As we approach the winter solstice, I invite you to enjoy one of the many seasonal lights displays. In this week’s letter, I will discuss the recent court decision upholding Rhode Island’s truck tolling program, as viewed in the context of funding our State’s transportation system.
1. The Rhode Works Program
a. The Program’s Introduction and Lawsuit
Rhode Island enacted the Rhode Works program in 2016 to pay for the maintenance of highway bridges through the charging of tolls to tractor trailer trucks, which caused greater damage to our roads and were owned and operated largely by out of state companies that did not otherwise contribute to the cost of maintaining the roads they used. To accommodate local companies, Rhode Works incorporated a daily maximum toll for trucks that traversed the highway on multiple times during the same day. Upon its enactment, the American Trucking Association and others sued in federal court, arguing that the program created an unconstitutional burden on interstate commerce. The Federal District Court entered a judgment finding the program unconstitutional and ordering its immediate termination. The State appealed.
b. The First Circuit’s Decision
On December 6, the First Circuit Court of Appeals issued a Decision upholding, for the most part, the lawfulness of the Rhode Works truck tolling program. The decision rejected a challenge that the program unconstitutionally discriminated between tractor trailer trucks and other trucks, but upheld a challenge to the program’s cap on daily tolls charged to trucks who use the highways multiple times. The parties challenging Rhode Works have a few legal avenues to continue their challenge in the courts, but in all likelihood these challenges as a practical matter have reached the end of the road.
c. The Consequences of the Decision
According to a House Fiscal Office report, the Rhode Works program generated $38.4 million in toll revenue in its final full year of operation (prior to its court-ordered termination). Once the legal proceedings conclude, the Rhode Island Department of Transportation (RIDOT) can resume the program, subject to a modification that removes the daily cap on tolls. This may involve reaching an accommodation with local businesses whose trucks use the highways several times a day.
2. The Motor Fuel Tax
The Rhode Works tolls are one component of the State’s Transportation Improvement Program, which according to the same House Fiscal Office report, currently commands annual investments of upwards of $300 million. The federal government provides the great majority of these funds, but the State provides required matching funds primarily from two sources, namely general revenues and the motor fuel tax.
a. Revenues and Uses
According to a Senate Fiscal Office report, Rhode Island’s 37.5 cent per gallon gasoline tax will generate $160 million in revenues this year, or roughly $4.3 million per penny of tax. Of that amount, 21.25 cents is allocated to the Department of Transportation, 2 cents for bond debt service, and 9.25 cents to the Rhode Island Public Transit Authority (RIPTA), among other recipients.
b. Policy Benefits
Rhode Island’s motor fuel tax advances two important policies. First, it is a user fee, through which motorists who benefit from our highway system contribute to the cost of maintaining it, while non-motorists do not. Second, it is a form of carbon tax, through which those responsible for a source of greenhouse gas emissions either pay for some of the costs they impose, or receive an incentive to reduce those costs. Rhode Island’s motor fuel tax is currently indexed to inflation, and is reviewed every two years. In 2023, the Governor’s budget proposed “pausing” (or canceling) that year’s scheduled motor fuel tax inflation adjustment. As I wrote at the time, I opposed this “pause,” and thankfully the General Assembly budget restored the inflation adjustment.
c. Future Revisions
Next year’s budget is scheduled to include the next inflation indexing of the motor fuel tax. According to the Senate Fiscal Office report, we can expect a one cent per gallon increase, but I think it is possible that recent inflation will merit a two cent increase. The Senate Fiscal Office report predicts the extra penny will go to the Department of Transportation general budget, but I will advocate for greater funding for RIPTA.
d. Funding RIPTA
As noted in previous letters, the State has consistently failed to fund RIPTA adequately, frustrating the transportation needs of many Rhode Islanders, while also impeding our progress to reduce greenhouse gas emissions from automobiles. In next year’s budget cycle, I plan to advocate for a shift in motor fuel tax revenues from RIDOT (which is projected to receive $101 million in gas tax revenues) to RIPTA (which is projected to receive $40.6 million). The court decision will restore tens of millions of dollars to Rhode Works, at a time when RIPTA was funded last year in part with one-time federal pandemic relief funds. While I wish there were political support for even greater increases in the motor fuel tax as both a user fee and a carbon tax, in the absence of that support, I believe it is time for us to change our use of these revenues to align better with the needs of bus passengers and the mandates of the Act on Climate.