crisis. In other situations, residents remain unemployed or underemployed because of barriers to employment, such as a lack of affordable child care.

Steinberg said it’s important to also identify employees in hard-hit industries and those who earned low wages previously to help train to transition them to better-paying positions and industries.

Recommendations include:

• Invest $150 million in high quality “earn and learn” job training programs that lead to a promotion, certificate, academic credential, and higher salary.
• Invest $30 million in accessible adult education and foundational workforce skills, which include English-language, literacy, and digital skills.
• Invest $15 million for one year to continue and expand the Rhode Island Reconnect initiative, which provides assistance to individuals to mitigate barriers for them to participate in job training or employment opportunities.
• Invest $10 million in IT data structure improvements to the state’s data system.

Small business; $100 million

Michael DiBiase, president and CEO of the RIPEC, who is a small business owner himself, said small businesses are the “backbone” of the state’s economy.

The committee said it would like to provide “significant financial assistance to at least” 2,250 small businesses, with a special focus on minority-owned businesses.

Recommendations include:

• Invest $50 million in small businesses and cooperatives through forgivable grants.
• Invest $35 million to provide technical assistance to small businesses by awarding one-time grants for business services through a newly established business resource network.
• Invest $10 million to create a Community Development Financial Institution or expand capacity of one or more existing CDFI’s to provide financing for projects in “distressed or underserved neighborhoods.”
• Invest $5 million to establish a loan program for certified Minority Business Enterprises.

Neighborhood Trusts and Immediate Relief: $100 million

Recommendations include:

• Invest $50 million for the creation of neighborhood trusts in Qualified Census Tracts.
• Invest $50 million in nonprofit organizations to provide immediate relief to those suffering behavioral health disorders, economic, food and housing insecurity, lack of affordable childcare, and domestic violence.