With a new budget season starting at the state level, Speaker of the House K. Joseph Shekarchi didn’t shy away from talking about Governor Dan McKee’s proposed tax cuts at Warwick Rotary Club’s Feb. 2 meeting.

McKee launched his budget three weeks ago, and the House of Representatives will soon begin a public process of examining each article and talking with directors about budget requests. Shekarchi explained the Governor proposed modest tax cuts that are based on a projected surplus of $600 million which the State House’s fiscal staff projected at its revenue conference in November. Since the current forecast is based on the first three months of the fiscal year (July, August and September), Shekarchi said the state will have a better snapshot of where they are at the second conference in May.

“We are running 5 percent ahead of expense revenues,” Shekarchi told Rotarians.

He hopes this continues and is glad that McKee proposed modest tax cuts. He added that in late December he met with the Blackstone Group and Top Economist at a legislative conference in New York City and the organizations spoke of the country heading for a recession. Shekarchi added that the federal government raised the interest rate again, which means revenues are going to decrease.

Along with tax cuts, housing is on top of the Speaker’s concerns. Shekarchi called housing  a critical problem and the state is taking steps toward addressing this. He noted that according to news reports that per capita the state has the fewest amount of new single family home construction in the country.

“That’s not a good thing. That says that our regulatory process is very bad, our land is very limited, people are not building new homes,” said Shekarchi.

Housing stock at every single level: high-end to market housing, workforce housing, low income housing and housing authority properties. He said the way to increase the supply of housing is to make it easier for the private sector to do it. Another way to address the problem includes possibly converting abandoned schools and creating more apartments.

He’s visited South Kingstown where he describes “a perfect location” to build more affordable housing for the elderly. He’s also spoken with Newport and Warwick Mayor Frank Picozzi about turning over the former school administration building on Warwick Avenue for housing.

The state made a historic investment of $250 million in the last budget, which was one quarter of the state’s American Rescue Plan Act (ARPA) money from the federal government. The government is looking at investments made last year and continuing to make sure the funds are spent and allocated in the way they are meant to. Shekarchi added that very little has been spent or allocated yet; he wants all housing authorities to build more housing.

“In this past year’s budget we allocated $10 million to housing authorities to build more housing. To build, expand, convert, construct. Since Feb. 2, zero dollars have been spent,” Sheakarchi said. “Not one housing authority has taken advantage of the $10 million available to them,” he said.

This money will come back to the state on June 30 and bereallocated.

Outside of housing, Shekarchi is also working with individuals on the investment of a bioscience hub for an area of unutilized land by I-95. The state received a grant from the federal government to move the Department of Health’s health lab over to the area. Shekarchi insisted that if it were moved to that area, the lab had to be part of a PPP (Public-Private Partnership) which would house the health lab and create wet lab space.

In the meantime, elected leaders are continuing to manage the state as it returns to normal in thec wake of the pandemic. Shekarchi said there are a lot of vacancies in DCYF as well as unfilled positions in the state. As for schools, Shekarchi would like to increase funding for education. He said there are a couple of legislators who want to have free lunch for everyone regardless of the need and have the state pick up the $75 million cost. Shekarchi said that money is not in the governor’s budget.