FY19 Budget: When Government Outgrows the Governed

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With the House budget released, the RI Center for Freedom & Prosperity has updated its annual chart showing how the state’s spending has actually grown during this century versus inflation and population.  As you can see, it isn’t a pretty picture:

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RI-expendituresallfunds-2001-2019

 

For some perspective, the state budget has grown at a compound annual rate of 3.9% per year.  Inflation’s growth rate, by comparison, has been 2.0%, and the population’s has been 0.0%

Granted, for the ease of the comparison (and making it easy to repeat), we’ve just used the national inflation rate, here, and people periodically argue that some other metric would be preferable.  Well, using data from the Bureau of Economic Analysis, personal income in Rhode Island has grown at a rate of 3.0% per year, and the state’s gross domestic product (GDP) has grown at 3.1% per year.  (Both of those are current, unadjusted dollars.)

That means year after year, the state government eats up more and more of the Rhode Island economy and takes more of Rhode Islanders’ real income.  Over the period shown in the chart, the state government has grown to the point that it’s taking another two percentage points of income and GDP out of the economy each year.

Even worse:  This isn’t just a loss to the people right now.  It actually affects broader economic growth, and likely plays a significant role in Rhode Island’s economic growth rate coming in below the national GDP rate of 3.8% over these two decades.

This is why Rhode Islanders often feel like they are serving the government, not the other way around.  Few people would complain about the growth of government if the people of the state were becoming relatively wealthier, but that it’s the other way around.



  • Guest

    “Few people would complain about the growth of government if the people
    of the state were becoming relatively wealthier, but that it’s the other
    way around.” When you say “few”, do you really mean just yourself?

  • Mike678

    But we are the 9th best economy in the nation according to Business Insider using six factors, two of which are wage related! Gina’s hiring of high wage state employees and generous union wage increases have, and will continue to, Make Our State Great Again!

    USA Today and US News and World Report, using many more factors such as tax burden, have RI ranked far worse–but let’s ignore them! Trumpet the one report, ignore all the others! MOSGA!

    http://www.providencejournal.com/news/20180418/tentative-pact-gives-states-largest-union-75-percent-raises

    • guest

      Justin makes his living “Trumpet the one report, ignore all the others!” and you seem to be a big supporter.

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