State delegation warns of large structural deficit; housing, Medicaid, traffic top Middletown priorities

Middletown’s Town Council met with members of the town’s General Assembly delegation to set local legislative priorities for the upcoming session. State lawmakers and local officials discussed the state’s fiscal outlook, Medicaid‑driven costs, housing funding rules and local transportation concerns.

Senator Lou DePalma summarized the fiscal picture the legislature faces: “[W]e're probably looking to address a structural deficit in the several hundred million dollar range, 300 plus or minus some tens of millions.” He explained that Medicaid and education are the largest budget drivers and that Medicaid reimbursement rates and caseload changes have been major cost pressures.

DePalma and other delegation members urged towns to distinguish “necessary” proposals from “nice‑to‑have” requests when lawmakers draft the budget. The delegation said additional municipal aid is unlikely beyond prior commitments until the structural shortfall is addressed.

Housing was a central topic. Local councilors and state legislators discussed how state competitive housing funding currently favors larger, denser projects and urged Rhode Island Housing and the Department of Housing to adopt bifurcated criteria that would allow suburban and rural towns to compete on a different scale than urban areas. The delegation and town leaders raised the concept of accounting for “anchor institutions” — notably Naval Station Newport and other large local employers — when scoring housing applications so communities that host major employers get priority for workforce housing near jobs.

DePalma and representatives said the state has a 10 percent affordable‑housing goal and that new programs and bond funds (including a recently approved $120 million bond) will shape where money is directed this year. They urged Middletown to provide concrete examples of projects and to press for criteria changes that would create separate pots of funding for towns and cities.

Councilors also pressed the delegation on transportation and traffic issues. Councilor comments focused on chronic congestion on East and West Main roads and the potential to seek a DOT safety or traffic study for Aquidneck Island. Delegation members said infrastructure and economic development are linked, noting that connections near base gates and improved road access could be advanced through state‑federal coordination and assistance from the congressional delegation.

Rick McAuliffe, the town’s Washington lobbyist, briefed the council on federal funding prospects and said he and the congressional delegation have pursued earmarks and appropriations requests for town projects. McAuliffe also warned that potential federal defense realignment processes (BRAC) are a long‑term risk that would require local and congressional coordination to protect installations and the community’s economic base.

Local officials said they will deliver the council’s priorities — including housing criteria adjustments, school construction support, and requests for road safety studies — to the delegation for follow up in the legislature and with state agencies.