Financing a Crumbling Infrastructure

19

Jul

Financing a Crumbling Infrastructure

Surprise, surprise… according to an article in the Woonsocket Call, the State is forecasting a significant financial shortfall.

Rhode Island needs approximately $600 million a year to fix and maintain its highways and bridges and otherwise operate the state Department of Transportation (RIDOT); its current revenue stream provides about $300 million.

Here’s a crazy idea, what if we were to cut back on our infrastructure needs? Perhaps develop a better public transportation system and allow people to move themselves around freely? Nope,

the Blue Ribbon Panel for Transportation Funding has suggested tolls on Route 95 near the Connecticut line tolls on I-95 closer to Providence; increased gas taxes; or hiking the sales tax. Right now, says RIDOT Director Michael Lewis, all of those, along with a few others, are just suggestions.

I for one will be upset if they increase sales tax to fund road projects. As far as I’m concerned our transportation infrastructure is already overbuilt and impossible to fund in any ongoing way. Director Lewis himself says

a big part of the problem is that “we don’t use a sustainable model” for highway maintenance and improvements. “Rhode Island is very dependent on the federal highway program, probably more so than any other state,” Lewis explained. “The federal program provides 80 percent of the cost of a project; we have to have 20 percent matching funds. We get approximately $200 million in federal highway money, we have to come up with 20 percent of that, which is about $40 million a year.”

The state borrows that money, so it has to pay debt service on that $40 million a year from its operating budget, which is also used to plow roads, sweep the highways, cut grass along the sides of the roads and in the medians, clear drains. Those funds come from the state’s gas tax and the debt service represents about half of what the state takes in from the gas tax each year.

If a private citizen operated in such a manner, we would never be approved for additional loans. Rather than focus on dramatically increasing revenue, let’s stop for a moment and think about how we could make a smaller infrastructure more efficient. Thomas Ardito, director of policy and communications for the Narragansett Bay Estuary Program and founder of the Center for Ecosystem Restoration, recently published an article in the Projo discussing some of the very ideas we’ve been promoting for a while now.

In the midst of this crisis [high oil and gasoline prices], however, lies a sterling opportunity for Rhode Island: the chance to capitalize on our small size, high population density and extensive coastline by developing a truly innovative, next-generation statewide transportation system. It won’t be easy and it won’t be cheap, but it may be the single most important thing we can do to position the state for success in the 21st Century.

He proposes one of the possible mass-transit solutions could be high speed ferries. In reality, I think we need better, wide-spread mass-transit before we entertain the idea of a point-to-point solution. If people can’t easily get to where they are going once they get off the ferry, this solution will never take hold. But he continues to discuss two options we’ve discussed frequently.

Buses, of course, offer the cheapest and most practical alternative for improving mass transit in the near term, and the state deserves credit for maintaining the existing statewide system under the Rhode Island Public Transit Authority (RIPTA). Yet the great failing of our current mass transit is that, for most commuters, it’s far slower and less convenient than driving, and RIPTA remains a poor cousin to the state’s road-building efforts.

To bring about a real shift in transportation patterns, our goal should be to make mass-transit and bicycling more convenient than driving. There’s nothing more frustrating than sitting on a bus in a traffic jam, as often happens on Route 95 now. The state should install high-occupancy vehicle (HOV) lanes on Route 95 and Route 195 (as on Route 93 in Boston) and establish special bus routes elsewhere. Drivers who sit idling, stuck in traffic, while buses and people car pooling zip by them in the HOV lane will soon change their habits. Providence is in dire need of safe, convenient bike lanes, and traffic management that places the safety of pedestrians ahead of the convenience of motorists.

I couldn’t agree more with these statements. Unfortunately, the current climate looks extremely grim for even continuing the current RIPTA infrastructure. An article in the Providence Business News indicates that

the rise in fuel prices has spurred consumers statewide to cut back on gasoline purchases, in some cases by taking the bus, Mensel noted. That has meant less income for the transit agency [RIPTA], which derives much of its revenue from the state gasoline tax.

