RIPEC’s publication How Rhode Island’s State and Local Expenditures Compare – 2007 Edition compares Rhode Island’s expenditures – per $1,000 of personal income and per capita – with those of the other 49 states and the United States average. This year’s report includes data for both fiscal years 2005 and 1995, based on the United States Census Bureau, Government Finance data. FY 2005 is the latest year for which national data are available.
Rhode Island’s direct general expenditures in both FY 1995 and FY 2005 were higher than the national average, both on a per capita and per $1,000 of personal income basis. Similar to prior years, the Ocean State spent more by either measure for public welfare programs, elementary and secondary education, and public safety than most other states.
As is the case throughout the country, the two largest expenditure categories were Medicaid/vendor payments and Elementary/Secondary Education. However, in FY 2005 these combined expenditures accounted for 37.0 percent of all direct general expenditures nationally, while in Rhode Island they accounted for 43.1 percent of direct general expenditures.
Expenditures for Medicaid/vendor payments are the primary driver of expenditure growth in Rhode Island – while they accounted for just 11.6 percent of the state’s budget in FY 1995, Medicaid/vendor payments were 20.2 percent of all direct general expenditures in FY 2005. Rhode Island’s Medicaid/vendor payment expenditures increased in relative terms as well. Rhode Island ranked 12th highest per $1,000 of personal income in FY 1995, whereas the state ranked 5th highest in FY 2005.
Cash assistance payments follow a similar pattern. While cash assistance payments have continued to decline, primarily due to welfare reform efforts, the rate of decline has been slower in Rhode Island than in other states and the Ocean State continues to spend above the national average and above its neighboring states.
Expenditures for public safety – particularly fire safety – remain significantly higher in Rhode Island than in the rest of the country. In both FY 1995 and FY 2005 the Ocean State ranked highest in the country for per $1,000 of personal income expenditures on fire protection and 14th highest for police protection per $1,000 of personal income. Fire protection expenditures in the State were more than double the national average.
Rhode Island did not high have expenditures across the board. In FY 2005 the state ranked in the bottom ten states for expenditures per $1,000 of personal income on highways, higher education and parks and recreation. Furthermore, while the majority of states have increased higher education spending, Rhode Island has seen higher education expenditures decline as a percent of the budget and on a per $1,000 of personal income basis.