GOVERNMENT

RIPEC: Education, medical care drive R.I. spending

COURTESY THE R.I. PUBLIC EXPENDITURE COUNCIL
VENDOR PAYMENTS and education expenses drove Rhode Island's spending during fiscal year 2010.
Posted 10/16/12

PROVIDENCE – Costs relating to education and medical care drove Rhode Island’s spending during fiscal year 2010, according to the R.I. Public Expenditure Council’s annual report.

The report – How Rhode Island Expenditures Compare – was released Tuesday and provides details on state and local government expenditures and how they compared to the other 49 states and the national average during fiscal years 2000 and 2010.

This year’s report also contains an analysis between fiscal years 2009 and 2010.

On a per capita basis, Rhode Island’s total spending was $8,667, roughly five percent higher than the national average of $8,267.

Rhode Island’s total direct general expenditures per $1,000 of personal income were slightly lower than the national average at $211.25 compared to $211.65 nationally.

Within general expenditures are seven categories: education and libraries, social services and income maintenance, transportation, public safety, environment and housing, government administration and interest on general debt and other.

In 2010, 33.6 percent of spending was dedicated to education and libraries, 27.9 percent was spent on social services and income maintenance, 11.5 percent was spent on government administration and general debt interest, 9.7 percent was spend on public safety, 5.9 percent was spent on both environment and housing and transportation and 5.6 percent of spending was relegated to “other.”

According to the report, payments made directly to private vendors for medical care – such as Medicaid Title XIX and Medicare Part D payments – accounted for the largest share of growth in state and local expenditures in Rhode Island.

Over the past 10 years, spending in this category has accounted for 36 cents on every new dollar of state and local spending, versus 19 cents of every new dollar nationally.

“Moreover, vendor payments are the sole driver of the state’s social welfare-related spending: there was a net decline of 6.1 percent in state spending across all the other social service/income maintenance-related categories,” said the RIPEC report.

The report added that spending on elementary and secondary education was a major driver of spending at both state and national levels.

Between fiscal years 2000 and 2010, elementary and secondary spending accounting for 23.5 percent of total growth spending in Rhode Island and 20.2 percent nationally.

Separate from general expenditures, insurance trust expenditures – including unemployment compensation, worker’s compensation and employee retirement costs – increased “significantly” past decade and between 2009 and 2010.

The RIPEC report attributed this primarily to unemployment compensation, which increased more than seven-fold across the country and five-fold in Rhode Island from 2000 to 2010. The $43.11 per $1,000 of personal income spent on insurance trust expenditures in Rhode Island was the third highest in the country.

To view the full RIPEC report, visit: www.ripec.org.

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