Let’s get serious about change RI. It’s not going to be easy, people are going to have to change their habits. One thing is for sure, the current mode of operations just aren’t going to continue working.

6 thoughts on - Financing a Crumbling Infrastructure

  • Reply Jul 21, 2008 at 12:12 pm

    It looks like Rhode Island is not alone. A recent article on mlive.com says that

    Michigan needs to double its spending on roads and bridges or many will keep deteriorating and become unsafe, says a report to a task force studying how to pay for transportation projects without raising the state's gasoline tax.

    "The status quo essentially guarantees our transportation system will continue to collapse," said Saline Mayor Gretchen Driskell, who chairs the Citizens Advisory Committee on Transportation Funding.

    Sounds familiar doesn't it?

  • Barry
    Reply Jul 22, 2008 at 9:38 am

    I like the vision Mr Ardito is outlining in the above post, and note he didn't even mention the $630+ million I-Way, which was selected to solve a I-195 bridge problem despite being about 3 times as expensive as the rebuild-in-place alternatives.

    The environment community (led by the RI Sierra Club) led opposition to the Quonset freeway (I still have an op-ed I got published on this) proposal, but the state's power structure insisted on it.

    However, these projects are to the point where they do need to be finished, so its too late now to correct those decisions. Also, we cannot expect that we would let existing bridges fall down or remain posted with very low weight limits, so we'll need to spend about $100 million on the I-95 bridge in Pawtucket, about $200 million for the Sakonnet Bridge, and at least $300 million for the bridges at the Route6-10 interesection near Olneyville. Its too late now to just say those bridges should have been maintained properly. And there are plenty of problems statewide on smaller more local bridges too.

    The design of Route 95 with its exits/entrance pattern makes high occupancy lanes very problematic, and an earlier look at that issue wound up rejecting them, though perhaps it can be revisited.

    Mass transit alternatives, including ferries, are expensive to build and/or operate. The cost for the commuter rail expansion south of Providence is getting to be very high. This is due in part to the bureaucratic requirements of the Federal Transit Authority, ADA requirements, insurance, Amtrak ownership issues, union contracts, fire codes, need to clean up brownfields, and more. And RIPTA just approved a contract for a metro area transit study that is to look at light rail, bus rapid transit and such, the study alone is about $450,000 but is a Federal requirement. Don't think anything much can be built and operaterd on existing revenue streams.

    Both RIPTA and RIDOT are financed with a flat gas tax, that not only does not go up with inflation, but with high gas prices it produces less revenue as people drive less and get more efficient cars. This is not sustainable. When Gov. Carcieri was first elected, his transition task force on transportation recommended the gas tax be indexed to inflation (not really a tax increase) to maintain purchasing power, but for obvious political reasons the Governor rejected this. DOT has gotten by with cigarette settlement money used to retire some debt and then borrowing in a new way from future Federal Highway allocations ("GARVEE" bonds) but this is like a ponzi scheme and the bill is coming due. RIPTA could not do that, and today's paper explains they now face a $12 million deficit that if eliminated with service cuts would drastically curtail the system.

    This is what I like about bicycling, it is intrinsically so much cheaper as well as healthier, less polluting, and potentially a lot of fun.

    But it won't replace all other transportation. There simply will have to be an increase in the revenue stream just to reasonably maintain what we have now. But the public should watch that future decions are wiser, that proper maintainance of facilites is done, and that bicycling is given some priority.

    Barry Schiller, RI Sierra Club Transportation Chair and member of Transportation Advisory Committee

  • Reply Jul 23, 2008 at 7:19 am

    I'm beginning to feel like John the Baptist… said all this 10 YEARS AGO and now we're on the verge of financial disaster.

