Cost of Government – Which Town Has the Cheapest Cost/Resident?

I don’t want to overwhelm with charts, but I’ve got ’em! Similar to my previous posts–based on the ProJo’s work–on cost per resident for footing the payroll for schools (with some elaboration), I’ve compiled the same data for other areas of government. But instead of “embedding” all of those into this post, I’ll just give you the links and they’ll “pop-up” for you (just click ’em): Public Safety; Social Programs; Public Services; Administration; Regulatory; Legislative; Other Government.
Now I can focus on the one uber-chart I want to present: the Anchor Rising Cost/Resident Index.
Basically, I assigned a number ranking to each community based on the cost/resident for each component of government as broken out above. I then added the rankings for each and came up with the Index number: the higher the number, the lower the cost/resident. (For municipalities that shared school systems, I gave each town the ranking number for that system. For example, Bristol and Warren each got a 31 for Schools). The benefit of ranking the cities and towns this way is it somewhat mitigates against the cost/resident in one category from overpowering the others.
Below you’ll find the list, ranked by cheapest cost/resident to most expensive. (But remember, this is based on just payroll costs, not benefits). So, if you’re thinking of moving, but would like to try to stay in Rhode Island (ahem, Justin), perhaps the communities at the top of this list may be worth taking a look at.


AR-costperres-index.JPG

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Thomas Schmeling
Thomas Schmeling
13 years ago

Marc, I think that breaking down the costs by function as you have done is very useful. I am much less enthusiastic about your overall index for two reasons: 1. It’s based on rankings. Every time you turn a measured number into a rank, you lose information. The distance between #1 and #2 might be twice the distance between #2 and #3. For instance, New Shorham residents pay more than twice the amount per resident for non-school employees than the next highest, Newport. Why throw that information away? 2. Combining these various ranks probably makes matters worse. If I understand what you’re doing, a town that ranks #1 on a very small budget item and #39 on a large one, winds up with the same rank as a town that is #39 on the small item and #1 on the big item. That does not seem right, because the bigger item should weigh more. In short, why not just calculate the total cost per resident and report that? It would both be easier to understand and contain more information. In addition, I’m not sure Justin should follow your advice on moving, because I don’t think cost-per-resident measured by your chart is the same as cost-to-resident. ChuckR’s comment on your previous post made me note that there is something strange going on in the ProJo article. It starts off looking like it’s about municipal budgets and represents costs-to-residents. But when they actually look at salaries, etc. The are including state dollars as well, are they not? If so, the portion of costs bourn by residents varies from town to town. (It’s not clear whether your index includes school costs, which I believe are most affected by state aid). If you want to know the dollar costs of living in a place,… Read more »

chuckR
chuckR
13 years ago

Thomas
Yep, read that. Was a Providence resident for 14 years until it finally dawned on me that by moving to Jamestown, I could cut my commute distance in half and it would be less nerve wracking to boot. Also, my vote goes much further in J’town than in Providence and the J’town/N. Kingstown schools are better.
Not sure that ranking number reflects the already sizable boost Prov gets from the rest of the state. Taking about 85% of the education aid to Prov as OPM, that is about $160MM. In fairness, the state should pay something as a PILOT payment, but I’ll bet it wouldn’t be that high.

Thomas Schmeling
Thomas Schmeling
13 years ago

A lot of this is “to each his own”. I may pay a little more to live in Providence, but I’m 10 minutes from a lot of the things that I want to have in my daily life. Not having I-95 be a part of my daily life makes me happy.
On the economic issue, as my comments in the other thread obviously indicate, I disagree. The “sizable boost Prov gets from the rest of the state” is more than offset by the boost that the state’s workers and economy get from Providence’s businesses, colleges and so on.

Ragin' Rhode Islander
Ragin' Rhode Islander
13 years ago

–On the economic issue, as my comments in the other thread obviously indicate, I disagree. The “sizable boost Prov gets from the rest of the state” is more than offset by the boost that the state’s workers and economy get from Providence’s businesses, colleges and so on.
Except for that giant sucking sound of suburban tax dollars being burned off in the bonfire of Providence’s welfare extravaganza.
And just wait till Ciccy wants us to bail out his unfunded pension liabilities.
Net drain.

