Transportation 2035 - State of Rhode Island: Division of Planning

December 2012The table on the right shows the funds expected to be provided to RIDOT from the gas tax through 2035.The table also shows the expected RIDOT expenditures out of the gas tax (debt service and operatingcosts) for the same period, based on revised debt service costs after refinancing and the elimination offuture bonds. Gas tax receipts are projected to experience slow growth beginning in FY 2015, rising froma yield of $4.2 million per penny in FY 2013 to a yield of $4.4 million per penny in FY 2035.RIPTA’S USE OF STATE FUNDSRIPTA uses state gas tax funding to support all aspects of its annual budget, operations, maintenance,and local shares of grant programs. While RIPTA has other sources of revenue, such as passengerrevenue, contract revenue for services, advertising/rent, and federal funds, gas tax revenue is the largestsingle share, providing over 40 percent of the agency’s funds in recent years.While RIPTA has been making many investments in efficiency, bus service requires one driver for eachvehicle. The agency’s expenditures have typically been 70 percent labor, and expenditures are budgetedto increase each year due to inflationary pressures on the cost of labor. Therefore changes in gas taxrevenue directly affect the agency’s ability to provide service.In responding to budget challenges, RIPTA must act in accordance with labor agreements, and thereforechanges in service can only be implemented at one of three times during the year. RIPTA is required byfederal and state regulations to hold public hearings before making major service cuts or fare increases.Taken together, these procedural constraints mean that if RIPTA’s budget is reduced in June, RIPTA willnot be able to cut its operating costs until January of the following year. The agency is then faced withtrying to spread an annualized level of budget reduction over the space of half a year.RIDOT Operating Revenue & CostsFiscalYearGas TaxRevenueDebtServiceAvailable forOperations2013 $ 91.8 $ 41.2 $ 50.62014 $ 91.8 $ 38.5 $ 53.32015 $ 92.3 $ 45.0 $ 47.32016 $ 92.4 $ 47.2 $ 45.22017 $ 92.6 $ 46.8 $ 45.82018 $ 92.6 $ 40.7 $ 51.92019 $ 92.7 $ 39.7 $ 53.02020 $ 92.7 $ 36.8 $ 55.92021 $ 92.8 $ 43.0 $ 49.82022 $ 92.8 $ 40.2 $ 52.72023 $ 92.9 $ 39.6 $ 53.32024 $ 92.9 $ 31.2 $ 61.82025 $ 93.0 $ 28.3 $ 64.72026 $ 93.0 $ 28.3 $ 64.72027 $ 93.1 $ 25.0 $ 68.12028 $ 93.1 $ 23.4 $ 69.82029 $ 93.2 $ 16.9 $ 76.32030 $ 93.2 $ 16.8 $ 76.52031 $ 93.3 $ 7.3 $ 86.02032 $ 93.3 $ 7.3 $ 86.02033 $ 93.3 $ 3.5 $ 89.92034 $ 93.4 $ 1.6 $ 91.82035 $ 93.4 $ 0.5 $ 92.9Total $ 2,135.6 $ 648.8 $ 1,487.3When gas prices increase sharply, consumers tend to limit their purchase of gasoline. At the same time,ridership tends to increase as people turn to a less expensive alternative to cars. Therefore an increase in gasoline costs has a two-fold effect on RIPTA’sbudget: high gas prices both decrease gas tax revenue and increase the need for service.Transit bonding levels vary from year to year, depending on the need for bus replacement. In the past, RIPTA has used bond funds to meet Federal matchrequirements for the procurement of buses. RIPTA makes quarterly payments on the debt service for these bonds. Current repayments make upapproximately 1 percent of the agency’s annual operating budget. In moving forward, the General Assembly has discontinued the practice of bonding,replacing bond funds with State Fleet Revolving Loan Funds. The State Fleet Revolving Loan Fund requires repayment by RIPTA, but the intent of the GeneralTransportation 2035 (2012 Update)State Guide Plan Element 611Rhode Island Statewide Planning ProgramPage 3-11