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Gencarella: TOLLS - Trucks Today, Cars Tomorrow.

Thursday, November 26, 2015

 

We all know it. The public has not one ounce of trust left when it comes to government.  Just look at the flip flops.  At first the General Assembly placed a toll on the Sakonnet, then (fortunately) they removed it.  At first Speaker Mattiello supported the PawSox deal, then (fortunately) he didn’t.  At first the Speaker didn't see the need for more oversight hearings on 38 Studios, then he did (although he still doesn’t see the need for what is really needed - an independent investigation).  At first the Governor promised a thorough investigation of 38 Studios and now, not so much.

How Can We Be So Sure?

So when the Governor or the General Assembly tells you the toll will forever only be on trucks, do you really believe that?  Have gas taxes and auto fees only been used for road and bridge maintenance?  Is the 911 telephone surcharge only for 911 services?  Are lottery proceeds for education? Were taxpayers free from the obligation to pay 38 Studios?

We need to be realistic about the concept of spending tens of millions of dollars and dotting the RI roadways with the capability of creating mega ATM machines that can literally tax anything that moves in front of it. Of course cars will be tolled tomorrow!  Our government is dead set against prioritizing the spending of your tax dollars and living within its means so there simply must be another dependable source of revenue.  

As a matter of fact, the Governor is so intent on finding other ways in which to take your money she is proposing it in an Executive order.  Are you aware that Governor Raimondo issued Executive Order 15-06 (see Item #7) that includes authority for the Lt. Governor to ‘explore opportunities to enable municipalities to diversify their sources of revenue beyond property taxes and motor vehicle taxes”?  How’s that for new streams of revenue?  In RI, the hunt for the ultimate revenue spigot is unending.  But we digress.

Back To the Issue.

When the Governor first hatched the toll scheme, she thought it was a good plan bringing in over $100 million in toll revenue a year, costing $350 million in interest and paying off the associated debt in 15 years.  So how is it that she believes it is a good plan now that it is projected to bring in less toll revenue ($60 million) while costing us significantly more ($580 million in interest) and the debt won’t be paid until 30 years from the date its issued?

At What Point Does A Good Plan Cease Being A Good Plan?

Speaking of good plans, do you think it is a good plan to give more than $500 million worth of projects to the RI DOT - the same DOT that has been deemed ‘dysfunctional and unaccountable’?  We are talking about the same DOT that is requesting a mid year infusion, adding $25 million to their current annual operating budget of $463 million. There must be some formula that determines when a good plan is no longer a good plan.

And, as if we needed one, here’s another reason to be suspect of the plan. The Governor refuses to release the location of these tolling gantries.  Where will they be? Exactly how many will there be?  Would you be upset if they put one in your area, on a road you traveled daily?  Of course you would, because you know that ultimately it won’t be just trucks that will be tolled. And you should know that John Simmons from RI Public Expenditure Council (RIPEC) testified that the toll legislation allows the DOT to toll 140 bridges on RI’s roadways!  Any concerns there?

More Costs or Less Costs? More Work or Less Work?

The Republican Policy group has found so many holes in the plan that it should be cause for great concern to the general public.  The most egregious problem with the Governor’s plan is that it spends $410 million more than the Republican plan and puts $255 million less into road and bridge repair.  The bulk of this combined difference of over $600 million is the interest that Raimondo wants to fork over to Wall Street, and, of course, the cost of erecting and maintaining the gantries.  When the plans are juxtaposed, which one do you think is the better plan?

And following that line of thought, why would elected leaders conjure up a plan that confiscates more than half a billion dollars from the taxpayer and sends them out of state?  More than ever, RI needs to stimulate its own economy, not someone else’s economy.

Will This Be RI’s Big Dig?

Consider our neighboring state of Massachusetts where their ‘Big Dig’ project purportedly cost more than the Hubble Space Telescope  (and that’s adjusted for inflation). Given the history of the RI DOT, 10 years from now, what mega-cost project will they be comparing to the costs of the ‘RhodeWorks’ project?   The RI Center for Freedom and Prosperity has its own proposal for what is likely to be RI’s largest infrastructure project to date.  Their suggestion - outsource the DOT in a fashion similar to what Pennsylvania has done in a private/public partnership.  They also suggest a pay-as-you-go approach and refer to their Spotlight On Spending to identify sources of funding.  Perhaps a combination of the Republican Policy Group plan and the Center’s plan is in order.  

All of these plans warrant serious discussion, debate and consideration by all of our elected leaders.  Anything is better than what the Governor, and now apparently, the Speaker, are proposing - to create an open line into the vein of the taxpayer.

Pam Gencarella is a member of OSTPA, a taxpayer advocacy organization in Rhode Island.

 

Related Slideshow: 10 Biggest Questions Facing Truck Tolls in RI

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1.

Why won't the Governor define the proposal?


The Administration has put forth a number specifics that have changed since the original proposal, including the original “17-22” tolling locations changed to simply 17, and the reduction of toll amount from “$40-$50” to $30.  However, the Administration just got the green light last month by the Feds to move forward with the loosely-defined plan, which included inquiring as to whether the undersides of bridges could be tolled — which the Feds said now. 

Where will the tolls be located?  

Where had they been considering bridge undersides, and why? 

The loosely-defined plan has opened up the Administration to criticism that is moving to fast. 
 

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2.

When will RI get the details?

