The Rhode Island Public Expenditure Council (RIPEC) released today an analysis of “How Rhode Island Compares” to the U.S. and New England on state and local revenues and expenditures, using the most recent data available from the U.S. Census Bureau (from fiscal year 2019).
RIPEC sasys that the report provides valuable insights for policymakers, given the regional and national competition among states for investment and growth, and reveals areas for potential efficiencies. The report does not encompass the very large allocation of federal pandemic relief funds to state and local governments which began in FY 2020.
“As state policymakers grapple with where to invest an influx of federal funds and craft a state budget, How Rhode Island Compares will be particularly helpful in highlighting areas where Rhode Island needs to invest and where we need to constrain spending in the long term,” said Michael DiBiase, President and CEO of RIPEC. “The state diverges from the nation in several key areas, including our comparatively high reliance on property tax revenues and our relative overspending on education, social services and income maintenance, and public safety,” he continued.
Based on the report’s findings, RIPEC offers the following recommendations to policymakers:
- Rhode Island should continue to increase the state share of elementary and secondary education funding to both decrease reliance on property tax revenues and increase equity in elementary and secondary education expenditures. At the same time, policymakers should seek to slow the growth in total state and local expenditures for K-12 and focus investments on improving student outcomes.
- Given the critical importance of higher education to economic prosperity, policymakers should allocate more resources for higher education and seek to grow enrollment in public higher education institutions to improve access and affordability for Rhode Island students.
- Rhode Island should seek to constrain the growth of total spending to bring the state more in line with the region and nation.
- Rhode Island should focus on controlling the growth of spending on social services and income maintenance, particularly spending on Medicaid, which is growing at a faster rate than total expenditures.
- State and municipal policymakers should seek to at least slow the growth of public safety expenditures to bring them more in line with national and regional benchmarks.
- There is need for further investment in natural resources and parks and recreation, particularly given the state’s economic reliance on tourism, even though Rhode Island recently has increased spending in these areas.
- While the Ocean State has significantly increased transportation spending in recent years, given that the state’s transportation infrastructure remains among the worst in the nation and its spending in this category was still below that of the nation in FY 2019, policymakers should continue to increase investments to improve the state’s roads and bridges.
In addition to the report, RIPEC prepared a series of interactive datasets that provide a 50-state breakdown of key revenue and expenditure data. Those datasets are available here.
The full report is available here, an executive summary is available here, and an infographic is available here.