Local
Rhode Island’s income growth trails U.S. as tax and spending burdens rise relative to income
Rhode Islanders’ per capita personal income grew 25% from fiscal 2019 to 2024, compared with 32% nationally, according to a new state comparison. The report also finds that Rhode Island’s rankings for spending and tax revenue rose when measured against residents’ income.
PROVIDENCE — Rhode Island residents’ incomes grew more slowly than the national average between fiscal years 2019 and 2024, while the state’s spending and tax revenues took up a larger position relative to those incomes, according to a report released Monday by the Rhode Island Public Expenditure Council.
Per capita personal income in Rhode Island increased 25% during the period, compared with 32% across the country. The state fell from 16th to 22nd among states for per capita income, the report found.
Measured against personal income, Rhode Island’s total spending ranked 18th highest nationally, up from 24th in 2019. Tax revenues ranked 13th, compared with 15th five years earlier. Those rankings describe spending and revenue relative to income, rather than changes in residents’ tax bills or total government spending alone.
“The cost of state and local government is outpacing Rhode Islanders’ ability to pay,” said Michael DiBiase of the council.
The report highlights notable differences among categories of spending. Rhode Island ranked first nationally in fire-protection spending and spent 1.7 times the New England level on public safety when measured against income. Government administration spending ranked seventh per capita and sixth by income, at 1.6 times the regional level by income.
Education spending ranked 19th per capita and 24th relative to income. The state ranked 11th and eighth, respectively, for elementary and secondary education spending, but 45th and 43rd for higher education. Property taxes ranked 10th per capita and eighth as a share of income.
The report also found that sales and excise tax revenue rankings rose substantially since 2019: Rhode Island ranked 17th per capita and 19th relative to personal income, compared with 28th and 33rd in 2019. Federal aid was among the highest nationally, ranking 10th per capita and 14th by income. Corrections spending ranked 18th relative to income despite the state’s low incarceration rate.
The figures offer a snapshot of how state and local government costs compare with residents’ income. They do not, on their own, explain why income growth lagged or identify which policies or economic changes drove the differences.