Ward 2 News

This past Thursday, I attended a portion of an Anti-Hate Summit convened by a coalition of Rhode Island community and civil rights organizations. I drew inspiration from the keynote address of Eric Ward, who urged us to aim higher than mutual tolerance for what he called “mature democracy.” His vision went beyond the basic definition of democracy as government by popular vote to a more inclusive notion of a truly democratic society, continuing a project first begun by Alexis de Tocqueville almost 200 years ago, and which our country has, in our better moments, endeavored to advance and extend ever since. In this week’s letter, I will discuss some initial thoughts about the State budget approved by the House Finance Committee.

A.   The Budget Process

As noted in my May 10 letter, the General Assembly begins its review of the Governor’s budget in the House Finance Committee, which approved an amended budget late Friday night. After one week (or possibly longer), the full House of Representatives will review the House Finance Committee (HFC) budget, possibly amending it. The Senate will review the House budget, also with the opportunity to amend. The final legislative budget then goes to the Governor, either to (1) sign, (2) veto or (3) allow it to take effect without his signature. Traditionally, the full House of Representatives makes modest amendments to the Finance Committee budget, and the Senate rarely amends what it receives from the House of Representatives.

B.    The House Finance Committee (HFC) Budget

The HFC Budget, which you can view on my Budget Documents Page, is a complex document. The Senate Fiscal Staff will help us to study and understand it over the next two weeks, when it comes before the Senate Finance Committee and then the full Senate. From my initial review, I see three ways in which I believe the HFC Budget improves upon the Governor’s budget.

1.     RIDOT and RIPTA Funding

As noted in my May 10 letter, the Governor’s budget included a $.02 reduction in the motor fuel tax to promote “affordability,” which in fact would save the average Rhode Island motorist less than $1 per month. The HFC Budget retains the current motor fuel tax level, bringing in an additional $8.6 million for the Rhode Island Department of Transportation (RIDOT) budget. The HFC then directs $5 million from another permanent RIDOT revenue source called the “highway maintenance account” to RIPTA, enabling RIPTA to restore some of the routes it had to cut to close last year’s budget deficit. This approach represents an improvement over previous years, as it provides RIPTA with a new reliable and sustainable revenue source going forward, rather than having to rely on one-time appropriations each year from different sources.

2.     RIDOT Performance Audit

As noted in my letters of December 14, January 11 and March 8, the Oversight Committee review of the Washington Bridge closure raised serious concerns about the efficiency of RIDOT’s operations. The “Road Woes” Report from WPRI-TV 12 raised the profile of these concerns further, noting RIDOT’s poor performance compared to other states. The HFC Budget includes the Rhode Island Department of Transportation Efficiency and Performance Audit Act, which calls for the commission of an audit of RIDOT’s road maintenance program, whose deficiencies contributed to the deterioration of the Washington Bridge.

3.     The Act on Climate

As noted in my February 1 letter, the Governor’s budget proposed reducing utility bills by postponing the State’s adoption of 100% renewable energy (known as the “renewable energy standard” or “RES”) from 2033 to 2050. As that letter notes, the RES represents the central pillar of the emissions reduction mandates of the Act on Climate, and the Governor’s budget would severely compromise the chances of the Act’s successful implementation. The HFC Budget provides some rate relief by incorporating access to other zero emission energy sources (such as hydropower and nuclear), but restoring the 2033 requirement of 100% zero emissions energy, thereby preserving the Act on Climate’s basic emissions reduction framework.

Dear Neighbors:

I hope are enjoying the Memorial Day holiday, as we honor the soldiers who fought to end slavery and defend our country against a rebellion. In this week’s letter I will discuss a component of Rhode Island’s energy policy called “net metering,” and the policy’s impact on ratepayers and greenhouse gas emissions.

1.     Current Net Metering Policy

Rhode Island developed a “net metering” policy in 2011 that supports the construction of electricity generating facilities (including solar farms) that export power into the grid currently maintained by Rhode Island Energy. The policy allows these wholesale producers to accrue “credits” for the additional electricity they provide to other users. The value of the credit is determined by the retail price of electricity as measured by cents per kilowatt hour multiplied by the number of kilowatt hours generated and introduced into the system.  Rhode Island Energy pays the credits to the generator, and those costs are incorporated into Rhode Island Energy’s overall rates.

