pledged to build 20,000 homes

Gov. Dan McKee and his Democratic rival, Helena Buonanno Foulkes, agree on at least one point this campaign season: Rhode Island’s highest earners need to pay more in taxes.

What they still don’t agree on is where that new revenue should go.

The governor’s plan to add a 3% surtax on state income over $1 million isn’t big on details, just that it would go to the state’s general fund. The former CVS executive who lost to McKee by 3 percentage points in the 2022 primary wants to see all that money go toward the production of 20,000 homes and apartments across Rhode Island over the next eight years.

That’s according to her housing plan unveiled Monday. In it, Foulkes officially backed the growing call among members of Rhode Island’s Democratic party to enact an 8.99% tax rate on personal income of more than $1 million.

Foulkes’ campaign projects a millionaire’s tax would bring in more than $1 billion over eight years — money she wants placed in a “Rhode Home Program” revolving fund that would  recoup investments through rents or sales once the housing is completed, according to the policy outline.

“It’s a bold plan that will make a big difference for Rhode Islanders,” Foulkes said in an interview. “This was always the beauty of Rhode Island — that you could afford to live here.”

To ensure that millionaire’s tax revenue is used solely toward housing, Foulkes called for a constitutional amendment to place that money in a protected reserve. The reserve would be audited by an independent inspector general — an office lawmakers on both sides of the aisle have sought to create over the years. 

“If you’re doing all the right things, you shouldn’t be afraid of having someone come in and look inside and make sure that all the money you’re spending is really going to the people who need it,” Foulkes said in an interview. 

In addition to funding construction of typical low income and middle income homes, the revolving loan program would finance accessory dwelling units, incentivize prefabricated or modular construction, and restore state funding for Rhode Island’s Historic Preservation Tax Credit.

Foulkes’ plan also calls for 5% of funding from the Rhode Home Program to go toward rent relief. 

Last year marked the first time a median renter could not afford an average two-bedroom apartment anywhere in the state, according to the 2025 factbook published by HousingWorks RI, the housing policy research group based at Roger Williams University.

“Rhode Islanders are struggling with rent in the short term,” Foulkes said. “The Rhode Home Program will set aside dollars for immediate rent support for families in need who cannot wait years for prices to come down to afford housing now.”

Funding for rental support will decrease as prices come down and more homes get on the market, according to the policy outline.

Foulkes’ plan also vows to further cut the red tape state leaders have repeatedly blamed for the lack of home construction across Rhode Island. 

“These eyesores can turn into housing, reducing crime and putting this land to productive use generating additional revenue for the state,” Foulkes said. “If someone is willing to take a risk on a project like this, they will have an advocate in the governor, and we will work together to ensure that red tape doesn’t keep housing from being built.”

But not every town wants large-scale developments.

The town of Johnston is battling in court to stop a proposed 252-unit apartment complex after Mayor Joseph Polisena Jr., a Democrat, tried to use eminent domain to seize the site for a public safety complex. The Westerly Planning Board nixed a plan to construct 2,300 homes at Winnapaug Country Club — a decision upheld by a Superior Court judge last September.

Foulkes said she would focus funding on resources in “communities that want to partner to build.”

“I’m a big believer that when you’re trying to create big change, lean into the people who want it first,” she said in an interview. “There’s ways to address needs in all these towns, but the thing we have to produce is 20,000 new units — we have to move fast, we don’t have time to waste.”

Should more young and middle income people move to towns on board with development, Foulkes said those naysayer communities may be more likely to hop on board with her housing plan.

Everybody’s a critic

McKee’s campaign called Foulkes’ plan to tax the rich a “copy and paste” of his own affordability agenda and attacked the housing proposal as “lackluster.”

“Governor McKee isn’t governing in concepts — he’s been rolling up his sleeves and getting housing built, passing the largest housing bond in state history in 2024 and proposing another $120 million housing bond in this year’s budget,” Christina Freundlich, a spokesperson for McKee’s campaign, said in a statement late Monday morning.

Foulkes laughed off those comments.

“There’s nothing about this that’s a copycat,” she said. “We have a long way to go to really meet the needs of Rhode Islanders. My advice to the governor is to read my plan.”

But even the progressive tenant organizing group Reclaim RI questioned Foulkes’ plan. 

Co-founder Dan Denvir said the group was concerned over a citation in Foulkes’ proposal to “jumpstart the redevelopment of substandard public housing into mixed-use and mixed-income housing.” 

Her plan includes a link to a Jan. 28 New York Times opinion piece detailing the positive impacts of the federal HOPE VI program of the 1990s, which saw the government invest $17 billion to replace 262 high-poverty public housing projects across America. But Denvir said the program led to a “major net reduction in total public housing units available to the poorest Americans.”

Another alarm for Denvir was a lack of just cause eviction protection for tenants in her proposal to enact a Tenants Bill of Rights — something Reclaim RI has long advocated for.

“If Foulkes is going to adopt the language of our proposal, she should adopt its substance as well,” Denvir said.

Foulkes’ plan aims to protect renters by “holding bad landlords accountable, protecting tenants’ rights, and requiring full rental fee transparency.” That includes utilizing the state attorney general’s office to aggressively target negligent landlords who fail to meet their legal obligations, along with prohibiting property owners from using “unfair and anti-consumer” algorithmic pricing to raise prices on renters.

Still, Denvir said Foulkes’ proposal for a revolving loan fund could lead to “a significant investment in public development of housing.”

“It’s beyond clear that the private sector cannot solve Rhode Island’s housing crisis on its own,” he said.

Republican gubernatorial hopeful Aaron Guckian, too, was critical of Foulkes’ plan — namely her choice to back a millionaire’s tax as the way to spur production.

“Rhode Islanders are already paying so many taxes and fees,” Guckian said in a statement. “People feel it everywhere, permits, registrations, fines, and even speed cameras. At some point, government has to stop looking for new revenue and start working smarter.”

Business groups have similarly opposed the proposed tax, warning it could stifle Rhode Island’s economic growth. The Greater Providence Chamber of Commerce in January posted a joint commentary with the Rhode Island Public Expenditure Council (RIPEC) that “jobs, opportunities and affordable homes will be in states with more reasonable tax rates.”

RIPEC President and CEO Michael DiBiase said Monday his organization was disappointed to see the proposed tax as part of Foulkes’ housing plan.

“Rhode Island does not have a revenue problem — it has a spending problem in that we continue to desire to spend beyond our means,” he said in an email to Rhode Island Current. “A tax on high earners would disadvantage small businesses and hurt Rhode Island’s ability to attract and retain business activity and investment.”

Foulkes told Rhode Island Current she’s more worried that not enacting the tax could lead to more middle class residents out of the state and that it would actually be good for businesses.

“Often I hear from small businesses and even big businesses that it’s very hard for them to recruit people here because people look at what they’ll be making in salary relative to the cost of finding an apartment to rent or a home to buy” she said. “It’s really gotten out of whack.”

Prospective voters seem to agree. A poll released Feb. 24 by the University of New Hampshire found two-thirds of those surveyed supported McKee’s budget proposal to include a millionaire’s tax.

At a time when the wealthiest people in the country — and Rhode Island — are benefiting from the Trump administration’s federal tax cuts, Foulkes said wealthy Rhode Islanders should pay their fair share to make the Ocean State more affordable.

“By using the revenue from the millionaire’s tax, we will be able to save on financing costs and invest even more in housing without making Rhode Islanders struggling with the cost of housing pick up the tab,” she said.