Rhode Island Gov. Dan McKee has included a reduced gas tax as part of his Fiscal Year 2027 budget request.
McKee is proposing to repeal the two-cent gas tax increase passed by state’s General Assembly last year. It’s a move he said will save Rhode Islanders an estimated $9 million.
“Last year, I chose not to sign the budget presented to me by the General Assembly due to its unnecessary cost increases on taxpayers, including an increase in the state gasoline tax,” McKee said. “Now, residents and businesses are struggling even more with the rising costs of gas. My ‘Affordability for All’ agenda focuses not on outside factors outside of our immediate control—such as the War on Iran—but on areas we can control, including reducing the state gas tax, eliminating the state social security tax, and addressing the portion of energy bills that represent state taxes and programs.”
McKee made his remarks during a press conference at Wakefield’s Pier Cleaners. Owner Larry Fish said 50 percent of his business is laundry pick-up and delivery services, and that the company spent an estimated $60,000 on gasoline last year.
The move is supported by the RI Commerce Corporation that said the gas tax reduction would help small businesses.
“Commerce supports efforts that help reduce the cost burden on businesses,” Jim Bennett, president and CEO of RI Commerce Corporation, said. “Governor McKee’s proposed reduction of the gas tax is a meaningful step toward lowering operating expenses and strengthening Rhode Island’s business climate.”
Jane Cole, interim director for the RI Department of Revenue, said the reduction in gas tax would not negatively impact the state’s budget, noting that the state paid off Motor Fuel bonds with the existing tax, and that with that debt paid off, the state would not feel any budgetary shortfall without it.