2.     The Governor’s Proposed Changes To The Net Metering Program

a. The Governor’s January Budget

The Governor’s budget includes an “energy affordability” program described in this Presentation  that predicted a $1 billion savings in utility rates over the next five years. Part of those savings would come from reducing payments to net metering generators by freezing the price per kilowatt hour they would receive at the July 1, 2026 level, rather than allowing the price to increase as retail rates increase.

b. Budget Amendment 7 (GBA 7)

When the solar electricity generation industry criticized this program for undermining existing agreements and understandings, the Governor decided to review this part of the budget. Two weeks ago, the Governor introduced General Budget Amendment 7 (GBA7) which would allow net metering generators to opt into a rate tariff which would guarantee an annual 2.75% rate increase, representing a compromise between the current program (under which rates have increased at a 4.9% annual pace) and the rate freeze proposed in the Governor’s original budget.

3.     Estimating Proposed Ratepayer Savings

As part of the Governor’s initial budget Presentation (at Slide 25) the Office of Energy Resources (OER) predicted that a net metering rate freeze would generate $175 million in annual rate payer savings over five years.  As documented by the Senate Fiscal Office, OER projected GBA7 to increase the cumulative 5-year rate payer savings to $257 million. This result is counter-intuitive, because GBA7 increases the amount paid to generators (by including the annual 2.75% escalator), but somehow also increases ratepayer savings by $82 million at the same time.

4.     The Senate Finance Committee’s Review

a. The Office of Energy Resources (OER) Rate Payer Savings Model

The Senate Finance Committee reviewed GBA7 with the Office of Energy Resources (OER) on May 12. OER’s consultant described the model he used to project the consumer savings that would accrue from changes in the net metering program. A key component of that model was a prediction that retail electricity rates over the next five years would increase by 37%. Under current policy, net metering generators would see increased payments based on these rate increases; therefore freezing the rate or limiting it to a 2.75% annual increase would provide savings to rate payers. In contrast, historical rates had increased by only 5% annually over the past 3 years, which would lead to lower anticipated ratepayer savings.

b. The Finance Committee’s Inability To Review OER’s Model

OER’s consultant declined to share the data on which its prediction was based, stating it was subject to a nondisclosure agreement. Given that state funds were used to pay for this model, the Senate Finance Committee was frustrated with this answer. In the meantime, a major solar generator provided its projection that, based on a 4.9% annual rate increase, ratepayer savings would be limited $72 million over 5 years, rather than $175 million in the Governor’s original budget or $257 million in GBA7. OER offered to engage in further correspondence about the model offline, which is now taking place.

5.     Conclusions

The May 12 hearing raises questions about the actual savings Rhode Islanders will realize from the Governor’s net metering initiative. We have not had the opportunity to examine in detail the other components of the OER’s $1 billion savings model, but the experience with net metering suggests those other components should not be accepted at face value. Also, as noted in my April 19 letter, the OER model has no analysis of the impact of this program on greenhouse gas emissions, which are regulated by the Act on Climate.

In this way, the Finance Committee hearing on net metering underscores the need for us to have an independent, transparent model of energy policy that will allow us to assess its impacts on rates in one direction, and greenhouse gas emissions on the other.

Dear Neighbors:

I hope you are enjoying our best Spring weekend yet. In this week’s letter, I discuss legislation concerning Providence Public Schools that the Senate Education Committee will hear this week.

1.     The Takeover and the Return to Local Control

The State assumed control of the Providence Public Schools in 2019 for a five-year term, extending it in 2024 for an additional term of up to three years. As noted in my May 25, 2025 letter, the City proposed legislation last year to end the State takeover as of last July 1. The Commissioner opposed this legislation, asserting that local authorities were not ready to assume that responsibility. The City submitted legislation this year to mandate a return to local control as of this July 1. On April 8, the Senate Education Committee heard the City’s proposed legislation. At that time, witnesses testified that local and State authorities were negotiating phased timetable for a return to local control over the next school year.

