Breaking Down In Detail Rhode Island’s Tax and Fee and Charge Ranking

Assessing monies collected by state and local governments, the Rhode Island Public Expenditures Council ranks Rhode Island 7th in the United States in “state and local taxes collected per $1,000 of personal income”, but 26th in “state and local tax collections, charges and miscellaneous general revenues per $1,000 of personal income”.

To some, the meaning of the difference between the two metrics is clear — as long as there exists any metric showing Rhode Islanders not near the top in what they are required to pay to the government, taxes need to be raised! Others don’t believe that the goal of tax policy should be to max out on every possible measurement of how much Rhode Islanders are paying and would like to figure out an explanation for the difference. Count me amongst the second group.

RIPEC used revenue data compiled by the Census Bureau for 2005 and income data compiled by the Bureau of Economic Analysis for 2004 in their 2007 report. Using figures available online (here and here), I was able to produce results for taxes paid per $1,000 of income within a few cents of RIPEC’s state-by-state analysis and reproduce RIPEC’s rankings to within a place or two; the data available to me showed Rhode Island ranking 8th instead of 7th in taxes collected (see the table below the fold for the complete 50 state results and some brief speculation on the sources of the discrepancies).

Now, the census data breaks down “charges and miscellaneous general revenues” into a number of specific categories, providing dollar figures for each by state. Just like states can be ranked in terms of their total tax collections, they can also be ranked in terms of how much they collect in each “miscellaneous” sub-category. Here are Rhode Island’s rankings, per $1,000 of personal income, in each miscellaneous category used by the Census Bureau…















Miscellaneous
Revenue Category
Amount
Collected
RI
Rank
Housing and community development $34,116,0004
Air transportation (airports) $60,009,00014
Other general revenue $466,844,00016
Other charges $158,840,00026
Highways $12,870,00030
Sea and inland port facilities $456,00033
Education (including higher education) $347,022,00034
Natural resources $3,801,00038
Parks and recreation $19,545,00041
Sewerage $81,992,00041
Parking facilities $1,031,00045
Solid waste management $18,530,00045
Hospitals $4,267,00049

Rhode Island’s 49th place ranking in “hospital” fees/miscellaneous charges is the most significant figure in this table, because by itself, it appears to account for much of the difference in Rhode Island’s taxes-only versus taxes-plus-charges rankings. In terms of taxes plus “hospital” charges collected, the results for the 50 states (with absolute collections reported in terms of thousands-of-dollars) are…





















































RankStateTaxes
Collected
Revenue From
Hospitals
Aggregate
Income
Taxes + Hosp. Rev.
per $1K of Income
1 Wyoming $2,671,853 $612,601 $17,759,572 $184.94
2 New York $111,107,619 $5,309,562 $739,795,482 $157.36
3 Hawaii $5,523,747 $343,398 $41,074,817 $142.84
4 Louisiana $14,301,995 $2,404,463 $122,294,458 $136.61
5 Alaska $2,947,034 $85,083 $22,459,220 $135.01
6 Maine $5,219,708 $71,413 $39,510,387 $133.92
7 Mississippi $7,490,681 $1,852,745 $69,778,380 $133.90
8 South Carolina $11,800,640 $3,355,730 $113,347,985 $133.72
9 New Mexico $6,069,328 $434,536 $49,798,607 $130.60
10 Vermont $2,574,761 $0 $19,749,931 $130.37
11 Wisconsin $21,403,526 $893,667 $174,740,109 $127.60
12 West Virginia $5,550,746 $263,029 $45,731,471 $127.13
13 Utah $7,303,964 $782,270 $63,613,266 $127.12
14 Nebraska $6,586,238 $444,248 $55,486,270 $126.71
15 Indiana $21,337,077 $2,233,930 $186,222,441 $126.57
16 California $146,616,887 $12,671,974 $1,265,657,107 $125.85
17 Arkansas $8,053,926 $838,198 $70,706,380 $125.76
18 Ohio $41,714,754 $2,498,092 $351,630,721 $125.74
19 Iowa $9,704,861 $1,635,484 $90,515,010 $125.29
20 Idaho $4,182,546 $560,393 $38,122,727 $124.41
21 North Carolina $27,307,108 $3,447,778 $251,284,628 $122.39
22 Rhode Island $4,499,624 $4,267 $36,814,199 $122.34
23 Connecticut $18,896,812 $373,913 $159,255,636 $121.00
24 Minnesota $20,956,639 $1,157,323 $183,794,728 $120.32
25 New Jersey $42,557,354 $790,677 $361,678,619 $119.85
26 Alabama $11,686,675 $3,421,130 $126,282,975 $119.63
27 Kentucky $12,261,812 $1,084,068 $111,675,996 $119.51
28 Nevada $9,043,570 $519,296 $80,311,322 $119.07
29 Michigan $35,295,158 $2,634,009 $318,762,176 $118.99
30 Kansas $9,385,496 $547,526 $84,619,970 $117.38
31 Georgia $27,486,109 $3,104,011 $264,635,496 $115.59
32 Pennsylvania $46,019,258 $1,777,028 $413,900,836 $115.48
33 Washington $22,974,042 $2,058,441 $218,366,056 $114.64
34 Arizona $18,331,117 $466,830 $164,941,395 $113.97
35 North Dakota $2,121,388 $2,962 $18,674,433 $113.76
36 Florida $59,863,884 $4,195,951 $565,211,107 $113.34
37 Illinois $49,138,495 $1,201,295 $445,269,246 $113.05
38 Delaware $3,277,387 $14,633 $29,269,007 $112.47
39 Virginia $27,659,186 $2,107,533 $267,784,599 $111.16
40 Massachusetts $28,756,962 $449,515 $266,818,043 $109.46
41 Maryland $23,899,055 $134,644 $219,937,707 $109.28
42 Oregon $11,106,991 $879,686 $109,807,900 $109.16
43 Oklahoma $10,073,102 $790,853 $100,077,751 $108.56
44 Missouri $17,374,264 $1,497,277 $173,968,028 $108.48
45 Texas $69,133,862 $6,042,974 $695,503,614 $108.09
46 Montana $2,722,702 $49,063 $25,813,892 $107.37
47 Tennessee $15,993,136 $2,137,373 $174,740,992 $103.76
48 Colorado $15,680,821 $1,146,051 $163,805,332 $102.72
49 New Hampshire $4,319,777 $6,005 $47,170,059 $91.71
50 South Dakota $2,103,820 $36,158 $23,881,413 $89.61

