Debt pushing public expenditures toward top of state spending in U.S.

TOTAL STATE AND LOCAL PUBLIC SPENDING in Rhode Island stood at levels greater than spending in the United States as a whole in nearly all categories, according to the latest data from the Rhode Island Public Expenditure Council. / COURTESY RHODE ISLAND PUBLIC EXPENDITURE COUNCIL
TOTAL STATE AND LOCAL PUBLIC SPENDING in Rhode Island stood at levels greater than spending in the United States as a whole in nearly all categories, according to the latest data from the Rhode Island Public Expenditure Council. / COURTESY RHODE ISLAND PUBLIC EXPENDITURE COUNCIL

PROVIDENCE – Rhode Island’s continued public borrowing is taking a larger portion of state and local spending, driving the Ocean State’s rank in the nation for public expenditures ever higher, according to the latest study by the Rhode Island Public Expenditure Council released Tuesday.

Measured on two bases – expenditure per $1,000 of personal income and per capita – Rhode Island’s state and municipal spending ranks in the top half of the states in the union when it comes to spending on a number of goods and services, based on data from the Census Bureau and the U.S. Bureaus of Economic Analysis and RIPEC calculations done in this latest edition of “How Rhode Island Compares: FY 2014 State and Local Expenditures.”

On a per $1,000 of personal income, total expenditures in the Ocean State came in at $228.40, 3.7 percent higher than the national number and ranked No. 21 among the states. Per capita, Rhode Island ranked No. 15, with spending at $10,989.92.

While many categories of spending, such as transportation, and environment & housing ranked in the bottom half or near the middle of the pack, spending on public safety, as well as government administration and interest on government debt both pushed the state to near the top of the lists. Public safety spending per $1,000 of personal income ranked eighth highest in the nation, 14.4 percent higher than the national average, and No. 7 on a per capita basis, at $873.85.

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Rhode Island came out at No. 3 on the list per $1,000 of personal income for government administration and debt service, 37.9 percent higher than the national average. On a per capita basis, the Ocean State ranked No. 4, with spending of $1,058.10, 41.9 percent above the national average. In a further breakdown of that category, Rhode Island’s interest on general debt ranked highest in the nation on a personal income basis and third highest on a per capita basis.

The change in debt service over the decade ending in fiscal 2014 was dramatic. According to the RIPEC analysis, interest on general debt on a personal income basis stood at $8.38 in fiscal 2004, ranking Rhode Island No. 20 in the nation. But in fiscal 2014, that number stood at $11.71 per $1,000 of personal income, the highest amount in the nation.

Interestingly, that figure made its biggest leap from fiscal 2004 to fiscal 2009, when it hit $12.91 per $1,000 of personal income, also the highest level in the nation. The story on a per capita basis is similar. In fiscal 2004, interest on general debt stood at $301 per person, No. 15 in the nation. In fiscal 2009, Rhode Island ranked No. 4, with per capita interest on general debt totaling $528.45. By fiscal 2014 that figure had grown to $563 per capita, third highest among the states for state and local expenditures.

Overall, from fiscal 2004 through fiscal 2014, Rhode Island saw an increase in total state and local expenditures of 29.8 percent, growing from $8.9 billion to $11.6 billion. As large as the increase was, however, it fell well behind the spending growth in Washington, D.C., as total expenditures during the time period grew 43.9 percent to $3.3 trillion, according to RIPEC.

Rhode Island’s public spending was not out of line with its New England neighbors, however. On a personal income basis, Vermont ranked No. 5 for total direct general expenditures (a slightly different measurement than the total expenditures figure used to compare Rhode Island to the national average). Maine ranked No. 11 in this measurement, compared with No. 22 for the Ocean State. Massachusetts ranked No. 38, Connecticut ranked No. 49 and New Hampshire ranked No. 50.

On a per capita basis, Rhode Island ranked No. 15, while Vermont came in at No. 5, Massachusetts at No. 7, Connecticut at No. 8, Maine at No. 20 and New Hampshire at No. 34.

For the full report, with an extensive presentation of 36 tables breaking down spending among a number of specific areas, visit ripec.org.

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