2.     The Purpose of the State Takeover

These debates and negotiations are significant; however, I believe they miss the most important issue; namely, what is best for the children who attend the schools? More specifically, as documented in 2019 Johns Hopkins report and the 1993 PROBE Report that preceded it, even with the best efforts of many educators, the Providence Public Schools contain structures that stand in the way of providing a quality public education to every child. The goal of the takeover was to implement reforms to ensure better outcomes when local control returned. A simple return to local control today because the local authorities believe they are ready might not be sufficient by itself to improve outcomes for Providence students.

3.     The Senate Study Commission

The Senate established a commission in 2023 to study and make recommendations concerning some of the salient issues identified in the PROBE and Hopkins reports, namely the working relationship among teaching professionals and division of responsibility among the central office, the school leadership and the classroom teachers. The Commission’s Report, as summarized in this Slide Deck, found that Providence Public School education professionals would be best served by developing a culture of shared accountability, moving beyond the adversarial relationship common in industrial labor-management settings. The Report concluded that such a transition could lead to better student outcomes while also providing greater professional fulfillment for educators. The Report recommended a wide range of reforms, including the removal of legislative barriers currently existing in Rhode Island laws. The Report’s legislative reforms are featured in Senate Bill No. 2934, which the Education Committee will hear this week.

4.     Bill S-2934

Bill S-2934 contains three sections as follows:

·        Section One would permit the Providence Public Schools to develop a “career ladder” for its teachers, allowing them to be rewarded for professional excellence and the willingness to take on additional responsibilities. This Section revises the current law’s requirement that compensation be tied strictly to years of service without regard to the needs of students or a teacher’s unique professional skills.

·        Section Two contains two reforms.

o  The first removes the current mandate that all reductions in staffing resulting from declining enrollment be carried out exclusively on the basis of seniority. If enacted, this would allow the Providence Public Schools to consider other criteria that would better align the faculty’s professional skills with the specific needs of the school’s student population. Rhode Island’s current “seniority only” law is a national outlier. The proposed reforms are based on the law of Massachusetts.

o  The second establishes a program of expedited due process for the review of teachers whose performance does not meet professional standards. Current law requires multiple layers of review that can require years to bring about resolution. Based on the law of Massachusetts, Section One would establish an arbitration process enabling these decisions to be made fairly and promptly.

·        Section Three contains a set of expectations associated with a July 1 return of the Providence Public Schools to local control. They include: (i) that the School Board will devote its primary focus to student outcomes, (2) the School Department will adopt policies and procedures to promote labor-management collaboration and site-based management and (3) the City will provide generous local education funding above and beyond the bare minimum “maintenance of effort” required under State law.

If enacted, the reforms contained in S-2934 offer tangible ways ensure that the Providence Public Schools can support better education outcomes for students and greater fulfillment for educational professionals than had been the case prior to the 2019 State takeover.

5.     Senate Consideration

The Senate Education Committee will hear Bill S-2934 this Wednesday afternoon (May 20) at 4:00 p.m. in State House Room 313. You can attend to testify in person, or you can submit written testimony by emailing it to SLegislation@rilegislature.gov.

Dear Neighbors:

I hope you are enjoying a happy Mother’s Day. In today’s letter, I will describe my budget priorities I submitted to the Finance Committee Chair.

The Senate and House have begun negotiations over the budget. To prepare for those negotiations, the Senate Finance Chair invites members to share a short list of priorities for leadership to consider as part of those negotiations. My list was as follows:

1. The Limitations of This Year’s Budget

As mentioned in, among other places, my January 18 letter, this year’s budget will be affected by a substantial pullback in federally funded human services that we will try, within our capacity, to replace with State-funded programs. This limits the amount of State “general revenue” funds to pay for new programs.

2. The Motor Fuel Tax

The Governor’s budget for RIDOT incorporated a two cent reduction in the motor fuel tax (which had generated $8.6 million annually) because the State had recently retired a highway bond to which those proceeds had been dedicated. As the Finance Chair noted at the time, this tax reduction would provide the average motorist with annual savings of less than $8; therefore, it did not seem meaningful. His observation has only been amplified by the changes in gasoline prices resulting from the Iran war. I therefore proposed that the motor fuel tax remain at its current level, and the $8.6 million annual revenue be redirected in two ways:

a. RIPTA Funding

The Governor’s RIPTA budget does not include funding to restore the routes that were cut in last year’s budget. An additional allocation of RIPTA of roughly $5-8 million could restore those routes.

b. RIDOT Efficiency Study

As noted in my March 29 letter, a recent WPRI-12 Report noted that Rhode Island’s state roads rank among the nation’s worst in quality and most expensive. I introduced Bill S-2124 to commission an independent efficiency study of RIDOT’s road and bridges program. I requested a one-time expenditure of up to $500,000 in motor fuel tax proceeds to pay for that study. I believe this study can produce future savings that will more than pay for itself.