    I propose a better solution. Let Connecticut ANNEX Rhode Island. It was the casinos that sucked all the fiscal vitality out of RI, so let they take over the mess.

    For a highway project, let them post EXODUS signs out to other New England states.

    Sorry, this is what is comes to if you, as taxpayers, don't pay attention or recall officials out of control.

  • Reply Jul 23, 2008 at 8:01 am

    Barry,

    I understand the position you take, but this Rhode Island is in such a financial crisis that I think it warrants taking a step back and rethink the long term goals.

    From what I've heard, the RIDOT budget is currently in a situation where almost half goes towards paying interest on loans. It's projected that by, 2012 (or some other not-to-distant date), essentially the entire budget will be used to pay for loans. I'd have to do some serious digging to confirm/disprove these numbers (anyone have this information handy?), but this is what I'm remember from some TIP notes a while back. If they are true, what then?

    It's time to think outside the box…

    I find it hard to believe that HOV lanes couldn't be added. Cities all around the country have them and they too have exits off their freeways. Perhaps we could live with lower weight limits on the bridges, if we had controlled HOV lanes where only known entities could enter them? Perhaps we close down one of the express lanes to vehicles all together and open them to bicycles and pedicabs?

    Some of the above are probably a bit wild, but who knows. The big issue is that the current spending just can't continue. The infrastructure is too big/complex for the available funds and without significant support from the federal government, can't be sustained. RI just released one of the highest unemployment rates in the country, do they expect to raise the tax rates even further to fund all this? It's time to tighten our financial belts and, yes, this probably means some inconvenience for motorists.

    Rhode Island needs to adopt a people first transit policy, where the focus is on moving people not cars.

  • Barry
    Reply Jul 25, 2008 at 7:53 am

    The RIDOT operating budget is indeed supported by the flat (and now declining) gas tax, which generates about $85 to $88 million annually for RIDOT. Of this, they pay about $42 million for debt service from previous bonds (that finance the 20% match for Federal capital projects, though they also use this capital assistance to fund some employee costs) which is almost half as Mark indicates above. However, pelase realize teh capital program, about $250 million annually, is 80% financed with Federal funds, though that is at risk as the Federal gas tax has not been raised in about 15 years (despite much inflation) and the fund is running out of money. This debt service is projected to rise to about $55 million by 2015, leaving jsut $22 million for RIDOT operations. This info is available in the Transportation 2030 plan on the Statewide Planning web site.

    It is not easy to just let the low weight limits persist, as for example tour buses that Newport's economy depends on may not be able to cross the Sakonnet bridge as it is now, and local bridges may not be safe for school buses. I think we simply have to face it, we cannot maintain and improve our transportation infrastructure without increasing the revenue stream. No painless way to do that.

    As I see it, Ronald Reagan seemed to convince Americans we can have government services without paying for them. Deferred road maintenance, inadequate public transportation, skyrocketing ublic university education, rising homelessness, missing food and mine safety regulation, deteriorating national parks, and more, are all part of the bills coming due.

  • Reply Jul 25, 2008 at 8:47 am

    Barry,

    You clearly have a much better handle on RIDOT funding than I do, thanks for the insights.

    I'm honestly not proposing that RI just let these bridges crumble, but I do think they need to take a step back and re-examine the long term goals of our transportation system. I think there are plenty of other state DOT groups around the country in the same situation, they just don't have the money to support the existing infrastructure. They are somewhat more fortunate than RI though, in that they don't rely on 80% of their budget to come from the Federal government.

    Sure, you can raise the revenue stream and will probably need to do this to get everything back on track, but to where? That is my big question. What is the long term plan? The tried and true infrastructure built up over the last X number of years may be impossible to continue supporting. Cities are forecast to continue growing at huge rates and, yet, the primary infrastructure concerns are over how to support the automobile. I have no problem paying my share of infrastructure costs, if I feel good decisions are being made and the focus is on moving people rather than cars. But I don't feel that is the environment we currently have.

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