PROVIDENCE R.I. (October) – Today RIPEC released its annual report: How Rhode Island Revenues Compare, which provides details on state and local government revenue sources from fiscal year 2011, the latest year for which national data are available. The publication compares Rhode Island’s fiscal system with those of the other 49 states and the national average using data released by the US Census Bureau. To see the full report, click here.
Changes in revenue collections between FY 2007 and FY 2011 for the US and Rhode Island, as measured on a per capita basis, outline the impact of the recession on national and state revenue. Though total revenues declined at the beginning of the recession (FY 2007 through FY 2009) by 33.8 percent nationally and 33.1 percent in Rhode Island, revenues began increasing in FY 2010. By FY 2011, total per capita revenues increased by 8.5 percent nationally and by 14.3 percent in Rhode Island over FY 2007 levels. This increase in Rhode Island was driven by increases in property tax revenue collections (a 16.7 percent increase), and intergovernmental revenues (a 39.1 percent increase). Property taxes and intergovernmental revenues also increased nationally during this time period, but by smaller percentages (11.9 percent and 34.3 percent, respectively).
State and local governments in Rhode Island collected $12.7 billion in FY 2011, approximately $700 million (1.0 percent), higher than FY 2010 revenues, whereas national state and local FY 2011 revenue collections of $3.4 trillion were $0.2 trillion (6.2 percent) more than FY 2010 collections. A significant contributor of the state and national overall increase was related to growth in insurance trust fund revenues (e.g. public employee retirement systems, unemployment compensation, state workers’ compensation systems), which increased by $533.8 million in Rhode Island, and $147.7 billion nationally—both increases of 28.6 percent. In contrast, Rhode Island state intergovernmental revenue decreased by 5.0 percent from FY 2010 to FY 2011, while it increased by 3.7 percent nationwide.
Rhode Island’s FY 2011 total tax burden remains among the highest in the country, ranking 14th highest as a share of personal income and 13th highest on a per capita basis. Although Rhode Island moved down in the national rankings when tax burden was measured as a share of personal income, year-over-year tax collections increased from $113.98 per $1,000 of personal income to $117.57 per $1,000 of personal income. By either measure – per $1,000 of personal income or per capita – Rhode Island’s total tax burden continues to be driven by the state’s high property tax collections, which now account for 44.7 percent of all tax collections in the Ocean State (despite a 1.0 percent decline from FY 2010).