3. Using the Oil Spill and Response Fee to Fund the Executive Climate Change Cordinating Council 

Senator DiMario introduced Senate Bill No. 2547 to increase the Oil Spill and Response Fee to provide funding for the Executive Climate Change Coordinating Council (EC4), which coordinates the implementation of the Act on Climate. As I noted in my April 19 letter, the State currently lacks the capacity to evaluate how changes in policy (such as the Governor’s Energy Affordability Agenda) affects the emissions regulated by the Act on Climate or consumer costs. I propose allocating funding (estimated at $300,000-$500,000) to support the maintenance of a model that can project how policy changes affect consumer energy costs in one direction, and greenhouse gas emissions in the other. That way, we will be able to predict the impacts of proposed policy changes rather than our current course of “flying blind.”

4. Next Steps

The Finance Chair will compile the input from me and my 37 colleagues, and share that information with Senate leadership. Senate leadership will negotiate the budget with the House of Representatives leadership and the Governor. At some point towards the end of this month, leadership will inform membership of the tentative agreements reached on the budget.

As we learned Friday night, a portion of a Route 10 bridge fell onto train tracks underneath, blocking Amtrak and MBTA service. While this disrupted travel for hundreds of passengers, we are grateful that the failure did not occur while a train was passing through or was too close to stop. As noted in the above WPRI report, inspectors rated the bridge’s condition as “poor” the previous year. While it is not clear whether or how this “near miss” could have been avoided, this week’s letter will discuss a related issue, namely our need to improve enforcement of the State’s laws to increase transparency of political contributions made by RIDOT’s and other State vendors.

1.         The Vendor Affidavit Law’s Provisions

The State’s vendor affidavit law requires companies receiving a State contract of $5,000 or more to submit, within 60 days of signing the contract, an affidavit to the Board of Elections with a copy of the contract and a list of political contributions during the previous 24 months of $250 or greater made by owners and key employees to State candidates. As noted in my February 11, 2024 letter, only five vendors filed this affidavit in 2023, most of which were law firms. At a February 6, 2024 Finance Committee hearing, I asked the Department of Administration (DOA) Director what his office could do to increase compliance. He offered to begin sharing contract information with the Board of Elections, which administers the program.

2.         AECOM and Aetna Bridge’s Contracts, Campaign Contributions and Noncompliance

At a February 13, 2025 Joint Oversight Committee hearing, I asked the RIDOT director about campaign contributions made by two major contractors, AECOM (which has entered into seven multimillion dollar contracts since 2014 and which the State is currently suing), and Aetna Bridge (which has entered into 27 multimillion dollar contracts since 2012, including the bridge demolition contract). Over the years, AECOM’s key employees have made a total of $37,000 of campaign contributions of $250 or higher, while Aetna Bridge’s key employees have made more than $20,000. To my knowledge, neither of these firms has ever filed any required vendor affidavits, even though this requirement is plainly stated in RIDOT contracts they signed, such as this 2018 contract with AECOM (at page 5 of 6) and this 2024 contract with Aetna Bridge (page 4 of 6) as well as State law. The RIDOT Director denied any knowledge or responsibility for this issue or these contractors’ contract violations, but offered discuss the issue with the DOA Director.

