This RIPEC publication – “Rhode Island 2010” – builds on recent RIPEC work forecasting selected demographic trends through 2010. There are certain socio-economic factors that influence eligibility for entitlement programs, education services and other programs, and the projected growth in many segments of Rhode Island’s population will have an impact on the resources needed to provide quality services.
Projection of demographic trends raise concerns about how prepared the state is to ensure economic opportunities and create a competitive tax climate. By 2010, demographic data point towards a Rhode Island that will be older, have fewer workers in their prime productive years, be less self-sufficient and more reliant on government assistance, requiring continued taxpayer investment in entitlement programs and fundamental public services. These trends can undermine the state’s tax competitiveness and the state’s overall economic health, which could translate into higher taxes and an inability to provide affordable public services to Rhode Islanders.
The report discusses demographic trends and relates the findings to state and local spending. RIPEC’s analysis indicates that the state may be heading towards uncertain fiscal times. These issues – state operating deficits, continued demands on Medicaid, school spending growth despite declining enrollments, escalating property tax burdens and limited housing supply – will have an impact on the quality of life in Rhode Island’s neighborhoods and communities and raise some pressing questions:
- Will there be enough “Gas” in the state’s economic engine to sustain spending habits?
- Is entitlement reform possible?
- Can we field a highly skilled workforce?
- How will school spending demands, high property tax burdens and growing housing process impact the State’s quality of life?
The bottom line is that state spending has grown faster than both inflation and personal income and that spending is limited only by the revenues generated in a given fiscal year. The information presented in “Rhode Island 2010” suggests that the state is at a critical crossroad, and decisions that are made, or not made, within the next three years will have a profound effect on the future of the Ocean State, our children and grandchildren. Now is the time to consider transformational changes.