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Revision as of 13:43, 28 August 2014


Rhode Island state budget

Flag of Rhode Island.png
Budget calendar:  Annual
Current fiscal year:  2014
State credit rating:  AA (as of May 2012)
Current governor:  Lincoln Chafee
Financial figures
GF expenses[1]:  $3.268 billion (estimated for FY 2013)
All funds expenses:  $8.133 (estimated for FY 2013)
Spending % change:  Green Arrow Up Darker.svg2.86%[2]
% from federal funding:  33.96%
State debt:  $18,863,153,000
Per capita state debt:  $17,960
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Rhode Island, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Rhode Island's total expenditures increased by approximately $0.779 billion, from $7.354 billion in 2009 to $8.133 billion in 2013. This represents a 10.59 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in July of the year preceding the start of the new fiscal year.
  2. Agencies submit their budget requests to the governor in September and October.
  3. Agency hearings are held in November and December. Public hearings are held in March and April.
  4. The governor submits his or her proposed budget to the state legislature in January.
  5. The legislature typically adopts a budget in June. The fiscal year begins July 1.

In Rhode Island, the governor has no veto authority over the budget.[6]

The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to pass a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Rhode Island $3,268 $2,659 $2,122 $84 $8,133 $7,734.58
Connecticut $19,030 $2,555 $3,618 $2,935 $28,138 $7,824.63
Massachusetts $25,509 $15,548 $17,135 $2,106 $60,298 $9,009.35
New Hampshire $1,262 $1,601 $2,080 $81 $5,024 $3,796.11
Vermont $977 $1,662 $2,248 $73 $4,960 $7,915.36
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Rhode Island can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Rhode Island 14.2% 13.2% 1.4% 25.0% 2.4% 6.5% 37.4%
Connecticut 13.9% 10.3% 1.4% 21.4% 2.5% 10.0% 40.6%
Massachusetts 10.7% 9.3% 2.5% 20.7% 2.1% 6.2% 48.6%
New Hampshire 23.5% 2.7% 1.9% 23.9% 2.1% 10.1% 35.9%
Vermont 31.1% 1.8% 2.1% 25.3% 2.8% 12.8% 24.2%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, the share of the total budget spent on elementary and secondary education fell by 1.30 percentage points, or 8.4 percent. During the same period, transportation expenditures rose by 1.80 percentage points, or 38.3 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 14.2% 13.2% 1.4% 25.0% 2.4% 6.5% 37.4%
2011 14.4% 12.4% 1.4% 25.9% 2.3% 4.9% 38.7%
2010 14.1% 11.8% 1.5% 25.0% 2.2% 5.3% 40.1%
2009 14.9% 3.3% 1.8% 25.8% 2.5% 6.3% 45.3%
2008 15.5% 11.8% 2.0% 25.9% 2.8% 4.7% 37.3%
Change in % -1.30% 1.40% -0.60% -0.90% -0.40% 1.80% 0.10%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Rhode Island $873 $1,075 $137 $1 $1,238 $3,324 $3,161.17
Connecticut $3,857 $8,719 $742 $612 $5,437 $19,366 $5,385.31
Massachusetts $5,164 $12,831 $1,822 $0 $7,352 $27,169 $4,059.42
New Hampshire $0 $0 $552 $3 $1,728 $2,283 $1,725.03
Vermont $231 $661 $95 $0 $302 $1,289 $2,057.04
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Rhode Island ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $873 $1,075 $137 $1 $1,238 $3,324 $3,161.17
2012 $851 $1,060 $123 $1 $1,235 $3,271 $3,114.34
2011 $813 $1,021 $85 $1 $1,164 $3,084 $2,936.16
2010 $803 $898 $147 $1 $1,167 $3,017 $2,866.05
2009 $808 $941 $104 $2 $1,170 $3,025 $2,872.17
Change in % 8.04% 14.24% 31.73% -50.00% 5.81% 9.88% 10.06%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: H 5127

Fiscal year 2014

Rhode Island state budget -- 2014
Rhode Island State Legislature
Text:H 5127
Legislative history
Introduced:January 22, 2013
House:June 26, 2013
Senate:June 27, 2013
Governor:Lincoln Chafee
Signed:July 3, 2013

On July 3, 2013, Governor Lincoln Chafee signed the fiscal year 2014 budget into law. To view the full text of the budget bill, click here.

Fiscal year 2013

See also: Rhode Island state budget (2012-2013)

Fiscal year 2012

See also: Rhode Island state budget (2011-2012)

Fiscal year 2011

See also: Rhode Island state budget (2010-2011)

Fiscal year 2010

See also: Rhode Island state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Rhode Island ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $3,110 39.3% $2,000 25.3% $2,599 32.9% $198 2.5% $7,907
2010-2011 $2,956 37.1% $2,015 25.3% $2,749 34.5% $244 3.1% $7,964
2009-2010 $2,864 36.7% $2,032 26% $2,813 36% $104 1.3% $7,813
Averages: $2,976.67 38% $2,015.67 26% $2,720.33 34% $182 2% $7,894.67
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Rhode Island had a state debt of over $18 billion. Its state debt per capita was $17,960. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[14][15]

Total state debt in Rhode Island[16]
Type Totals U.S. rank
Total state debt $18,863,153,000 40
Per capita debt $17,960 16
State and other fund expenditures $5,110,000,000 31

