With higher gas prices, RIPTA anticipates drop in taxes

As frustrating as gas prices are for drivers, the state of Rhode Island is taking a hit, too.

Just ask Charles Odimgbe, CEO of RIPTA. With gas prices now averaging $3.87, this might actually be good news for RIPTA. You might think with higher gas prices, more people will ride the bus, thus being good news for RI’s public bus system. However, even with gas teetering at the $4 mark in recent months, there has not been a significant increase in bus ridership, or at least, nothing attributable to the higher gas prices, said Odimgbe.

This is because of the gas tax, how RIPTA and others receive their funding. Throughout the state, other entities are impacted by the gas tax as well. According to Charles St. Martin, spokesman for Rhode Island Department of Transportation, the state gas tax equals 33 cents on every gallon of gas. The gas tax is divvied up amongst four groups: 21.75 cents goes to DOT for a total of $92.8 million last year; RIPTA gets 9.75 cents for a total of $41.6 million; RIde, the elderly transit system, gets 1 cent, totaling $4.3 million; and underground storage receives the remaining half-cent for $1.3 million.

Ironically, RIPTA could lose money when gas prices go up. By increasing riders, this means fewer drivers are buying gas, which translates into reduced revenues for RIPTA. Odimgbe said when the gas tax funding system was first introduced it seemed to be a sound financial decision. However, he said, in retrospect, it was not the best idea, mainly because the gas tax doesn’t account for inflation. Even when drivers are spending more at the pump to fill up their tanks, the state isn’t receiving a higher yield.

“Right now, the Senate Committee on Transportation is working on finding a new way to fund RIPTA,” said Odimgbe. “The committee is open to new ideas and are looking at other states’ methods of funding public busing. Funding based on sales tax, a combination of sales tax and general funding, and the re-allocating of vehicle registration money are all being looked at as possibilities.”

Mark Therrien, assistant general manger of RIPTA, said typically when gas gets to over $4 a gallon, that’s when ridership increases and the phones at the RIPTA office begin to ring more often. While that has not been the case so far this year, at least one Warwick resident has made the switch.

While waiting for a bus at Hoxsie Four Corners, a rider who wished to remain anonymous said she began parking and riding a few months ago in an effort save some money.

“Taking the bus decreases the gas bill, but also I can use that saved money to pay for some other bills. And riding the bus isn’t nearly as bad as I thought it might be,” she said.

Warwick remains a steady provider for RIPTA with several popular destinations such as Green Airport, Warwick and Garden City Malls, CCRI Warwick Campus, and Warwick Avenue, just to name a few. Just over 13,000 RIPTA riders are in and out of the Warwick area each week. It’s not as if RIPTA is losing popularity, especially amongst its Warwick users, but these numbers remain consistent with other instances with high gas prices.

Odimgbe said, “Studies conducted by RIPTA show that for the majority of Rhode Islanders, even when gas prices are high, people still find ways to adapt. They buy less gas but also drive less.”

Also trying to adapt transportation options within the past year has been CCRI. Recently a program began that allowed students to purchase bus passes at half price while the college picked up the remaining tab. According to Kristen Cyr, public relations officer for CCRI, “The idea began with a pilot program in 2009 but came to an end in June 2010 when expected federal funds to subsidize the cost were no longer available.”

However, the program was put back into effect during the spring with a newly instituted commuting fee. Students pay $1 per credit (for a total not to exceed $12), which subsidized the cost.

CCRI Business Manager Ruth Barrington said in a statement, “With the price of gas going up, we wanted to give more students the opportunity to use public transportation.”

The Rhode Island Department of Transportation faces similar problems in dealing with their budget, as funds for operation costs are seemingly unavailable.

“Our maintenance department has always been self-reliant on the gas tax but now the reliance has shifted to other state funds as well,” said St. Martin.

Per penny, the state currently yields about $4.2 million from the gas tax, but this total has been decreasing every year since 2007 when the total was $4.7 million. St. Martin said DOT has been suffering the ramifications of the decreasing tax revenues.

“Because of the decline, we see less revenue and this means we have less ability to pay for our operation costs,” he said.

DOT operations include activities such as snow plowing, street sweeping, powering streetlights, and highway maintenance.

DOT uses the federal gas tax (18 cents for every gallon) to pay for the actual road projects. The federal gas tax revenue has remained steady but could see a potential decrease as soon as next year, said St. Martin.

“Without sufficient federal funds, this could mean projects taking longer to complete or possibly withheld until a later time,” he said.

Despite the problems a tough economy and the inequitable gas tax can create, RIPTA manages to offer several commuter resource programs in an effort to provide a suitable alternative. Riders with a registered carpool can park downtown in the Providence Place garage for $2.50 a day. And the more riders in the carpool, the less each rider has to pay to park. RIPTA also created the Eco-Pass fare program to encourage employers to fund transit trips for their workers. During a past House Committee on the Environment and Natural Resources meeting, John Flaherty said there have been successes with the Eco-Pass program, especially with Blue Cross. DOT Director Michael Lewis, speaking at the same meeting, said, “Growth can only come from multi-modal, or by adding new options for getting around.”

Regarding growth, Odimgbe said, “RIPTA is still in its infant stage of evolution and we look forward to making progress into an economically sound future.”

According to Odimgbe, even with withering funding, RIPTA still provides 18 million rides every year and approximately 12 million of those rides get people to and from work.