3.         Further Dialogue With DOA

a.     2025

When DOA appeared before the Finance Committee on March 6, 2025, I asked the Director if he had spoken RIDOT’s Director about this issue. The DOA Director said not yet. DOA did, however, document a new policy of sharing with the Board of Elections information about recently executed contracts, which could allow the Board to monitor compliance with the vendor affidavit requirement.

b.     2026

DOA returned to the Finance Committee on March 16 of this year. Compliance with the vendor affidavit requirement has increased incrementally, but again nowhere near what one would expect. The interim DOA Director (who was only at work for a couple of weeks at the time) offered to look into the matter further. DOA informed the Committee that it was providing quarterly reports of new contracts to the Board of Elections, but was not taking any action regarding possible prior violations, such as the examples of AECOM and Aetna Bridge I had brought to RIDOT’s attention. Also, it is not clear what actions (if any) the Board of Elections has taken with the information DOA provided them about new contracts.

4.         Next Steps

Despite these four discussions with DOA and RIDOT over the past two-plus years, we have seen little, if any, improvement in vendor compliance and no enforcement of documented past violations. I would the Board of Elections to assign a higher priority to enforcing this law. We also may need additional legislation. The current penalties for violations (up to $1,000) are modest when compared to the millions of dollars of contracts companies seek to obtain. The City of Providence Code of Ordinances offers, at Article XXVII, an example of a more rigorous program under which vendors (and their key employees) are prohibited from making large campaign contributions for the year preceding a contract award, with a duty to report contributions after the award. Violations under the Providence ordinance can be enforced through a mandated ineligibility for future contracts. I would like to continue working on this project (among others) next year if given the opportunity.

We are now in the season of May Breakfasts, and I hope many of you enjoy the occasion. In this week’s letter, I will discuss two ways in which the Governor’s budget proposes changes to the State income tax.

A.   The “Millionaire Tax”

1.The Governor’s Proposal

The State’s personal income tax currently consists of three brackets with marginal tax rates beginning at 3.75%, rising to 5.99% of income exceeding $181,650. The Governor’s budget proposes adding a fourth bracket of 8.99% for income in excess of $1 million. In its Presentation, the Governor’s office noted that the new top rate would be comparable to those in Massachusetts, Maine and Vermont. The change is projected to generate additional revenue of $67 million in its first (partial) year, and $135 million in future years.

2.Policy Justification

The Governor justified the proposal on grounds of sustainability and equity. The federal tax law enacted last year (HR-1), reduced federal funding for a broad range of federal aid programs that help Rhode Islanders in need, leaving it to the State to replace as much as $400 million of federal funds with general revenues. The “millionaire tax” fills a portion of this gap equitably, obtaining funds from Rhode Islanders most able to pay, and who received the largest benefit from the tax cuts in HR-1.

3.Proposed Expansion To A “1% Tax”

A coalition of advocates supported Senate Bill No. 2238, which would reduce the income threshold for the 8.99% bracket from $1 million to $640,000. This “1% tax” would raise an additional $34 million above the “millionaire tax” in its first (partial) year, and $68 million annually thereafter.

4.Long-term Sustainability

In my view, sustainability also requires us to balance the State’s long term revenue and expenditure trends. In a Report it issued last year, the Office of Management and Budget issued a five year projection of annual revenue increases of 2.5%, which would be exceeded by annual expenditure increases of 3.7%. Before going beyond the Millionaire Tax, I believe we must look at expenditure savings as well as new revenue sources, and a good place to start is to look for long term savings in the $1 billion per year Department of Transportation budget. In Senate Bill No. 2124, the Rhode Island Department of Transportation Efficiency and Performance Audit Act, I propose an efficiency study of RIDOT. When Providence faced its “Category Five Fiscal Hurricane,” Mayor Taveras combined tax increases (including a temporary surcharge on high value homes) with expenditure reductions to close a nine-figure budget gap. I believe Rhode Island’s state budget would benefit from a similar approach.

B.    The Social Security Income Tax Exemption

Current State policy exempts Social Security benefits from income taxation for taxpayers whose income is less than $107,000 (single return) and $133,750 (married filing jointly). The Governor’s budget would, over two years, expand that exemption to apply to all Social Security recipients, regardless of income. Once fully implemented, this proposal would reduce annual State revenue by $61 million.  In contrast, federal income tax applies to up to 85% of Social Security benefits received for taxpayers with incomes exceeding $34,000 (single) or $44,000 (married filing jointly. The Governor’s proposal would reduce taxes for elderly Rhode Islanders with incomes exceeding $107,000 (single) and $133,000 (married filing jointly) at an eventual cost of $61 million in annual revenue.

