Rhode Island’s public sector last year had more than $21 billion in total debt and other financial liabilities, including pension and retiree health benefits, according to a report from the state’s Public Finance Management Board.
The Rhode Island Debt Affordability Study found the state, its quasi public agencies and municipalities are generally within acceptable debt levels — with some notable exceptions.
“At the state level, the debt of Rhode Island and its Quasi-Public agencies is generally affordable and within acceptable levels,” the report concluded. “The debt and pension liabilities of the State of Rhode Island are somewhat higher than national medians but have trended downward in recent decades, and are currently manageable.”
The debt facing Rhode Island’s 39 cities and towns, on the other hand, “vary greatly,” it said. “Even when pension, [Other Post Employment Benefits] and overlapping liabilities from local districts are included, some municipalities enjoy very low liability burdens. The liabilities in some other municipalities are very high.”
This is the second time the Management Board has taken a broad look at Rhode Island public sector debt and the first time the study has included pension and Other Post Employment Benefits (OPEB) in its calculations.
As it was in the earlier 2017 report, two municipalities — Providence and Woonsocket — exceeded the Board’s recommended 3% debt to assessed property value limit. Woonsocket’s debt was 7.3% of assessed value, down from 10% in the 2017 report. Providence’s debt was 3.7%, down from 4.4% in 2017.
Six exceeded the recommended 9.2% overall debt, pension and OPEB liability to assessed value limit: Woonsocket: 26.6%; Providence: 26.6%; Pawtucket: 25.6%; Johnston: 19.9%; West Warwick: 14.1% and Central Falls: 13.8%.
At the end of June 2018, Rhode Island state government debt payments made up 6% of general revenue, down from 6.1% two years earlier. (The Public Finance Management Board recommends a 7% limit.)
Tax supported debt as a share of resident personal income, however, rose to 3.96% last year, basically at the 4% recommended limit. It was from 3.4% in mid-2016.
” Read Also : Library of Congress Books Being Donated to Local Libraries ”
Using slightly different numbers from ratings agency Moody’s, the report said Rhode Island debt service accounted for the 18th highest share of state revenue in the country. Connecticut was first and Massachusetts second.
Only 11 states had a higher to debt to personal income ratio than Rhode Island. Hawaii’s was the highest, followed by Massachusetts and Connecticut.
“Rhode Island must continue its commitment to making critical investments in infrastructure projects that create good jobs that protect the health and wellness of our residents,” Rhode Island General Treasurer Seth Magaziner said in a release accompanying the report. “We must also ensure that we borrow within our means.”