Just this single category, where other states collect ample revenues, but Rhode Island doesn’t, drops Rhode Island 14 spots in revenue ranking, from 8th to 22nd place.

This result raises an obvious question for anyone arguing that Rhode Island’s middle-of-the-pack ranking in taxes plus “miscellaneous” charges justifies a tax increase: why should broad-based taxes be used to compensate for a lack of revenue from specific areas that most other states target directly? Are hospitals an area where Rhode Island has fewer expenses than other states (hard to believe, as the figures would then imply that RI had only 1/3 the hospital capacity of Delaware, or less than 1/10th that of Maine), is this an area being mightily subsidized compared to other states, or is there some other explanation?


The table below contains the rankings of states by taxes paid per $1,000 of income. These numbers differ slightly from RIPEC’s 2007 analysis. Possible explanations for the discrepancies are adjustments to source data that may have been made since RIPEC’s retrieved the inforamtion and/or RIPEC’s possible addition/removal of certain classes of revenue to the category of taxes for the purposes of its analysis (for example, I’m not sure where gambling money fits into the Census Bureau classification of revenues, and whether RIPEC considers gambling money to be a tax or a miscellaneous charge).





















































RankState Taxes per
$1K Income
1 Wyoming $150.45
2 New York $150.19
3 Hawaii $134.48
4 Maine $132.11
5 Alaska $131.22
6 Vermont $130.37
7 Wisconsin $122.49
8 Rhode Island $122.23
9 New Mexico $121.88
10 West Virginia $121.38
11 Nebraska $118.70
12 Connecticut $118.66
13 Ohio $118.63
14 New Jersey $117.67
15 Louisiana $116.95
16 California $115.84
17 Utah $114.82
18 Indiana $114.58
19 Minnesota $114.02
20 Arkansas $113.91
21 North Dakota $113.60
22 Nevada $112.61
23 Delaware $111.97
24 Pennsylvania $111.18
25 Arizona $111.14
26 Kansas $110.91
27 Michigan $110.73
28 Illinois $110.36
29 Kentucky $109.80
30 Idaho $109.71
31 North Carolina $108.67
32 Maryland $108.66
33 Massachusetts $107.78
34 Mississippi $107.35
35 Iowa $107.22
36 Florida $105.91
37 Montana $105.47
38 Washington $105.21
39 South Carolina $104.11
40 Georgia $103.86
41 Virginia $103.29
42 Oregon $101.15
43 Oklahoma $100.65
44 Missouri $99.87
45 Texas $99.40
46 Colorado $95.73
47 Alabama $92.54
48 New Hampshire $91.58
49 Tennessee $91.52
50 South Dakota $88.09

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Jeff Grybowski
Jeff Grybowski
13 years ago

I have analyzed data like this many times while working in state government and I know that the data on charges needs to be viewed very carefully.
Indeed, it is almost impossible to compare the “charges” data across states. The hospital revenue you note is a good example. Hospital charges relates to fees assessed patients at public hospitals. Since RI has only one public hospital (Eleanor Slater Hospital operated by MHRH), with relatively few beds, we don’t collect much revenue.
Indeed, this is an example of a policy choice that leads to greater state expenditues on social programs. Instead of maintaining a centralized hospital system for the long-term disabled and those who mental health issues, RI led the nation in the deinstitutionalization campaign. So, people who otherwise would be treated in a state hospital are now treated by community providers. The state does not collect hospital fees, it pays community providers to provide services.
Another example is the parking fee category. The state does not operate many parking garages, so our rank in that charge category is low. I can’t imagine that our failure to operate parking facilities could be used by someone to argue that our taxes are too low. But, I suppose I should not assume that.
Anyway, comparing state tax data is a relatively safe exercise. The definitions, at least in the main categories of income, sales, and property taxes, are relatively consistent across the nation. The categorization of other “charges” on the other hand is a risky venture and raises more questions than it answers.

Monique
Editor
13 years ago

“The state does not operate many parking garages”
It’s not appropriate to compare RI in a revenue area from which it has chosen to divest or into which it never ventured.
Thank you for sorting this out, Andrew. It looks like Rhode Island’s ranking as seventh or eighth highest taxed stands.

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