Where Are Your Tax Dollars Going?

Where Are Your Tax Dollars Going?

The Ocean State spends more per capita on fire protection and has one of the costliest Medicaid programs in the country, according to a study released today by the Rhode Island Public Expenditure Council.

In 2008, state and local government in Rhode Island spent a total of $256 for every resident on fire protection, which is well above the second highest state of Nevada, which spent $196, based on the latest available U.S. Census data. The cost of fire services in Rhode Island increased considerably over a 10-year period, from $132 per person in 1998, when it was still the number one state, according to the RIPEC study. 

The two largest areas of spending in Rhode Island were elementary and secondary education and “vendor” payments—which is mainly Medicaid payments to hospitals and other health care providers. Together these two areas accounted for 60 percent of all local and state spending in Rhode Island.

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The state spent $2,047 per person on elementary and secondary education, making it the eighth highest in the country, ahead of states like Massachusetts, California, Florida, and Texas (see below charts for more information). Ashley Denault, a policy analyst at RIPEC, said the group questions how much of a return the state is getting on its investment in education.

Spending on elementary and secondary education grew at a rate of 13.2 percent in Rhode Island in ten years—nearly double the national rate. But when it came to higher education, Rhode Island was at the bottom, spending $552 per resident. Only two states spent less—Tennessee and Florida. Those at the top were Wyoming, North Dakota, and Vermont.

RI Has One of the Most Expensive Medicaid Programs

Rhode Island ranked number one for vendor payments—mostly for Medicaid. In 2008, vendor payments cost the state $1,785 per resident, up from $640 in 1998, when it was the sixth highest state.  

The growth in vendor payments was two and a half times greater than the national average increase of 35 percent. “The question for us is whether that growth is sustainable given that it is already the second largest share of our budget,” Denault said.

At the other end of the spectrum, Rhode Island was a low-spender on the environment and housing as well as transportation. The Ocean State ranked 36th on transportation, spending $551 per person. Local and state spending on the environment and housing came out at $497 per person, putting Rhode Island at number 36 on a ranking of all the states.

Overall, government spending in Rhode Island increased by 14.2 percent, ranking as the 14th highest with a cost of $8,475 per person.