July 11, 2017

#38 | Ranking the States by Fiscal Condition: Rhode Island

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.


On the basis of its fiscal solvency in five separate categories, Rhode Island is ranked 38th among the US states for its fiscal health, which is an improvement over the previous fiscal year. On a short-run basis, Rhode Island has between 78 percent and 187 percent of the cash needed to cover short-term liabilities, which is well below the average among the states. Revenues exceed expenses by 6 percent, and net position improved by $448 per capita in FY 2015. On a long-run basis, Rhode Island has a negative net asset ratio of 0.53, pointing to the use of debt financing and unfunded pension obligations. Long-term liabilities are 89 percent of total assets, or $5,377 per capita. Total primary government debt is $2.63 billion, or 5 percent of state personal income. Unfunded pension obligations, on a guaranteed-to-be-paid basis, are $17.67 billion, or 33 percent of state personal income. OPEB is 1 percent of state personal income. 

Share this

Key Terms

  • Cash solvency measures whether a state has enough cash to cover its short-term bills, which include accounts payable, vouchers, warrants, and short-term debt. (Rhode Island ranks 42nd.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Rhode Island ranks 8th.)
  • Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are enough assets available to cushion the state from potential shocks or long-term fiscal risks? (Rhode Island ranks 43rd.)
  • Service-level solvency measures how high taxes, revenues, and spending are when compared to state personal income. Do states have enough “fiscal slack”? If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base? (Rhode Island ranks 39th.)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities and OPEB liabilities compared to the state personal income? (Rhode Island ranks 28th.)

For a complete explanation of the methodology used to calculate Rhode Island's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings.

To read all our work on Rhode Island, go to mercatus.org/states/rhodeisland.