How Rhode Island Expenditures Compare: 2018 Edition

Rhode Island Public Expenditures Council

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How Rhode Island Expenditures Compare: 2018 Edition

PROVIDENCE, R.I. (December 2018) – RIPEC today released its annual report, How Rhode Island Expenditures Compare: 2018 Edition, which provides details on state and local government expenditures in fiscal year (FY) 2016, the most recent year for which national data are available. Using data released by the United States Census Bureau, the publication compares Rhode Island’s spending with that of the other 49 states and the national average. Two measures are used to make state-by-state comparisons 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 2016 with those in FY 2011 and FY 2006. To see the full report, click here

Total direct general expenditures in Rhode Island grew by 24.9 percent between FY 2006 and FY 2016, compared to a higher national growth rate of 38.7 percent in the same period. Regardless, the Ocean State remained in the top half of the nation’s highest spending states, exceeding the national average on both a personal income (21st highest) and a per capita (16th highest) basis. In the New England region, Rhode Island ranked 3rd highest on a personal income basis (after Vermont and Maine) and 4th highest per capita (after Vermont, Massachusetts, and Connecticut).

The fastest growing subcategory of total direct general expenditures in Rhode Island was environment and housing, which increased by 34.6 percent between FY 2006 and FY 2016, significantly outpacing the national growth rate of 23.8 percent. This increase was mainly due to a rise in natural resources and parks and recreations expenditures, which grew by 53.2 percent in Rhode Island between FY 2006 and FY 2016, compared to a national growth rate of 21.3 percent. 

Expenditures in education and libraries remained the largest contributor to state and local government spending in the Ocean State and the nation as a whole, accounting for 33.8 percent of Rhode Island’s direct general expenditures and 33.3 percent of national direct general expenditures in FY 2016. Rhode Island’s education and libraries expenditures increased by 25.4 percent between FY 2006 and FY 2016, 6.8 percentage points shy of the national growth rate of 32.2 percent. The Ocean State’s spending on elementary and secondary education remained among the highest in the country, ranking 11th on a personal income basis and 9th on a per capita basis in FY 2016. Within New England, Rhode Island’s spending on elementary and secondary education was the 2nd highest on a personal income basis after Vermont (ranked 4th nationally), and the 3rd highest on a per capita basis after Connecticut (ranked 5th nationally) and Vermont (ranked 6th nationally).  Notably, Rhode Island’s spending on elementary and secondary education exceeded that of Massachusetts, which ranked 38th highest on a personal income basis and 10th highest per capita.  In contrast, the state’s higher education expenditures ranked among the ten lowest spending states on both a personal income and per capita basis.  Within New England, Rhode Island’s higher education expenditures ranked 2nd lowest, exceeding only Massachusetts on a personal income basis, and Maine on a per capita basis.

Total social services and income maintenance expenditures remained a major driver of state and local government spending, accounting for 28.6 percent of Rhode Island’s total direct general expenditures in FY 2016. Total expenditures in this category grew in Rhode Island and nationally between FY 2006 and FY 2016, but the growth rate was substantially slower in the Ocean State relative to the national average (22.2 percent compared to 67.2 percent). In FY 2006, Rhode Island’s social services expenditures were well above the national average on both a personal income and per capita basis, but in FY 2016 its expenditures in this category were closer to the national average. By FY 2016, the state spent 5.3 percent less than the national average on a personal income basis (compared with 17.9 percent greater spending in FY 2006), and 4.0 percent less than the national average on a per capita basis (compared with 19.5 percent greater spending in FY 2006). Relatively slow economic growth likewise had an impact on Rhode Island’s national ranking in this category – between FY 2006 and FY 2016, the state went from 15th to 30th highest on a personal income basis, and from 7th to 27th highest on a per capita basis.

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 on both a personal income and per capita basis in FY 2016. The New England region had considerable variation in expenditures for transportation in FY 2016, with rankings on a personal income basis ranging from 5th highest (in Vermont) to 50th highest (in Connecticut).

Rhode Island’s FY 2016 total public safety expenditures remained in the top ten nationally, with fire protection expenditures once again ranked highest in the country on both a personal income and per capita basis. The Ocean State’s FY 2016 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.

Since FY 2006, Rhode Island’s environment and housing expenditures have moved to the top half of national rankings, placing 19th highest in terms of personal income and 15th highest in per capita terms in FY 2016, compared to 31st and 28th highest in FY 2006. Sewerage and solid waste accounted for the largest share of these expenditures, and were 14th highest in the country on a personal income basis and 12th highest on a per capita basis. 

Rhode Island’s expenditures in government administration and interest on general debt decreased by 6.6 percent between FY 2015 and FY 2016, but the state remained a relatively big spender in this regard, ranking 3rd and 5th highest in the nation on personal income and per capita bases, respectively. The Ocean State’s government administration expenses were greater than the national average on both bases in FY 2016, but its interest on general debt expenditures were particularly high in relation to the rest of the country. On a personal income basis, Rhode Island’s expenditures in this subcategory were the nation’s largest in FY 2016, exceeding the U.S. average by 55.1 percent and marking a 22.2 percent increase since FY 2006. On a per capita basis, Rhode Island’s interest on general debt expenditures were the nation’s 4th highest in FY 2016, surpassing the national average by 57.3 percent and revealing a ten-year growth rate of 59.4 percent.