How Rhode Island Expenditures Compare – 2012 Edition

Today RIPEC released its annual report: How Rhode Island Expenditures Compare, which provides details on  state and local government expenditures in FY 2000 and FY 2010, the latest year for which national data are available.  This year’s report also includes an analysis of the changes between FY 2009 and FY 2010.  The publication compares Rhode Island’s spending with that of the other 49 states and the national average using data released by the US Census Bureau on September 25, 2010.  To see the full report, click here.

Rhode Island’s total direct general expenditures as a share of personal income are slightly lower than the national average ($211.65 nationally, compared to $211.25 in Rhode Island).  On a per capita basis, the Ocean State’s total spending of $8,667 was approximately five percent higher than the national average of $8,267.  

The report also finds a continuation of spending patterns found in past reports.  Vendor payments – payments made directly to private vendors for medical care on behalf of means-tested beneficiaries, e.g., Medicaid Title XIX and Medicare Part D payments – continue to account for the largest share of growth in state and local expenditures in Rhode Island.  Over the past decade, spending in this category accounted for 36 cents of every new dollar of state and local spending, compared to 19 cents of every new dollar nationally.  Moreover, vendor payments are the sole driver of the state’s social welfare-related spending: there was a net decline of 6.1 percent in state spending across all the other social service/income maintenance-related categories.

Similarly, spending on elementary and secondary education continues to be a major driver of spending, both at the state and national level.  Between FY 2000 and FY 2010, elementary and secondary spending accounted for 23.5 percent of the total growth in state and local spending in Rhode Island, and 20.2 percent of the total increase nationally.  Rhode Island continues to rank in the top half of the country for K-12 spending, both as a share of personal income (17th highest) and per capita (8th highest).  In contrast, the state spends significantly less on higher education than the rest of the country, ranking 45th by both measures.  Higher education spending in Rhode Island has also increased at a slower rate than the national average, growing by just 5.7 percent, compared to 10.5 percent, nationally.

Insurance trust expenditures, which are outside of general expenditures, and include unemployment compensation, worker’s compensation and employee retirement costs, also increased significantly over the past decade, and between FY 2009 and FY 2010.  The primary driver of this increase was unemployment compensation, which increased more than seven-fold nationally, and five-fold in Rhode Island over the ten-year period.  These expenditures roughly doubled at both the state and national level between FY 2009 and FY 2010.  

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