Rhode Island’s state and local taxes and spending are consuming a growing share of residents’ incomes because incomes here are growing more slowly than the nation’s, according to a report released Monday by the Rhode Island Public Expenditure Council.
The business-backed research group’s annual report, “How Rhode Island Compares: State and Local Taxing and Spending,” ranks the state across 32 revenue and spending categories using U.S. Census Bureau data through fiscal 2024, and compares those rankings with fiscal 2019.
Per capita personal income in Rhode Island grew 25% over that period, against 32% nationally, and the state’s rank fell from 16th to 22nd, according to RIPEC. Measured against residents’ ability to pay, total spending rose from 24th highest to 18th and tax revenues from 15th to 13th.
“The cost of state and local government is outpacing Rhode Islanders’ ability to pay,” Michael DiBiase, RIPEC’s president and CEO, said in a statement. “Because our economy is growing more slowly than the nation’s, the same level of taxing and spending is taking a bigger bite out of Rhode Islanders’ incomes.”
Where the state stands out
Rhode Island ranked 5th nationally in public safety spending, both per capita and relative to income, and 1st in fire protection, according to the report. By income, the state spent 1.7 times the New England level on public safety.
It ranked 6th by income in government administration spending, 1.6 times the New England level, and 2nd by income in general government administration.
Property taxes ranked 10th per capita and 8th by income. Federal aid ranked 10th per capita and 14th by income.
The state lagged in higher education, 45th per capita, and parks and recreation, 49th.
Social services and income maintenance, primarily Medicaid, and education together accounted for 62% of expenditures. Elementary and secondary education ranked 11th per capita and 8th by income.
What grew fastest
Total spending rose 32% per capita between fiscal 2019 and 2024, with social services and income maintenance up 41%. Sales and excise taxes grew 46% per capita, moving the state from 28th to 17th per capita. Corrections rose eight spots by income, from 26th to 18th.
DiBiase tied the public safety and administration figures to how local government is organized in Rhode Island.
“In public safety and government administration, our high costs reflect in part the many services delivered by small local governments, not greater need,” he said. “And while we spend heavily on K-12 education, our student outcomes remain middling.”
The report is accompanied by an interactive 50-state rankings map that compares Rhode Island with any state across all 32 categories, with views for both per capita and per $1,000 of personal income.
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