Thomas Schmeling
Thomas Schmeling
13 years ago

Ragin’,
Are you refering to “suburban” tax dollars that are generated by Providence’s robust economy? Again, Providence provides 41,000 jobs more jobs to the rest of Rhode Island than the rest of RI provides to Providence residents. That’s somewhere around $2 Billion, which is roughly 10% of the total income of all state residents
I hear a “sucking sound” too, but it goes the other direction. If you have an analysis that contradicts this, rather than just an assertion, I will be happy to learn from you.

chuckR
chuckR
13 years ago

Trying to quantify the value of a city to the surrounding cities, towns and suburbs is about as easy as nailing jello to a wall. All those suburban workers have schools, police, fire protection, water/sewerage services and so forth provided by their suburbs. Whats the value of not further overloading Providences infrastructure? Providence and the rest of the core cities have used the Bay as their toilet for a century with the combined storm/sanitary sewers. What is the avoided cost of 41000 more workers and their families not further burdening that antique system? Or, let me guess, you don’t want them for your neighbors – to live in Providence – you just want their money. You get an appropriate amount, via increased economic activity and taxes on the business property where they work and the inventory.
The plural of anecdote is not data, but here’s a personal one anyway. In the past 31 years, I have not made a living in either Providence or anywhere else in Rhode Island. Based on gross income, my company is probably 97%-98% out of state revenue. Most of the remaining few percent came from the Navy Labs. My work is digital and the in-state infrastructure I use is a self-supporting airport and a highway system largely paid for by the Feds. Really, why should I send a cent to Providence?

Thomas Schmeling
Thomas Schmeling
13 years ago

“All those suburban workers have schools, police, fire protection, water/sewerage services and so forth provided by their suburbs ”
Yes, and they are paid for to a very significant extent with wages produced by the Providence economy. In a large number of towns, more residents work in Providence than their own town.
“Or, let me guess, you don’t want them for your neighbors – to live in Providence – you just want their money”
That is a unreasonable interpretation of what I am saying. I am not trying to be hostile toward people live elsewhere. I am trying to defuse some of the, in my view irrational, hostility that people have toward Providence.
I won’t disagree that the economics of this are not simple. In fact, that’s been my point. Some people think it’s enough to say that “Providence gets a larger share of state dollars, so it’s obviously a net drain on the rest of the state”. I think that’s absurdly one-sided.
“What I want”, then, is for people to stop talking about the economic relationship between Providence and the rest of RI as if only one side of the equation (state expenditures) matters. It is time to recognize that Providence’s economy makes a massive contribution to the economic well-being of people in almost every city and town. Ultimately, I would like to stop all of this this unproductive, and actually harmful, talk about “my town vs. your town”.
“The plural of anecdote is not data”
Very well said.

Monique
Editor
13 years ago

Excellent post, Marc.
I am not surprised at where SK ranked. I am surprised that Jamestown is third from the bottom. (… beautiful island, by the way.)

chuckR
chuckR
13 years ago

Thomas – you still haven’t addressed why the Providence government should have a crack at the wages of the people who work in the city. They do already get quite a bit indirectly through the large transfer in state school aid. Has this relief prompted your mayor and council to address their pension obligations, wages and other benefits and to institute reforms, reduce (or at least freeze) the number of employees and so forth?
If you are upset about the us vs them aspects of this, perhaps you could ask your mayor to climb down off his high horse about getting even more state aid. That aid largely comes from us or them depending on your viewpoint. He could also start addressing some of the city’s deep seated budget problems. Its nothing personal. I miss many things about Providence, but not the city government.
BTW, that anecdote thingy is certainly not original with me.
Monique – Jamestown is small and receives, IIRC, about $80/resident in state school aid, while Providence receives about $1100/resident – numbers from some years back. Factor this into Marc’s ranking and it will change. Because of the multi-million dollar barns being put up on the north end of the island, we have so far been able to be a little sloppier fiscally than our reputation might lead you to suspect. I remember one year where the mil rate went down, the budget up and my taxes down – all due to some big new houses. We all know where that leads, however.