This initiative would therefore be a step backwards in both policy goals of sustainability and equity, part of a broader trend of tax policy that favors the elderly, as noted in this Tax Policy Center report.

C.   Conclusion

The Governor’s two tax proposals are both popular from a messaging perspective (“Millionaire’s Tax” and “Ending Taxation of Social Security”) but they are largely at cross purposes from a policy perspective.

Dear Neighbors:

While yesterday’s weather was cool, I found warm spirits at the No Kings Rally march from our State House through downtown Providence. Mindful of the complementary strategies of organizing and mobilizing, I hope yesterday’s successful national mobilization will support greater organization, especially in red or purple states, to awaken a slumbering United States Congress. In the meantime, my letter will discuss an upcoming Senate Finance Committee hearing that will review the budgets of the Rhode Island Department of Transportation (RIDOT) and the Rhode Island Public Transit Authority (RIPTA).

A. Reviewing the RIDOT and RIPTA Budgets

This coming Thursday, the Senate Finance Committee’s Agenda will include a review of the budgets for RIDOT and RIPTA (which is legally an independent quasi-public organization), as well as a number of bills related to both agencies. I commend the Finance Committee Chair for combining these issues for a single hearing, as both RIDOT and RIPTA are part of our State’s transportation network, and they rely on largely overlapping funding sources. I expect important testimony from the Save RIPTA Coalition, which tried valiantly last year to persuade the General Assembly to avoid the budget reductions that have resulted in harmful service reductions.

B. Bills To Close RIPTA’s Funding Gap

In addition to reviewing the agency budgets, the Committee will hear several bills containing funding proposals to close RIPTA’s budget gap. You can review the bills by clicking on the Finance Committee’s Agenda and then clicking on any of the bill numbers that are scheduled for hearing and/or consideration.

1.Using General Revenues

One proposal, as noted in a recent Boston Globe op-ed written by Representative Alzate and Senator McKenney, which would commit $5 million of additional general revenue to RIPTA.

2.Redirecting RIDOT Funds

While I support their bill, I believe it would be even better to close RIPTA’s budget deficit by reallocating to RIPTA some of the revenue streams (such as the motor fuel tax and license/registration fees that are collected in the “highway maintenance account”) that currently are directed to RIDOT. I base my opinion on two basic considerations.

a. Inefficiencies in RIDOT’s Budget

The first is that RIDOT is not using its budgeted funds efficiently. As noted in my March 8 letter and in WPRI’s Road Woes report, RIDOT’s road program leads the country in the dubious category of combining poor quality with high cost. (For that reason, I filed bill S-2124 to commission an efficiency study of RIDOT’s road and bridges program, which is pending before the Housing and Municipal Government Committee.) And, as noted in my March 22 letter, RIDOT’s budgeting practices, such as its tardy execution of the return of the truck toll program, also leave much to be desired. As a result, I believe there is plenty of room in RIDOT’s $1 billion annual budget to find $10 million (1%) to close RIPTA’s funding gap. For that matter, if the General Assembly agrees to commission an efficiency audit of RIDOT, there is every possibility that the audit will find savings in its budget of 1% or greater, in effect “paying for” the restoration of RIPTA services without the loss of RIDOT’s capacity.

b. Limited Availability of General Funds

My second consideration is the extraordinary stress our State’s general fund budget will face this year. As noted in my January 18 letter, the federal budget passed as HR-1 in 2025 drastically reduces federal aid in such “safety net” programs as food stamps and Medicaid. The State budget lacks the capacity to restore these vital programs completely; instead, the General Assembly will need to make difficult choices from among a new set of competing priorities.

C. How You Can Share Your Views

I encourage you to share your views on these budgets with the Senate Finance Committee. You can submit written comments at this address: SenateFinance@rilegislature.gov . Please include your name, address and subject (such as the name of the budget or budgets you wish to comment on, and/or the bill number(s) that are important to you).

Thank you for your interest and engagement.

Dear Neighbors:

While meteorological Spring arrived last week, for many of us the hope of Springtime will begin on Thursday when the Red Sox open their season in Cincinnati. My letter this week marks a different passage of time, namely the delays in reviving the State’s truck tolling program, and how it reflects on budgeting practices.

