K-12 school finances and Rhode Island’s business tax climate highlight this month’s agenda.
RIPEC on Public Policy
- RIPEC released a policy brief on changes to K-12 state education aid in Rhode Island’s fiscal year (FY) 2024 budget. The brief details many complicated changes to the school funding formula enacted by the General Assembly and shows how the changes reversed progress made toward more equitable funding for urban core districts in the previous ten years. The formula now “fails to reflect any coherent policy,” RIPEC President and CEO Michael DiBiase wrote in a Boston Globe Op-Ed. “It is time for the General Assembly to engage stakeholders and experts to pursue comprehensive reform of the funding formula.”
- Providence Business News, “RIPEC: Some changes to education aid were positive but ‘reversed progress’ on equity”
- Providence Journal, “How has RI education funding changed? We break it down and what it means.”
- GoLocal Prov, “Changes to Education Aid in FY 2024 RI Budget ‘Make Little Sense,’ Says RIPEC”
- WJAR 10, “Fiscal watchdog raises red flag over education funding in Rhode Island’s urban core”
- WPRI 12, “Nesi’s Notes: July 5”
- The Public’s Radio, “TGIF: Ian Donnis’ roundup on Rhode Island politics for July 21, 2023”
- In a Providence Journal Op-Ed, Michael DiBiase applauded the General Assembly for establishing a new $50,000 statewide tangible tax exemption, describing it as “practical legislation that provides much-needed tax relief to Rhode Island’s small businesses.” However, given Rhode Island’s ranking of ninth worst for business tax competitiveness by the Tax Foundation, the state “needs to do more to improve its business climate,” he wrote.
- For its work as a proponent of the statewide tangible tax exemption, RIPEC received the 2023 award for Outstanding Policy Achievement on a statewide issue by the national Governmental Research Association at its annual meeting in July.
Inside Insights
- CNBC’s annual ranking of the best states to do business ranked Rhode Island as 45th best (6th worst) for 2023. States were scored in ten broad categories and Rhode Island ranked particularly poorly in infrastructure (44), economy (48), education (41), and the cost of living (43).
- A recent analysis of American Rescue Plan Act spending by state and local governments by the Economic Policy Institute shows the majority of State and Local Fiscal Recovery Funds (SLFR) remain unspent. The study also demonstrates a strong correlation between spending and government employment; the ten states that have spent the least amount of money have state job vacancies twice as high as states that have spent the most.
- The National Federation of Independent Businesses released its Small Business Optimism Index last month. Citing the continued pressures of inflation and a tight labor market, the Index found that “halfway through the year, small business owners remain very pessimistic about future business conditions and their sales prospects.”
What to Look for in August
- RIPEC and The Center for Global and Regional Economic Studies at Bryant University will release their Key Performance Indicators Briefing for the second quarter of 2023. The Briefing highlights key measures that gauge economic activity in the Ocean State on a quarterly basis and provides regional and national comparison.
- The U.S. Bureau of Labor Statistics will report the Consumer Price Index (CPI), a key measure of inflation, for July on August 10th. In June, the CPI was up 0.2 percent month-over-month and 3.0 percent year-over-year.
