RIPEC Study: Tax Revenues Falling Dramatically in RI
Tuesday, November 15, 2011
The Rhode Island Public Expenditure Council (RIPEC) Monday released its annual "How Rhode Island Compares" report, which provides details on how state and local government revenue sources from fiscal year 2009, the latest year for which national data are available.
The publication compares Rhode Island’s fiscal system with those of the other 49 states and the national average using data released by the US Census Bureau on October 31, 2009.
In FY 2009, state and local governments in Rhode Island collected $1.9 billion, or 21.0 percent less revenue compared to FY 2008. Nationally, revenues declined by $587.5 billion, or 22.1 percent. The majority of revenue losses were related to negative investment returns in social insurance trusts (including public employee retirement systems, workers compensation and unemployment insurance trust funds). Tax collections were also lower in FY 2009 than in FY 2008, as most tax revenue categories fell in Rhode Island and across the nation, with the exception of property taxes.
Rhode Island’s tax burden remains among the highest in the country, ranking 11th highest as a share of personal income, and 13th highest on a per capita basis. In FY 2008, the state’s tax burden ranked 17th highest per $1,000 of personal income and 13th highest per capita. Although Rhode Island moved up in the national rankings when tax burden was measured as a share of personal income, year-over-year tax collections fell from $114.18 per $1,000 of personal income to $109.84 per $1,000 of personal income. This is in part a reflection of the slower growth in personal income in Rhode Island compared to the rest of the country.
By either measure – per $1,000 of personal income or per capita – Rhode Island’s ranking was driven by the state’s high property tax collections. Although Rhode Island ranked 11th highest for total tax collections as a share of personal income, the state’s tax collections were lower than the national average for all taxes with the exception of the property tax. Similarly, the state’s per capita tax collections were, in general, lower than, or similar to, the national average for all but the property tax.
Declining tax collections were primarily a result of individual income tax losses. This, coupled with increases in property taxes, resulted in the growing reliance on property taxes between the two years in Rhode Island and nationally. Property taxes accounted for almost 45 percent of all state and local tax revenues in FY 2009, compared to FY 2008, when property taxes represented 42.3 percent of all tax collections. At the same time, the growing role property taxes play in supporting government is part of a longer trend; property taxes have increased their share of revenues in Rhode Island every year since FY 2006.
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Comments:
Lance Chappell
9:17am on Tuesday, November 15, 2011
As long as the rates keep going up, the government will take less in. Property tax remains the big drag on the RI economy. People are fleeing the state due to the high taxes and declining property values. Municipalities are now getting into trouble with their tax collections. Something has to give and it is the taxpayer.....their fed up.
pearl fanch
10:23am on Tuesday, November 15, 2011
City / Town officials, here's a tip. The more you continue to raise taxes and rape your citizens, the harder they will try to take advantage of every single loop hole, delay in paying their taxes, and make it more difficult for you.
I know that none of you officials have ANY education in finance, but collectively, you need to come up with a plan that will protect your residents. You might want to start with SMALLER friggin government!!!!!!!!!!
Gary Arnold
11:11am on Tuesday, November 15, 2011
Do you hear that sucking sound, that's your hard earned money going to the incompetents that are in our state and local governments.
The woosh sound is the people leaving RI as fast as they can.
The sinking sound, well that is RI.
Russ C
2:18pm on Tuesday, November 15, 2011
"Rhode Island’s tax burden remains among the highest in the country.."
Hmmm, not even in the top 20% by any metric and that's "the highest" to you folks?
Come on, "News Team." Do the math. These stats lose all meaning when you simply parrot the rightwing talking points.
pearl fanch
5:45pm on Tuesday, November 15, 2011
Russ, seriously? You're ok with the tax rates and status in RI?
You and Gov. Gump.
Michael Trenn
9:36pm on Tuesday, November 15, 2011
Taxpayers are leaving. What will the Governot do when all that is left are the illegals, the welfare recipients, and the public employees?