RIPEC: R.I. remains high tax state

THE RHODE ISLAND PUBLIC EXPENDITURE COUNCIL released its annual report,
THE RHODE ISLAND PUBLIC EXPENDITURE COUNCIL released its annual report, "How Rhode Island Revenues Compare," which showed that the Ocean State ranked 21st per $1,000 of personal income regarding state and local revenue, and 11th on a per capita basis. / COURTESY RIPEC

PROVIDENCE – Rhode Island’s state and local revenue in fiscal 2012 ranked 21st highest in the country as a share of personal income at $235.52 per $1,000 and 11th highest on a per capita basis at $10,677, according to the latest report from the Rhode Island Public Expenditure Council, “How Rhode Island Revenues Compare.”
Counted as revenue are taxes, charges and miscellaneous revenue, intergovernmental revenue, and insurance trust, utility and liquor store revenue. Fiscal 2012 was used because it was the most recent year for which national data was available, RIPEC said.

Rhode Island ranked 13th highest in the country when tax collections, a subcategory of general revenue, were measured per $1,000 of personal income, at $109.78, which is nearly 7 percent higher than the national average of $102.81.
Of the six New England states, only Massachusetts ($101.10) and New Hampshire ($81.99) had total tax collections as a share of personal income below the national average in fiscal 2012.
On a per capita basis, Rhode Island again ranked 13th for $4,977 of tax collections, which was 11.7 percent greater than the national average of $4,455.
Both measures – per $1,000 of personal income and per capita – are driven by the state’s high property tax collections, which now account for nearly 45 percent of all tax collections in the state, the report said.
Property tax collections in Rhode Island were the fourth highest in the country in fiscal 2012 as a share of personal income at $49.27 per $1,000 and sixth highest on a per capita basis at $2,233.

Rhode Island’s individual income tax collections of $22.69 per $1,000 of personal income were on par with national collections of $22.76.

Not much has changed over the years, according to the RIPEC report. Back in fiscal 2002, Rhode Island ranked 29th for total revenue collections per $1,000 of personal income and 14th per capita.

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The report said that between fiscal 2002 and fiscal 2012, individual income tax collections as a share of personal income decreased by 6.2 percent in the Ocean
State compared with a 1.5 percent increase nationwide.

Though the Great Recession had an impact on national and state revenue, by fiscal 2012, the report said that total per capita revenue in Rhode Island was 19.6 percent greater than fiscal 2008 levels.
Nationwide, per capita revenue grew 10.6 percent during the same period.

The increase in Rhode Island was driven primarily by increases in property tax revenue collections (a 14.5 percent increase) and intergovernmental revenues (a 21.2 percent increase). Property taxes and intergovernmental revenues also increased nationally during this time period, but by smaller percentages (5.6 percent and 18.4 percent, respectively).

State and local governments in Rhode Island collected $11.2 billion in fiscal 2012, approximately $1.5 billion, or 12 percent, below fiscal 2011 revenues.
A significant contributor of the state decrease was related to declines in insurance trust fund revenue (such as public employee retirement systems, unemployment compensation, state workers’ compensation systems), which decreased by $1.3 billion in Rhode Island, and $388.1 billion nationally – decreases of 48.0 percent and 46.9 percent, respectively.

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