PROVIDENCE R.I. (September 2019) – Today, the Rhode Island Public Expenditure Council released the first of three volumes that comprise “Rhode Island in Context: Regional and Historic Trends,” 2019 Edition. “Volume I: Government Finance”.
“Rhode Island in Context” provides summaries and analyses of the most current national, regional, and state data that measure the Ocean State’s population trends, economic climate, and government finance against national and regional averages over decades.
“Rhode Island in Context uses key indicators and the most recent data to paint a fuller picture of Rhode Island,” said John Simmons, CEO and President of RIPEC. “Establishing a shared understanding of where Rhode Island stands regionally and historically is integral to making relevant and informed policy choices,” Simmons continued.
“Volume I: Government Finance” offers data and analyses related to state expenditures, revenues, taxes, caseloads, and economic forecasting. It provides a historic and contemporary overview, in addition to future projections for the state.
Volumes II and III will lay out data and analyses related to Rhode Island’s population and economy, examining trends in migration, income, health insurance, social assistance, education, employment, the gross domestic product (GDP), international trade, housing, energy, the business climate, and research and development (R&D).
Highlights in Volume I include:
- After adjusting for inflation, all funds expenditures grew by 10.1 percent between fiscal year (FY) 2010 and the FY 2020 enacted budget.
- Between FY 2012 and the FY 2020 budget as enacted, the Ocean State’s general revenue expenditures increased by 16.3 percent on an adjusted basis, which is higher than the adjusted growth in Rhode Island’s mean personal income (13.4 percent) and the rate of inflation (14.0 percent) in the same period.
- In FY 2010, the number of full time equivalent (FTE) positions authorized was at its lowest since FY 1990. There has been a 5.1 percent increase in FTE authorizations since FY 2010.
- General revenue deficits are projected to grow to $266.3 million, or 5.1 percent of available revenue, by FY 2024.
- On an adjusted basis, Rhode Island’s general revenues increased by 25.8 percent between FY 2000 and FY 2020. Personal income taxes accounted for the largest share of increase in general revenues (32.1 percent) in this period.
- In adjusted dollars, the municipal property taxes levied in Rhode Island expanded by 112.3 percent from 1980 to 2019. The statewide property tax levy averaged 1.7 percent annual growth.
How Rhode Island Compares
- In FY 2016, Rhode Island’s total general revenue collections of $200.15 per $1,000 of personal income were 16th highest in the country. In per capita terms, Rhode Island had the 12th highest general revenue collections in the U.S.
- In FY 2016, the Ocean State spent more than the national average in the categories of education and libraries, public safety, environment and housing, government administration and interest on general debt, and other. It spent below the national average on social services and income maintenance, as well as transportation.
- Between FY 2006 and FY 2016, the largest share of change in direct general expenditures in the Ocean State came from social service and income maintenance (26.0 percent), vendor payments (22.8 percent), and elementary and secondary education (22.3 percent). The U.S. had the same three fastest-growing categories of spending, though social service and income maintenance and vendor payments comprise a larger share of change (45.2 percent and 30.3 percent, respectively), while elementary and secondary education (15.0 percent) made up a smaller share of change.
Consensus Economic Forecast
- Between the Revenue Estimating Conferences in November 2018 and May 2019, projected employment numbers, the unemployment rate, and average personal income were revised downward, while CPI was projected to be higher from FY 2022 onward than in November 2018 projections. Annual personal consumption expenditure growth projections for FY 2021, 2022, and 2023 were revised upward between November and May. Personal income growth was revised upward between FY 2021 and FY 2023, but FY 2024 projections were revised downward, and FY 2025 and FY 2026 projections stayed constant.
Caseload Estimating Conference
- On an adjusted basis, Medicaid expenditures from general revenues are anticipated to grow by $356 million (57.3 percent) between FY 2005 and FY 2020.