Don Roach: Rate Hikes Won’t Solve RIPTAs Fiscal Woes

Wednesday, December 16, 2015

Don Roach, GoLocalProv MINDSETTER™

 

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In another sign that Rhode Island lawmakers simply have no clue about what will work for our state, Governor Raimondo had to remind them that raising RIPTA fares for seniors and people with disabilities is probably not the best way to fix the fiscal problems with RIPTA.

For perspective, RIPTA lost 21.9M in FY 2014, 20.8M in FY 2013, 21.1M FY 2012, and 15.4M in FY 2011 not taking into consideration capital contributions. I would have gone back further but the numbers just seemed too depressing. It’s no secret that RIPTA is in need of fiscal help and that things aren’t improving. But, it doesn’t appear that rate hikes have helped to do anything but inadequately stem the financial loss tide. 

Looking at operating expenses in 2006, the total was 90.4M but by 2014 operating expenses had grown to 119.8M or about 30 million. That represents about 33% increase in less than 10 years! On the flip side, total revenue was 82.3M in 2006 and 97.8M by 2014. That’s only an increase of about 16M or 19%. If your expenses increased by a third and your revenues didn’t, that sounds like disaster. 

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But are rate hikes the answer? They do not appear to be. Still using 2006 as our baseline, passenger fares accounted for 7.8M in revenue. By 2014, this number had ballooned to 14M. Thus revenue from passengers nearly doubled and the overall net loss before capital contributions grew worse. Seems to me, rate hikes aren’t helping RIPTA address its continual net loss position each year. 

Thus, I’m going to agree with Raimondo that additional rate hikes are not the answer. Sometimes we get overzealous with addressing problems and don’t actually find solutions. A hallmark of Democratic thought is tax and spend which, in my opinion, rarely works. As the thought goes if we tax more we will receive more revenue to spend on more government programs. RIPTA has raised hikes several times in the past what makes them think this time will be different?

And what’s worse is that they are raising fares for people who have the least amount of money but who need their services the most. This falls under the category of things that don’t make sense, like walking through Roger Williams Park and seeing deer who expect you to move out of their way as you walk past them. 

It leaves you scratching your head and so do the propose fare hikes for the elderly and disabled. Now, I hear some of you saying, “Don everyone needs to pay their fair share. We can’t subsidize everything.”

I agree on both counts. My problem isn’t with the rate hikes themselves, my problem is with RIPTA thinking that additional rate hikes will substantially change their net position. If it hasn’t worked in numerous years, it’s not going to work now.

Instead, I’d like to see RIPTA take a more holistic approach to decreasing their operating shortfalls. When the elderly and disabled are targeted groups to increase revenue, you know there’s a problem. 

The question is, will anyone at RIPTA ever find the solution?

Don Roach is a Young Republican. Please visit Don’s Facebook page. 

 

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