PROVIDENCE, R.I. (WPRI) – A new study from the Federal Reserve Bank of Boston says Rhode Island is an “outlier” among states because it has historically spent so little on capital projects such as road and bridge repairs.
The study by Ronald Fisher and Riley Sullivan of the Boston Fed’s New England Public Policy Center concludes: “Taking all of the evidence into account, the single outlier state is Rhode Island, which is shown to have had relatively low state and local government capital expenditure by every measure.”
The two authors examined Census data on state and local capital spending from 2000 to 2012, as well as analyses of infrastructure conditions. The projects under review included not only roads and bridges but also school buildings and other government facilities as well as environmental structures.
“Regarding roads and bridges, the infrastructure analysis … suggests that Rhode Island stands out among the New England states as having made subpar investments in transportation,” they wrote. They noted Rhode Island allocated less than 17% of its capital spending to highways, compared with a national average of 25%.
“The consistent evidence from these data is that road quality is substantially worse in Rhode Island than nationally, with a higher percentage of travel on rough roads and a lower percentage of travel on the smoothest roads,” they wrote.
Spending on public capital projects was “well below the national average” across New England, the study’s authors found, which they partly attributed to efforts to control state debt. They noted that state governments are more likely to fund such projects in New England compared with other regions, where jurisdictions such as counties play a more prominent role.
However, Rhode Island’s lack of infrastructure spending has not translated into a low level of debt, making the Ocean State “a special case,” according to the authors. They noted Rhode Island has used borrowed money for other purposes, such as subsidizing private businesses, student loans and low-income housing.
“Thus, it appears that the state and local governments in Rhode Island have used government borrowing authority to support private ventures to an unusually high degree relative to borrowing for traditional public purposes,” they wrote.
They also said their findings are “consistent with the evidence that overall state and local outstanding long-term debt is relatively high in Rhode Island, but outstanding long-term debt for traditional public purposes, including investment in public capital, is relatively low.”
State leaders in Rhode Island are unlikely to dispute the Fed study’s findings.
Gov. Gina Raimondo has repeatedly said the state has spent too little on roads and bridges over the years, and cited that history as a key motivation for her infrastructure plan, RhodeWorks, which the General Assembly authorized earlier this year and which includes new tolls on trucks.
It’s also far from the first study to criticize Rhode Island’s failure to prioritize infrastructure spending. The state ranked 50th out of 50 for infrastructure in last week’s CNBC rankings, and a think-tank study released earlier this year said the state consistently spent less on infrastructure than the vast majority of states.
“Capital spending builds schools, hospitals, and other infrastructure critical to economies and residents,” Robert Triest, director of the New England Public Policy Center, said in a news release about the study. “Given this region’s small states and its interconnected economies, the benefits extend beyond state boundaries.”