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.