How Rhode Island Expenditures Compare: 2017 Edition

Rhode Island Public Expenditures Council

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How Rhode Island Expenditures Compare: 2017 Edition

PROVIDENCE, R.I. (November 2017) – RIPEC today released its annual report titled How Rhode Island Expenditures Compare: 2017 Edition, which provides details on state and local government expenditures in fiscal year (FY) 2015, the most recent year for which national data are available. The publication compares Rhode Island’s spending with that of the other 49 states and the national average using data released by the United States Census Bureau. Two measures are used to make comparisons between states in RIPEC’s report – per $1,000 of personal income and per capita. The report also provides a five- and ten-year historical perspective by comparing expenditures in FY 2015 to those in FY 2010 and FY 2005.  To see the full report click here.

Total direct general expenditures in Rhode Island grew nominally by 27.8 percent over the ten-year period of FY 2005 – FY 2015, compared to a higher national nominal growth rate of 41.4 percent in that same time period. Nonetheless, the Ocean State remained in the top half of the nation’s highest spending states, exceeding the national average on both a personal income (22nd highest) and a per capita (15th highest) basis. In the New England region, Rhode Island ranked third highest on a personal income basis (after Vermont and Maine) and fourth highest per capita (after Vermont, Massachusetts and Connecticut).

The fastest growing subcategory of total direct general expenditures in Rhode Island was government administration & interest on general debt, which increased by 47.1 percent over the 10-year period, significantly outpacing the national growth rate of 26.7 percent.  This increase was mainly due to the growth in interest payments, which grew nominally by 98.0 percent in Rhode Island between FY 2005 and FY 2015 (spending on government administration only increased by 13.3 percent nominally, over the same time period), compared to a growth rate of 30.3 percent nationally.  Rising interest payments in Rhode Island have had a significant impact on the state’s national rankings in this category – in FY 2005, the state’s spending on interest ranked 17th highest on a personal income basis and 15th highest per capita; by FY 2015, Rhode Island was ranked first highest on both a personal income  and per capita basis.

Expenditures in education & libraries remained the largest contributor to state and local government spending, accounting for 32.8 percent of Rhode Island’s direct general expenditures and 33.4 percent of national direct general expenditures in FY 2015. Rhode Island’s education and libraries expenditures increased by 29.7 percent between FY 2005 and FY 2015, 6.2 percentage points slower than the national growth rate (35.9 percent) for this category.  The Ocean State’s spending on elementary and secondary education remained among the highest in the country, ranking among the top ten highest spending states on a personal income and per capita basis in FY 2015.  By contrast, the state’s higher education expenditures ranked among the ten lowest spending states on both a personal income and per capita basis. 

Total social services and income maintenance expenditures remained a major driver of state and local government spending, accounting for around 30.0 percent of FY 2015 total direct general expenditures in both Rhode Island and the nation as a whole.  Total expenditures in this category continued to grow between FY 2005 and FY 2015 in Rhode Island and the country as a whole, but the rate of growth was substantially slower in the Ocean State relative to the national average (22.9 percent compared to 64.0 percent).  Historically, Rhode Island’s social services expenditures were well above the national average on both a personal income and per capita basis.  However, the relatively slower rate of expenditure growth in Rhode Island has brought the state’s spending closer to the national average in this category.  By FY 2015, the state spent 2.7 percent less than the national average on a personal income basis (compared with 18.0 percent greater spending in FY 2005), and 0.7 percent less than the national average on a per capita basis (compared with 19.5 percent greater spending in FY 2005).  Relatively slower growth likewise had an impact on Rhode Island’s national rankings in this category – between FY 2005 and FY 2015, the state went from 13th to 26th highest on a personal income basis, and from eighth to 20th highest per capita.

Rhode Island’s transportation expenditures  remained among the lowest in the country and well-below the national average, placing the state in the bottom ten nationally in FY 2015 and in FY 2005 on both a personal income and per capita basis. However, it is important to note that these data measure expenditures prior to the adoption of RhodeWorks in January 2016.  RhodeWorks is Rhode Island’s ten-year plan for rebuilding the state’s roads and bridges, and it includes a substantial increase in transportation funding through borrowing and the eventual tolling of bridges. The New England region had great variation in expenditures for transportation with rankings ranging from 3rd highest (in Vermont) to 50th highest (in Connecticut) on a personal income basis.

Rhode Island’s FY 2015 total public safety expenditures remained in the top ten nationally, with fire protection expenditures once again ranked first highest in the country on both a personal income and per capita basis.  The Ocean State’s FY 2015 police protection expenditures also remained in the top ten nationally, while corrections expenditures remained below the national average on both a personal income and per capita basis.

Rhode Island’s environment & housing expenditures have moved to the top half of national rankings since FY 2005, placing 20th highest in FY 2015 in terms of personal income and 18th highest in per capita terms (compared to 26th and 25th highest in FY 2005). The sewerage & solid waste subcategory of the environment & housing expenditures accounts for the largest share of these expenditures and was 7th highest in the country on a personal income basis and 5th highest per capita.