2026-38 Resolution of the Council Urging Full Funding of the School Housing Aid Program.

RESOLUTION URGING FULL FUNDING OF THE SCHOOL HOUSING AID PROGRAM

WHEREAS: The State of Rhode Island has historically partnered with municipalities to support investments in public school infrastructure through the School Housing Aid Program pursuant to R.I. General Laws §§ 16-7-35 through 16-7-47; and

WHEREAS: Rhode Island General Laws, including R.I.G.L. § 16-7-41, structure Housing Aid to align reimbursement with annual principal and interest payments on school construction debt, thereby providing predictability for municipal financial planning; and

WHEREAS: Municipalities rely on timely and consistent Housing Aid reimbursements to responsibly structure long-term borrowing and manage debt service obligations; and

WHEREAS: The Governor's Recommended FY 2027 Budget proposes changes that would reduce or defer Housing Aid payments through multi-year reimbursement mechanisms, including provisions contemplated under R.I.G.L. §§ 16-7-41 and 16-7-45; and

WHEREAS: The Governor's proposal effectively reduces Housing Aid payments in FY 2027 by approximately $8 million to $15 million statewide, depending on the method of implementation, by utilizing cash flow mechanisms that defer payments into future fiscal years; and

WHEREAS: Such cash flow mechanisms, while not reducing total aid, disrupt the alignment between state reimbursement and municipal debt service, creating uncertainty and potential financial risk for municipalities; and

WHEREAS: The Town of Middletown has made a significant financial commitment to invest in new school buildings, representing one of the largest capital investments undertaken by the Town; and

WHEREAS: Middletown taxpayers are directly impacted by these borrowing decisions and are sensitive to uncertainty in state reimbursement policies that affect local financial obligations; and

WHEREAS: The Town is actively structuring its debt issuance and repayment schedules to maintain stable and predictable annual debt service payments, and variability in Housing Aid reimbursement timing undermines this effort; and

WHEREAS: Uncertainty in state funding introduces challenges in the Town's budget development process and may result in increased costs or financial strain on local taxpayers; and

WHEREAS: The School Housing Aid Program is intended to ensure that