A bill by Sen. Sam Zurier offers one way to plug the $32.6 million hole in the Rhode Island Public Transit Authority’s upcoming budget: increasing the bus agency’s share of the gas tax.
The Providence Democrat’s bill — one of four proposals seeking to solve the cash-strapped bus network’s funding woes — would increase RIPTA’s share of the state’s tax on gasoline from 26% to 30%. It’s a funding strategy that’s garnered support from transit advocates and the agency’s leader.
“With a $32 million shortfall, that’s helpful,” RIPTA CEO Christopher Durand told the Senate Committee on Finance at a hearing on Tuesday.
But the chairman of RIPTA’s board of directors is opposed to the idea, arguing Zurier’s gas tax shift would take away from the state department he leads.
“It would result in an annual loss of approximately $7 million, significantly impacting our capital program,” Rhode Island Department of Transportation Director Peter Alviti Jr., who the state-mandated to steer RIPTA’s board in 2023, wrote to the committee.
Alviti did not attend Tuesday’s three-hour hearing.
Zurier argued Alviti’s stance goes against RIPTA’s board-supported goal of finding a sustainable funding source — which the gas tax has become less stable as more drivers shift to more fuel-efficient and electric vehicles.
RIPTA now gets about $40 million in annual gasoline tax revenues, based on its existing allocation of 9.75 cents per gallon. That revenue is projected to drop over $1 million when fiscal year 2026 starts July 1, according to projections from the Rhode Island Department of Revenue.
“This would only restore the share RIPTA had,” Zurier said. “It’s very common sense.”
Three other proposals were heard by the committee:
- A bill by Sen. Meghan Kallman, a Providence Democrat, would add a 75-cent fee to each fare collected by rideshare companies in order to fund mass transit.
- A bill by Sen. Robert Britto, an East Providence Democrat, would earmark the state’s existing tax on rideshare trips toward mass transit.
- A resolution by Sen. Mark McKenney, a Warwick Democrat, would allocate $32.6 million from the general fund to fill RIPTA’s latest budget gap.
All four bills were held for further study by the committee as is standard procedure for an initial vetting by a legislative panel.
Higher fares, layoffs, pushing ad sales
Realistically, Durand said RIPTA can only cut around $10 million from its deficit because most of the expenses in the agency’s $154 million spending plan are funded with federal money or tied into existing operations.
“There really isn’t a whole lot to trim,” Durand said.
The agency projects about 300 employees losing their jobs if lawmakers don’t provide any new funding.
There are ways RIPTA can try to generate revenue. A presentation Durand gave the committee floated a 5% fare increase, which the agency projects would bring in $470,871 annually. But such a change could decrease ridership by 100,000 trips, according to RIPTA’s presentation.
Durand had promised the agency’s board of directors last December that raising fares would not be on the table.
Another potential source could be by courting more businesses to buy ad spots on sheltered stops, which the agency projects would bring in $440,000 annually.
Committee Chairman Lou DiPalma, a Middletown Democrat, suggested RIPTA could take over non-emergency medical transportation for Medicaid enrollees, something the agency used to provide until the service was privatized some years ago.
About that efficiency study
State leaders are still waiting on RIPTA to submit an independent efficiency study of its operations, as mandated in the state’s fiscal 2025 budget.
The study was supposed to be done on March 1, but the agency’s board of directors delayed the bid process last year until it could find a permanent CEO. Durand, who was the interim CEO for seven months, took over the agency permanently last November.
RIPTA’s board finally awarded a contract to do the efficiency study on March 27 to Canadian engineering consulting firm WSP, which likely won’t have a final report complete until the summer — after the General Assembly likely wraps up this year’s legislative session.
Durand provided lawmakers with a two-page memo from WSP detailing how transit agencies nationwide are dealing with ridership and workforce challenges following the pandemic.
DiPalma called the lack of a final study at this point “extremely disappointing.”
“We need facts and data,” he said. “This is not going to satisfy what we need for the budget.”
But DiPalma did not blame Durand for RIPTA’s latest financial crisis, instead placing it on Gov. Dan McKee for leaving it unaddressed in his recommended budget and passing the buck to the General Assembly.
“That’s categorically what happened — we’re given the charge to figure it out, and we’re going to figure it out,” DiPalma said. “Rhode Islanders expect to have a public transit authority that serves their needs — in an efficient and effective manner.”
This story was originally published by the Rhode Island Current.