Marc
13 years ago

All, thanks for the comments. I’m really just trying to find another way of looking at things. I realize that the info and conclusions aren’t all inclusive, which is why I agree with the points brought up by Chuck and Thomas that there are other sources to consider.

chuckR
chuckR
13 years ago

Marc
Another comment on taxes. I have a septic system and a deep well. The well comes along with an electricity gobbling 220V deep well pump which typically wears out every 10 years (est annual depreciation and operating cost $100). The deep well added about $5000 to the land purchase price. I also have a $1500 water treatment system that needs about $150 in servicing every year. The town makes me pay for a septic system inspection – $100 every other year. The cost of my septic system was $16500 19 years ago, today more like $25000-30000. Add the capital improvements up and figure out what the mortgage payment is and you get around $2000 per year. Add in operating and depreciation expenses and you are around $2500 per year. This is the cost of my ‘municipal’ water and sewerage services. I don’t pay a town fee/tax for that, but I maintain when considering taxes, you must factor this in, offset in Thomas’ case by his quarterly fees for water and sewerage. Oh, add another $300 per year for garbage pickup. And then add in the differential in school aid (family of four here). This is why I get a little upset when whomever is the mayor of Providence gets the begging bowl out. I don’t dislike people in Providence and I do like the amenities it offers. I can’t stand the politics. I was there for Buckles Melise, for the sidewalk inspector no-shows, for the unqualified dope at the zoo who fed a dead tortoise for a week and for all the other scams of the 70s and 80s. Voted with my feet. Will pay a premium in taxes to avoid it.

Ragin' Rhode Islander
Ragin' Rhode Islander
13 years ago

— Are you refering to “suburban” tax dollars that are generated by Providence’s robust economy? Again, Providence provides 41,000 jobs more jobs to the rest of Rhode Island than the rest of RI provides to Providence residents. That’s somewhere around $2 Billion, which is roughly 10% of the total income of all state residents I hear a “sucking sound” too, but it goes the other direction. If you have an analysis that contradicts this, rather than just an assertion, I will be happy to learn from you.
Thomas –
I suppose that none of us can prove with certainty. But I think you greatly overestimate Providence as the economic engine of RI.
Consider that many of our largest (and better paying) employers are outside of Providence: AMICA; CVS; Fidelity; Amtrol; Electric Boat; Amgen; FM Global; APC.
Also, much of Providence’s payroll is government employees. These folks don’t represent economic activity but transfer payments – their incomes are taken from taxpayers’ wallets and transferred into their own. I’m not denigrating government employees across the board – but private sector economic activity is what produces wealth, not governmental activity.

Thomas Schmeling
Thomas Schmeling
13 years ago

Ragin’,
I don’t think I’m overestimating, but I’m happy to consider challenges.
To address your two points, using the RI Dept. of Labor and Training stats cited earlier:
1) High-paying jobs are indeed clustered in Providence. The average salary in Providence was $45,434. That was just about about $6,400 higher than the rest of the state, excluding Providence. Two communities exceed Providence in average salary: West Greenwich and Portsmouth.
2) The percentage of jobs in Providence that were government jobs was 14%. The statewide average excluding Providence was 13%. I don’t think that’s significant difference.

Thomas Schmeling
Thomas Schmeling
13 years ago

Marc- There are lots of ways of looking at the numbers, some better, some worse. Anybody who is willing to work through the data to reach the most reasonable conclusions gets my high regard.
ChuckR- You say “you still haven’t addressed why the Providence government should have a crack at the wages of the people who work in the city.”
I’m not saying that, exactly. Providence provides a net 40,000+ high-paying jobs to residents of other cities. Given that, I am saying that I am quite tired of hearing Providence called a “black hole”, “sucking sound”, etc. It’s simply a one-sided and therefore incorrect, view.
Whether the rule you prefer is “as you contribute, so shall you receive” or “from each according to his ability, to each according to his need”, or something in between, Providence deserves at least the proportion of state aid that it currently gets. Moreover, the current system of heavy reliance on property taxes for education (now 49th in the nation!) means that pool of aid is much smaller than in other states, which works against Providence (and some other communities) and in favor of the suburbs.

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