R.I. personal income rises 1.1% in 2Q, tax revenue grows 1.9% in 1Q

THE PEW CHARITABLE TRUSTS examined each state’s tax receipts in the first quarter with its peak quarter of revenue before the end of the recession. Rhode Island saw tax revenue growth of 1.9 percent over that period, Pew said. / COURTESY THE PEW CHARITABLE TRUSTS
THE PEW CHARITABLE TRUSTS examined each state’s tax receipts in the first quarter with its peak quarter of revenue before the end of the recession. Rhode Island saw tax revenue growth of 1.9 percent over that period, Pew said. / COURTESY THE PEW CHARITABLE TRUSTS

PROVIDENCE – Personal income in Rhode Island grew 1.1 percent in the second quarter over the past year, the slowest among the New England states, and lagging national personal income growth of 2 percent during the same period, according to the Fiscal 50 report released Tuesday by The Pew Charitable Trusts.
Since the start of the Great Recession in fourth quarter 2007, Rhode Islanders’ personal income has grown 1 percent.
According to Pew, “personal income tallies residents’ paychecks, Social Security benefits, employers’ contributions to retirement plans and health insurance, income from rent and other property, and benefits from public assistance programs such as Medicare and Medicaid, among other items.” It is used by federal officials to determine support to states for certain programs, such as funds for Medicaid. State governments also use personal income statistics to project tax revenue for budget planning and estimate the need for public services.
Twenty-three states outpaced U.S. personal income growth over the year in the second quarter, with Utah leading the nation, at 4 percent. However, North Dakota has led the nation in growth since the recession, with its personal income increasing 4.7 percent, but it also had the greatest decrease over the past year – 3.6 percent due to a worldwide drop in petroleum prices.
New Hampshire and Massachusetts had the greatest increases in personal income in New England over the year at 2.5 percent and 2.4 percent, respectively. Connecticut’s growth over the year was 1.3 percent; Maine, 2.1 percent; Vermont, 2.1 percent.
Pew also examined 2016 first quarter tax revenue data, finding that tax revenue in 31 states had bounced back from losses in the recession, including Rhode Island, where tax revenue has increased 1.9 percent, and Massachusetts, which had a 9.7 percent increase, the highest in New England. The lowest was New Hampshire, with a 0.9 percent increase.
Pew said it compared each state’s tax receipts in the first quarter with its peak quarter of revenue before the end of the recession, averaged it across four quarters and adjusted for inflation. North Dakota led the nation with collections in the first quarter that were 52.5 percent above their highest point during the recession.
“Combined, the 50 states now have the equivalent of 6.5 cents more in purchasing power for every $1 they collected at their 2008 peak. Even states with extra purchasing power since the recession, though, can face budget pressures because of increased expenditures due to population growth, changes in Medicaid costs and enrollment, and deferred or new needs for schools, safety-net programs, corrections, employee salaries and pensions, and road maintenance and construction,” Pew stated in the release.

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