PROVIDENCE, R.I. (WPRI) – Gov. Gina Raimondo’s RhodeWorks plan would generate $700 million more in revenue than the state needs to complete its transportation projects over the next 16 years, yet would still fall short when money is needed most, according to a new study.
The detailed analysis of Raimondo’s proposal, which involves a combination of truck tolls and borrowing, was conducted by the Rhode Island Public Expenditure Council (RIPEC) think tank and released Wednesday. While the organization did not take a formal position for or against the plan, it warned about a variety of potential problems with the current version.
Compared with three alternatives developed by RIPEC, each of which would involve more borrowing and less or no tolling, Raimondo’s plan is “by far the most expensive” for Rhode Island, the study said. RhodeWorks would cost locals at least $531 million in interest and tolling fees, compared with as little as $282 million if its proposed bridge repairs were funded entirely by borrowing.
RIPEC published its study just as RhodeWorks appears to be on the fast track to passage in the General Assembly. Raimondo and Democratic legislative leaders unveiled their revised version of the plan last week, following months of negotiations, and committee hearings on it are scheduled for Wednesday and Thursday. House Minority Leader Brian Newberry, an opponent of the plan, said Tuesday he thinks it could pass within the next two weeks.
The latest version of RhodeWorks calls for the R.I. Department of Transportation to undertake a “surge” in bridge repairs over the next few years, funded by tolling large commercial trucks and borrowing $300 million against future federal highway grants. RIDOT says the plan will save money in the long term by avoiding more costly repairs down the road, but critics argue the money should be found elsewhere.
RIPEC did not examine the wisdom or feasibility of RIDOT’s proposed timeline for bridge-repair projects, limiting its analysis to how much money RhodeWorks would generate over the next 16 years and how that aligns with the agency’s projected spending needs down the road.
RIDOT’s current projections show the agency expects to spend $5.5 billion on all its operations from 2016 to 2025 but is only forecast to receive $5.1 billion in revenue under current law, leaving a gap of about $392 million over that time period, the study noted.
While RhodeWorks would generate $448 million in additional dollars for RIDOT over that same period, more than closing the gap, the money isn’t forecast to come in exactly when it’s needed – RIDOT would wind up with $122 million less cash than it needs from 2020 to 2022 but a surplus of cash in other years.
After that, though, RhodeWorks’ truck tolls would turn into a major money spigot for the state: RIPEC projects the fees would generate $701.7 million in surplus revenue for RIDOT from 2023 through 2032, the last year of its analysis.
“This long-term surplus can then be reallocated, thus increasing the resources RIDOT has available in the later years to invest in other components of the Rhode Island transportation network,” RIPEC noted.
RIPEC urged lawmakers to more closely examine the trade-offs between tolling and borrowing, suggesting that a larger amount of debt and the reduction or elimination of tolls would mitigate the harmful impacts of RhodeWorks on Rhode Island’s economy.
A state-commissioned economic analysis “demonstrates that all of the economic benefits associated with the program … result from increased state spending on construction,” RIPEC noted. “The economic impact of the tolling program by itself, however, is negative.”
House Speaker Nicholas Mattiello said RIPEC’s analysis would be reviewed at a House Finance Committee hearing on Thursday. “The plan that we are moving forward with is the right one and the analysis by RIPEC confirms that it is very viable,” he said, adding that the Greater Providence Chamber of Commerce has also come out in support of the plan.