A.   The conclusion of the lawsuit

By 2022, the State’s Rhode Works program generated around $40 million in annual revenue from truck tolls. At that time, a court suspended the program in response to a lawsuit filed by trucking companies. In December, 2024, the First Circuit Court of Appeals issued a decision permitting the State to resume the tolling program, subject to removing certain pricing policies that favored in-state companies.

B.    The Governor’s 2025-26 truck toll budget

In January, 2025, the Governor’s budget included expected revenue of $10 million from the resumption of the truck tolling program for the upcoming fiscal year (ending June 30, 2026). At a recent hearing, the Department of Transportation informed the House Finance Committee (led by the questions of Representative Tanzi) that the truck toll revenues for this fiscal year (ending on June 30) will instead be $0. The Department stated that the toll gantries were at the end of their useful life, and in need of $19 million in structural repairs and an unknown additional amount of software repairs.

C.   The Governor’s 2026-27 truck toll budget

The Governor’s budget for next fiscal year includes expected truck toll revenues of $20 million. The RIDOT representatives said the budget will be updated to include an estimated cost to repair the gantries and related software, which should be ready in late March. The RIDOT representative also indicated that the Governor will submit a budget amendment to account for anticipated repair costs. RIDOT’s representatives projected that the repaired gantries will be able to come online in March, 2027. The Governor’s budget does not include any legislation or other information about how tolls will be adjusted, if at all, in light of the Court’s decision invalidating price caps that favored local trucking companies. The administration needs to set prices to predict revenues, but it may be avoiding this step because it might not be welcomed by trucking companies.

D.   Questions about the truck toll budget

When the Department of Transportation presents its truck toll budget to the Senate Finance Committee, I hope we can learn more about its history and reliability. Some possible questions include these:

1.     If the gantries reopen in March, 2027, why did it require more than two years to accomplish that?

2.     What contingencies may prevent the gantries from reopening in March, 2027?

3.     Was it realistic for the Governor to include a $10 million revenue item in the 2025-26 budget, given the delays we have seen since then?

4.     Is the current $20 million projection realistic, given that it would anticipate six months of revenue over the last three or four months of the fiscal year?

5.     How will the toll prices change in light of the Court’s decision?

E.    Lessons in budgeting

1.     The difference between hopes and expectations

The opening theme song of the hilarious Mel Brooks movie The Twelve Chairs imparts this message: “Hope for the best; expect the worst.” I couldn’t stop laughing when I saw the movie years ago, but its message had special significance for me in 2011 when, as a newly elected member of the Providence City Council, my first budget had to deal with the wreckage of the City’s Category 5 Fiscal Hurricane. I learned at that time that officials developing a budget (such as those who developed previous City budgets) have an incentive to be overly optimistic. In addition to the questions of whether RIDOT has acted with sufficient diligence and efficiency in resuming the truck tolling program, one can ask whether the administration’s budgeting practices depend too heavily on hopes rather than reasonable expectations.

2.     The hope-based digital advertising budget line

The truck tolling program’s unrealistic budget is but one example; another is a $10 million revenue item in the administration’s 2025-26 budget for a digital advertising tax. While the administration hoped this revenue could have been realized, it was not reasonable to expect this. During last year’s Senate Finance Committee hearing, we learned that only one other state (Maryland) has enacted such a tax, and that it still subject to litigation that may require Maryland to refund the amounts it has collected to date. Replacing hope with realistic expectations, the General Assembly removed this revenue source from the 2025-26 budget, and made necessary other changes to restore its balance.

3.     Lessons to learn

Rhode Island law requires the passage of a balanced budget each year, a requirement that begins with the budget the Governor submits to the General Assembly in January. All elected officials want to deliver benefits to constituents, but we are required in each budget to show how those benefits will be paid for. A hope-based budget can contain popular programs, but if budgeted revenues (or savings) are based on hopes rather than realistic expectations, it becomes the General Assembly’s responsibility to “take the blame” for the hard choices to bring a budget into realistic balance. Though I did not fully appreciate it at the time, the 2011-12 Providence City budget, which made difficult choices to rectify the City’s finances, offered a “best practice” in reality-based budgeting that provides useful lessons for our State.