Public pensions

See also: Rhode Island public pensions and Rhode Island public employee salaries

A 2012 report from the Pew Center on the States noted that Rhode Island's pension system was funded at 49 percent at the close of fiscal year 2010, well below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[17]

The funding ratio for the state's pension system increased from 59.65 percent in fiscal year 2007 to 61.16 percent in fiscal year 2012, an increase of 1.51 percentage points, or 2.5 percent. Likewise, unfunded liabilities decreased from nearly $5 billion in fiscal year 2007 to approximately $4.8 billion in fiscal year 2012.[18][19][20][21]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[22]

The table below lists the Standard and Poor's credit rating for Rhode Island from 2001 to 2012 (grades from surrounding states are provided for additional context).[22]

S&P credit ratings from 2001 to 2012
Rhode Island Connecticut Massachusetts New Hampshire Vermont
2012 AA AA AA+ AA AA+
2011 AA AA AA AA AA+
2010 AA AA AA AA AA+
2009 AA AA AA AA AA+
2008 AA AA AA AA AA+
2007 AA AA AA AA AA+
2006 AA AA AA AA AA+
2005 AA AA AA AA AA+
2004 AA AA AA- AA AA+
2003 AA AA AA- AA AA+
2002 AA AA AA- AA+ AA+
2001 AA- AA AA- AA+ AA+

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[23]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[23]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Rhode Island 33.96% $2,310,656,000 23
Connecticut 23.61% $5,781,844,000 46
Massachusetts 28.81% $12,920,153,000 36
New Hampshire 29.00% $1,693,289,000 34
Vermont 34.79% $1,904,382,000 18

Stimulus

Rhode Island received $1.03 billion in federal stimulus funding between February 2009 and June 2013.[24]

Budget transparency

Transparency evaluation
RI Open Government
Searchability Y
600px-Yes check.png
Grants Y
600px-Yes check.png
Contracts Y
600px-Yes check.png
Line item expenditures P
Partial.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries N
600px-Red x.png
Last evaluation date unknown.
See also: Evaluation of Rhode Island state website and Constitutional provisions regarding reading of bills

Rhode Island began posting its checkbook register online in February 2008. The site was created using existing monies within the state budget. It allows citizens to view the Treasury's Accounts Payable expenditures.[25] The checkbook register was posted by the Treasurer of Rhode Island, Frank T. Caprio, as the fulfillment of a campaign promise made in 2006:

"This pilot project achieves a key priority of my administration. Our hope is that the Office of the General Treasurer's transparency site will quickly become the model for state and local government in their efforts to be more accessible and accountable to the taxpayers of Rhode Island," Caprio said.[25]

The site also contains information on the current year's fiscal statement, budgets and some general salary data.

Rhode Island's Department of Administration began posting its expenses online in February 2009.[26]

The State of Rhode Island maintains its own Transparency Portal, which contains links to financial records and personnel statements for 15 government departments. It also links to the RIPAY website, which contains expenditures organized by vendor.[27]

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Rhode Island, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[28][29]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Rhode Island tied for first in the nation with two other states, earning eight out of eight possible points.[29]

Rhode Island - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget Y
600px-Yes check.png
Multi-year forecasting
{{{1}}}
Annual cycle Y
600px-Yes check.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Nonpartisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations Y
600px-Yes check.png
TOTAL 8

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[29]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[30] According to the report, Rhode Island received a grade of D+ and a numerical score of 62, indicating that Rhode Island was "lagging" in terms of transparency regarding state spending.[30]

Accounting principles

See also: Rhode Island government accounting principles

The Office of the Auditor General (OAG) is the state's legislative audit agency, conducting financial and performance audits to provide independent information to the General Assembly on a variety of topics, including the state's financial condition, its use of federal funds in compliance with federal law and regulations, and whether programs are operating efficiently and effectively. The OAG's audit reports are published online.

The Office of Accounts and Control is responsible for the financial integrity and accountability of state government through sound administrative and accounting controls and procedures. The office is also responsible for the preparation and/or coordination of several publications, including the Comprehensive Annual Financial Report, Condensed State Financial Report, State Payroll Manual, Procedural Handbook of the Department of Administration, and the Consolidated Statewide Cost Allocation Plan.[31]

Contact information

Rhode Island Department of Administration - Budget Office
One Capitol Hill, 4th Floor
Providence, Rhode Island 02908
Telephone: 401-222-6300

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  15. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  16. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Pew Center on the States, "Widening Gap Update: Rhode Island," June 18, 2012
  18. Employees' Retirement System of Rhode island, "Actuarial Valuation - June 30, 2012," accessed November 19, 2013
  19. Municipal Employees' Retirement System, "Actuarial Valuation - June 30, 2012," accessed November 19, 2013
  20. State Police Retirement Benefits Trust, "Actuarial Valuation - June 30, 2012," accessed November 19, 2013
  21. Judicial Retirement Benefits Trust, "Actuarial Valuation - June 30, 2012," accessed November 19, 2013
  22. 22.0 22.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  23. 23.0 23.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  24. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  25. 25.0 25.1 Rhode Island.gov, "Treasurer Caprio Debuts State's First Ever Online, Real-time Checkbook of State Spending," February 9, 2009
  26. Rhode Island.gov, "Department of Administration Launches Transparency Portal," February 16, 2009
  27. Rhode Island Transparency Portal, "Home page," accessed May 1, 2014
  28. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  29. 29.0 29.1 29.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  30. 30.0 30.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  31. Rhode Island Office of Accounts and Control, "Home page," accessed November 10, 2009