PROVIDENCE – On Wednesday, December 5, 2012, the Rhode Island Public Expenditure Council (RIPEC) will release the inaugural version of the “Rhode Island Data Book.” The report benchmarks and analyzes three types of data – population (migration, income, health insurance, social assistance, and education); economic (leading indicators, employment, GDP, trade, housing, energy, business climate, and research and development); and government (expenditures, revenues, taxes, economic forecast and caseload estimating). In general, the data book shows that the state’s current climate – and outlook – is mixed, and that, while Rhode Island tends to fare better than the national average, it trails its regional peers on most indicators. The full data book is available here.
The report finds that, while there are a number of positive trends, Rhode Island continues to underperform relative to regional benchmarks. For example, Rhode Island saw a larger positive one-month change in the Federal Reserve Coincident index – a measure of current economic conditions – than any other New England state. Additionally, Rhode Island was one of only two New England states to see a positive change in the index over the past three months. However, the state’s economy, as measured by the index, continues to lag that of Massachusetts, Connecticut and the US.
Similarly, the data book shows mixed results for education. Rhode Island continues to fare worse the region on both math and reading assessments, has a higher share of the population with less than a high school diploma than New England or the US, and graduates fewer students in STEM-related fields. At the same time, the state also has a higher share of the population holding at least a bachelor’s degree than the national average, continues to see gains in proficiency rates for math and reading, and has a large share of graduates with degrees in business/management.
The state’s fiscal outlook is mixed as well. Rhode Island’s rate of state government spending has slowed over the past decade, largely due to revenue declines as a result of the “Great Recession”. The structural changes the state made in response – such as pension reform – will have a long-term positive impact on the state’s budget. The larger-than-anticipated closing for FY 2012, coupled with a positive revenue outlook for the current fiscal year, indicate that FY 2013 budget is on track. However, general revenue deficits in the out-years are projected to grow by approximately $375 million, or roughly 10 percent of available revenue in FY 2017 as expenditures are projected to grow more than double estimated revenue growth.
The positive movement in the state’s economy appears to be impacted more by changes beyond the state’s borders, rather than its internal dynamics, leaving Rhode Island more vulnerable to external events such as the possible federal fiscal cliff, as well as the European debt crisis. “If Rhode Island wants to be a leader in the new economy, rather than be pulled along by national and regional trends, the state must work to build on its strengths and improve areas of weaknesses,” said John C. Simmons, RIPEC Executive Director. “This type of benchmark analysis provides the groundwork for a systematic identification of issues that should be addressed in order to improve the quality of life for all Rhode Islanders.”