The Senate approved an updated version of the truck toll plan last General Assembly session.  With no fall General Assembly session scheduled after much speculation, the lawmakers will ostensibly resume taking up the issue upon return in January or soon thereafter. 

Will a more detail proposal be made public prior to the new session, or will the nuts and bolds — and gantries — be kept under lock and key until they’re unveiled at a Finance Committee hearing?
 

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3.

Does 80% of the $500 Million really only go to cover 6/10 Interchange?


The administration is proposing a $500 million revenue bond - and anticipating refinancing of federal debt as well as an influx of new federal funds - to provide the basis to cover costs for the project dubbed “RhodeWorks."

However, of that $500 million bond, $400 million of it would go to just one project - the much needed repairs on the crumbling 6-10 connector, which represents less than 1% of all state roads. 

Granted, not all of Rhode Island’s roads are in as dire condition at the 6/10 connector, but how much will the state have to spend — or bond — if $400 million goes to one project alone?
 

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4.

Is RI stuck in a cycle for bonding?


With Rhode Island still smarting (will it ever not) from 38 Studios, the issue of a non-voter approved bond has taken on the appearance of a four-letter word. 

The Republican Policy Group has put forth a no-toll — and no-bonding plan, but the administration continues to make that case that despite the costs associated with bond debt, it will cost less for RI to pay for the projects now. 

In case you missed it, former Attorney General Arlene Violet wrote a scathing review of the state’s bonding industrial complex this week in the Valley Breeze, which is worth the read.  

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5.

Will the General Assembly consider alternative proposals?


The Republicans have their no-toll, no-bond, pay-go proposal.  The Center for Freedom and Prosperity put forth a “P3” proposal for a public-private partnership.  The Trucking Association put forth their own no-toll plan, with increased fees and taxes instead to pay for the infrastructure costs. 

And State Rep. Doreen Costa has put forth a call to put any bond question before voters.  How much, if any, of these other approaches will see the light of day at the General Assembly?  The chances might be slim, but the opposition is vocal — and mobilized.  Don’t expect bond opponents to go anywhere anytime soon.  

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6.

Can RI be assured it won't extend to autos?


The current proposal, as it sands, is to toll only trucks of a certain size — Class 8 to Class 13.  However, that doesn’t have Rhode Islands worried that in the event of revenue shortfalls, that the classifications could be expanded. 

Even if the Governor and General Assembly assured Rhode Islands that would never happen, there might be some discussion - and debate - around ensuring that’s the case.  Raimondo worked to increase the cigarette tax (already the third highest in the country) this past session.  The state’s revenue from gambling will continued to take a hit as competition from Massachusetts ramps up.  Could — or should — a stipulation be put in any legislation that if the toll plan is to be expanded, it would need to go before voters?
 

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7.

Do recent projection shortfalls (Medicaid and rental tax)) call into questions revenue projections?


Raimondo had anticipated saving just over $70 million in Medicaid reform in this year’s budget, but the state’s Office of Health and Human Services said the number they were looking was almost two million short of that mark, and the the state’s revenue and caseload estimating conference pegged gap as even higher, as first reported by the Providence Journal. 

Most recently, WPRI noted that the rental home tax the Governor had touted fell $1 million short of expectations in the first month alone.  The administration is depending on a revenue stream of $60 million year, which leads us to our next question. 

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8.

What happens if the state doesn't meet the revenue?

 
The projections put forth from the administration show that the state expects to collect $60 million a year from the tolls to pay for a thirty revenue bond.  This was after the administration shifted gears from a 15 year, $700 million bond that was depended on $100 million in revenue a year.  

The Republican Policy Group recently held a press conference on “missing inconvenient information,” at which is asserted that “half of the proposed tolls or $30 million comes from pass-through truckers, while the remaining half is paid by three sources: local trucks delivering out-of-state, instate/out-of-state trucks delivering in Rhode Island. 

However, the impact study projects only $12.79 million in additional cost from inbound traffic and $5 million from all local and outbound traffic. The figures don't add up. Approximately, $12 million in annual toll revenue is unaccounted for.”

Does it create a 38 Studios issue?

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9.

What happens if trucks go around?

 
RI Trucking Association spokesperson Bill Fischer has questioned repeatedly what would happen if the trucks simply bypass the state.  

“We’d be on the hook for these bonds,” said Fischer. "We're saying charge us more in fees, focus on the diesel tax. We're worried about what no one has talked about, and that's evasion.  It's a big deal because you don't need to go through Rhode Island to drive from New York to Boston. We still have to make the bond payments.  These guys have computer programs that incorporate the fees and tolls.

The burden is being placed on the local guys." The Republican Policy Group has questioned whether diversion had been thoroughly vetted, as well. “Did the report account for diversion through Connecticut to avoid tolls as it relates to IFTA fees? Currently, truckers remit IFTA (International Fuel Tax Agreement) taxes to each state based on miles traveled. When they divert to avoid tolls, our state will lose these taxes.  What is the corresponding loss in revenue? 
 

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10.

What if RI doesn't get matching funds?


As part of the overall project cost of just over $1 billion, $500 million would come from the revenue bond, $120 million would be achieved through existing bond refinancing, and $400 million is slated to come from the federal government for the 6-10 transit project.

Will that go by the wayside if the Feds don’t come through?  What will that mean for future projects?
 

 
 

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