As the 2023 General Assembly session begins, RIPEC brings you an update on public policy in the Ocean State.

RIPEC on Public Policy

• RIPEC released a report and interactive data dashboard analyzing municipal spending on non-education services in Rhode Island. The report found that despite a wide range in municipal spending across the state, Rhode Island’s local governments generally outspend regional and national benchmarks on certain services, particularly public safety, while underinvesting in other functions. RIPEC offers actionable recommendations to both state and local policymakers based on its findings.
  • Go Local Prov, “RI Communities Spend ‘Much More’ Than Other Parts of the Country on Police and Fire”
  • Providence Business News, “RIPEC: Local governments underinvesting in important areas”
  • What’s Up News, “RIPEC releases ‘How Cities and Towns Spend Their Money’ Report’”
  • Providence Business First, “Fiscal watchdog: RI cities and towns spend too much on public safety”

• Guest columnist Julia Steiny wrote in the Providence Journal that RIPEC’s report Improving Rhode Island’s K-12 Schools: Where Do We Go From Here? “answers the question with specific, data-rich & even startling, proposals” and urges Rhode Islanders “to act on them now to relieve what it calls ‘RI’s education crisis.’” With respect to improving K-12 governance, Steiny points to RIPEC’s recommendationto “strengthen authority at the state level and consider making the Commissioner of Education an appointee of the governor like other cabinet members.”

• Responding to the plans of some local governments to use some of their collective $537 million in American Rescue Plan Act funds to subsidize nonprofits and businesses, RIPEC President and CEO Michael DiBiase told the Providence Journal that while such one-time spending avoids ongoing costs, “a tendency to spread this money thinly” may lessen “the overall impact.”  

• In articles focused on the school systems of Pawtucket and Central Falls as well as North Providence, RIPEC Research Manager Justine Oliva told The Valley Breeze that RIPEC’s road map to K-12 education reform showed that while Ocean State students presently face “really bleak outcomes,” Rhode Island has experienced periods of meaningful education reform in recent history, and can do so again if all stakeholders get on board.

Inside Insights

• According to a recent report by the National Association of State Budget Officers, general fund spending authorized in enacted state budgets across the United States increased by 6.7 percent in fiscal year (FY) 2023 over FY 2022. FY 2022 spending had increased by 18.3 percent over FY 2021, a record annual spending increase. Rhode Island’s enacted FY 2023 budget contained an annual spending decrease of 3.7 percent, but FY 2022 spending had jumped 28.4 percent.

• With states projecting a tightening of state and local revenues in upcoming budget years, Governing magazine has reported that state and local employee compensation likely will not increase at a rate that matches inflation.

What to Look for in January

• As the General Assembly is back in session, legislators will begin tackling budget revisions for the current FY 2023 budget and the development of a budget plan for FY 2024, assessing how to address a projected $610 million surplus for FY 2023 and whether and how to reform the K-12 school funding formula in light of significant year-over-year enrollment drops since 2019. In a Providence Journal interview, Senate President Ruggerio and Majority Leader Pearson raised the need to reform the education funding formula by redirecting funds used in FY 2023 to hold districts harmless for enrollment declines, a move recommended by RIPEC in its report on school funding.

• RIPEC will release a policy brief analyzing the state’s business tax competitiveness ranking and offering recommendations to policymakers for improvement. The 2023 Tax Foundation Business Tax Competitiveness Index marks the first time that Rhode Island has entered the bottom ten states for business tax competitiveness since 2015.