On Monday, February 25, 2008, the Rhode Island Public Expenditure Council (RIPEC) released its 2008 edition of “How Rhode Island Schools Compare”, a report that compares education finances in the Ocean State to the other 49 states.  This year’s report includes RIPEC analysis and additional tables which examine the state’s education spending as a percent of personal income.

Rhode Island, Massachusetts and Connecticut have many similar characteristics with regard to how they finance public education. All three states rank in the top 10 for per pupil expenditures, average teacher salaries and are above the national average for dependence on the property tax.  However, as in years past, Rhode Island continues to move against the prevailing national and regional trends.

RIPEC found that while Rhode Island ranked 9th highest in expenditures per pupil in 2007, spending 20.4 percent above the national average, the rate of per pupil growth has been out-paced in Massachusetts and the United States as a whole.  Rhode Island’s 2006-07 per pupil expenditures of $11,503 represent an increase of 56.3 percent since the 1996-97 school year.  Per pupil expenditures grew by 60.6 percent nationally and by 79.6 percent in Massachusetts.

While Rhode Island has seen slower growth in per pupil education spending, a greater proportion of that growth has been borne by municipalities in comparison to the rest of the country.  Between 1997 and 2007 the share of education funded primarily by property taxes increased from 54.4 percent to 60.6 percent in Rhode Island.  During this time, Rhode Island rose in the national rankings for reliance on local revenues from 12th to 2nd highest.  In contrast, the national average decreased from 44.6 percent in 1997 to 43.5 percent in 2007.  In Connecticut the share of school revenues from local sources as a percent of the total decreased from 56.6 percent to 55.0 percent but the state rose in the rankings from 9th highest to 7th highest.  Massachusetts decreased in both the rankings and in the percent of revenue raised by property taxes, from 55.1 percent (10th highest) to 47.2 percent (19th highest).   

This year’s report also examines education expenditures on a per $1,000 of personal income basis to provide insight into the relative affordability of education in the Ocean State.  While Rhode Island spends less than both Connecticut and Massachusetts on a per pupil basis, the state outspends both its neighbors when education expenditures are examined as a percentage of personal income.  In 2006-07, Rhode Island spent $46.92 per $1,000 of personal income on education, which was 10.1 percent above the national average of $42.61.  By contrast, Connecticut spent $41.92 per $1,000 of personal income, 1.6 percent below the national average and Massachusetts spent $43.22 per $1,000 of personal income, 1.4 percent above the national average.

Rhode Island’s teacher salaries experienced a slightly lower rate of growth than the national average and have dropped in the rankings from 7th to 8th highest ($43,109 and $55,956 respectively); however, as is the case in both Connecticut (average teacher salary of $63,640) and Massachusetts (average teacher salary of $58,624), teacher salaries in the Ocean State were significantly higher than the national average of $38,442 in 1997 and $50,816 in 2007.

Additional findings include:

• Although Rhode Island ranks in the top ten for per pupil spending, with expenditures of $11,503 in 2007, the State is ranked 32nd highest in percent growth for per pupil expenditures.  Connecticut and Massachusetts ranked 34th and 11th highest, respectively.  Since 1997, the average annual rate of growth in per pupil expenditures in the Ocean State was 4.6 percent, compared to 6.0 percent in Massachusetts and 4.9 nationally; Connecticut’s average annual rate was 4.5 percent.
• Rhode Island ranked 16th highest in the country for current education expenditures per $1,000 of personal income in 2006-07 and 18th highest in 1996-97.  Connecticut and Massachusetts also rose in the national rankings, from 31st to 30th highest, and 38th to 25th highest, respectively.
• Between 1997 and 2007 the average annual rate of growth in teacher salaries was 2.7 percent in Rhode Island, compared to 3.2 percent in Massachusetts, and 1.9 percent in Connecticut.  Nationally, teacher salaries increased at a rate of 2.8 percent per year.
• In 1997 Rhode Island was ranked 12th highest on local government revenue as a percentage of total school revenues.  In 2007 Rhode Island ranked 2nd highest, with 60.6 percent of education funding coming from local sources.  The only state that ranked higher that Rhode Island was Illinois, were 63.9 percent of total education revenue came from local sources in 2007.  Massachusetts fell from 10th to 19th highest (47.2 percent from local sources), and Connecticut increased from 9th to 7th (55.0 percent from local sources).  
• The Ocean State ranked 44th in the country for the percentage of total education revenues provided by State in 2006-07.  While 47.6 percent of education revenues came from state sources nationally, in Rhode Island 36.2 percent of revenues were from the State.