RIPEC: RhodeWorks plan may not generate enough revenue in short term

PROVIDENCE – The governor’s proposed truck toll plan, RhodeWorks, would generate substantial long-term funding for transportation projects, but may not provide enough revenue in the short term, the Rhode Island Public Expenditure Council said Wednesday.
RIPEC released its analysis of Gov. Gina M. Raimondo’s plan, which would collect tolls from heavy commercial trucks to help finance the reconstruction and repair of Rhode Island bridges, overpasses and roads. The proposal consists of $300 million in borrowing and $45 million in tolling revenue annually.

To analyze the proposal, RIPEC said it conducted a cash-flow analysis comparing the state Department of Transportation’s publicly-stated expenditure needs with available funding, discovering that RIDOT has an estimated funding gap of approximately $450.6 million over six years, from fiscal 2016 to fiscal 2021.
RIPEC said that the proposal does not provide sufficient resources to meet RIDOT’s annual cash flow requirements in fiscal 2020, 2021 and 2022.
However, the proposal does provide sufficient resources to meet RIDOT’s entire 10-year funding requirements over the fiscal 2016 to 2025 period, RIPEC said.

RIPEC’s report includes cash-flow models for three alternative financing plans it developed for the fiscal 2016 to fiscal 2025 time period, as well as for fiscal 2016 to fiscal 2032.
RIPEC said the three alternative plans all provide sufficient funding for the RhodeWorks program, which include bridge repairs and maintenance, reconstruction of the Route 6/10 Interchange and all other proposed transportation programs and projects.

RIPEC Model 1 includes increased borrowing only, without tolls or other sources of new or increased revenue. RIPEC Models 2 and 3 consider implications of reducing the $45 million tolling program and increasing the size of the $300 million federal GARVEE bonds currently under consideration.
The study also found that the current proposal features the greatest local cost over the fiscal 2016 to fiscal 2036 time period. Assuming that a minimum of 40 percent of the tolling cost will be borne by local entities, and including interest costs, the current proposal is estimated to have a total local cost of $531.4 million over the 20-year period, RIPEC said. (GARVEE stands for Grant Anticipation Revenue Vehicle and are made in anticipation of the federal government paying bonds off that are used for transportation infrastructure projects.)

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In comparison, Model I assumes GARVEE borrowing of $515 million and no tolling; it would have a total local cost of $282.2 million over the same time period.
RIPEC Model 2, which assumes a GARVEE borrowing of $435 million and $20 million in tolling revenue annually, would have a total local cost of $368.3 million.
While RIPEC Model 3, which assumes a GARVEE borrowing of $400 million and $30 million in tolling revenue annually, would have a total local cost of $409.3 million.

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