Rhode Island’s state and local government per-capita spending is greater than that of most U.S. states, according to a new report by the Rhode Island Public Expenditure Council.
The Oct. 20 report, which covers fiscal year 2023, found that Rhode Island ranks fifth in the nation for per-capita expenditures on both government administration and public safety. The state also ranked in the top 10 for the amount of federal aid received and placed above average in total revenues, the report reads.
Published alongside an interactive map visualizing the statewide and national taxing and spending, the report utilizes data from the U.S. Census Bureau’s Annual Survey of State and Local Government Finances.
The report analyzes both spending per capita and spending per $1,000 of personal income, capturing impacts across the population as well as “the ability of taxpayers to foot the bill,” said Justine Oliva, director of policy and research for RIPEC.
According to the report, Rhode Island receives relatively large amounts of federal aid, ranking seventh in the nation in federal aid revenue per capita. Over 30% of the state’s revenues came from federal aid, the report noted.
“Given the current situation with the uncertainty of federal funding,” Oliva said this relatively large proportion of federal funding revenue is “something policymakers should be paying attention to.”
Rhode Island’s state and local spending in “Government Administration” — one of six categories into which the report splits total expenditures — ranked fifth-highest in the nation per capita. The state also led the nation in “General Government Administration” spending — a subcategory that includes planning and zoning operations, central personnel and administrative activities — at $479 in government expenditures per person.
Oliva explained that these high expenditures in Rhode Island may come “as a result of (the state) having no county government functions and having 39 cities and towns, some of which are pretty small,” among various other potential causes.
“When a government is too small, it’s not able to have the same efficiency as a larger government,” she added.
Anthony Levitas, a senior fellow in international and public affairs, expressed similar sentiments in an email to The Herald.
“R.I. is too small and too jurisdictionally fragmented,” he wrote. “As a result, we spend more on general administration.”
Neil Thakral ’13, an assistant professor of international and public affairs and economics, noted that variation in labor costs across states may also play a role in the state’s high rankings. He compared Rhode Island to Vermont and Maine, which ranked 19th and 32nd, respectively, in government administration spending per capita.
Labor costs “relevant for government administration expenditures” tend to be higher in Rhode Island than in Maine or Vermont, Thakral wrote in an email to The Herald, citing several figures from the U.S. Bureau of Labor Statistics.
He also explained that Rhode Island prices are “generally higher,” pointing to statistics from the Federal Reserve Bank of St. Louis.
Beyond government administration spending, Rhode Island’s public safety expenditure per capita is also 1.4 times greater than the New England total, according to the report. The public safety category includes spending on corrections and police and fire protection.
The state has “too many fire and police departments,” Levitas explained.
Rhode Island also has “among the lowest incarceration rates nationally,” the report reads, leading some to question this larger proportion of expenditures.
“Rhode Island is not a more dangerous place,” Oliva said. “We don’t have higher crime levels that would necessitate, perhaps, much greater spending on police.”
Rhode Island’s state and local taxes, which totaled $6,879 per person, moved down from a top-15 rank for fiscal year 2018 to a top-20 rank for fiscal year 2023.
Efforts to limit property tax hikes have driven the decline in total taxes, Oliva explained.
“Cities and towns have kept property tax increases relatively low, relative to other states, and also relative to other taxes,” she told The Herald.
In other categories, Rhode Island ranked near the bottom. The Ocean State’s per-capita spending on parks and recreation — which is mostly done at the local level, according to Oliva — ranked 49th. Per-capita spending on higher education ranked 44th.
The findings are based on two-year-old survey data released by the Census Bureau in July, but the numbers should still reflect current general trends in state expenditures, according to Oliva.
“I don’t think that there’s any reason to believe that Rhode Island has made a major change in which our government administration spending is suddenly much lower,” she said.
Though the report did not offer recommendations, Oliva mentioned several questions for policymakers to consider.
“High spending is not necessarily wrong on its own,” she said. “The question is, what are you getting for those services? … Do we have better government administration?”
Anthony Vega, a spokesperson for Mayor Brett Smiley, deferred a request for comment to Gov. Dan McKee’s office. McKee’s office did not respond to The Herald’s request for comment.
Lev Kotler-Berkowitz is a senior staff writer covering city and state politics. He is from the Boston area and is a junior concentrating in Political Science and Economics. In his free time, Lev can be found playing baseball or running around with his dog.
