Motorists were already facing a penny increase in the tax they pay for every gallon of gasoline on July 1, 2025. But now they face the possibility of paying more in order to cut the Rhode Island Public Transit Authority’s (RIPTA) looming budget deficit.
Under the House of Representatives’ version of the fiscal 2026 budget released late Tuesday night, the state’s gas tax — now slated to rise from 37 cents per gallon to 38 cents on July 1 — would rise by another two cents to 40 cents, with that bump directed toward the RIPTA. The move would generate $8.7 million for the cash-strapped agency according to a summary of the proposed House budget.
The House’s budget also ups RIPTA’s share of Highway Maintenance Account funding by $5.9 million, plugging the agency’s budget gap by nearly $15 million. Revenue for the fund comes from vehicle registration fees.
The total of $14.6 million helps to plug a $32.6 million deficit the agency faced in the governor’s budget released in January. RIPTA CEO Christopher Durand expressed gratitude to House lawmakers for recognizing the urgent need to find more revenue for the agency in a statement Wednesday.
“The agency has long needed a consistent funding stream to allow us to better support getting Rhode Islanders to work, school and healthcare,” Durand said. “The last time the agency saw a permanent change in its funding structure was over ten years ago.”
But the remaining $18 million gap could mean RIPTA may have to lay off drivers and reduce or eliminate bus routes. Durand said the agency’s staff is still analyzing the full impact that the new budget gap could have on RIPTA’s services.
Rhode Island’s gas tax is the highest among New England states, according to January 2025 data from the U.S. Energy Information Administration. Motorists who buy gas in Vermont now pay 32 cents per gallon while the tax is 30 cents in Maine, 27 cents in Massachusetts, 25 cents in Connecticut and 24 cents in New Hampshire.
But there are no complaints about the increased tax from AAA Northeast, which puts out weekly updates on the average cost of gas in Rhode Island. As of Monday, Rhode Island drivers paid an average of $2.97 per gallon.
“AAA Northeast generally supports gas taxes that help fund and improve broader transportation infrastructure, from roads and bridges to mass transit,” spokesperson Mark Schieldrop said in an emailed statement. “Funding for public transportation can lead to increased use and ultimately, less traffic congestion for drivers.”
The gas tax on every gallon of motor fuel purchased in Rhode Island is adjusted every two years based on inflation to comply with a 2014 law.
Service cuts appear ‘inevitable’
John Flaherty, a senior adviser for GrowSmart RI, called the nearly $15 million revenue infusion “a step in the right direction,” but still worries it’s not enough to keep RIPTA’s operations at existing levels.
“Until we commit to building a system that’s going to work for more people in this state, we’re going to continue to deal with this issue,” Flaherty said in an interview. “It seems inevitable that there will be some service cuts.”
Providence Streets Coalition Board President Liza Burkin estimates RIPTA could see 160 layoffs and significant service cuts, including paratransit service for riders with disabilities. But House Speaker K. Joseph Shekarchi told reporters Tuesday night that the paratransit program will remain untouched and that he did not see other service cuts as inevitable.
Shekarchi pointed to an overdue efficiency study lawmakers mandated in the fiscal 2025 budget as a way the agency can save costs on staff, operations and equipment.
“I think they need to look at everything,” Shekarchi said.
RIPTA’s board of directors commissioned WSP to do the efficiency study on March 27 at a cost of $412,346. The study is being completed in three phases. An initial 19-page memo from Canadian-headquartered engineering consulting firm WSP was thin on details in comparing RIPTA with five peer agencies across the country. It did point to an agency’s pursuit of “universal access agreements,” defined as partnerships where employers pay an annual fee to cover their workers’ fares to commute.
RIPTA entered such an agreement with Amazon and through partially subsidized fares for Omni Providence Hotel employees.
In a 20-page draft report issued May 30, WSP recommended investing in routes that are already high performing, potentially eliminating underperforming routes, and expanding commuter programs.
Low-scoring routes in the report include the 88 bus, which travels in the morning and afternoon from Simmons Village in Cranston to the Walmart off Plainfield Pike; Route 69, which connects the University of Rhode Island to the Port of Galilee; and the 59X express route in North Smithfield and Lincoln.
But transit advocates want all routes to be maintained, arguing that low ridership routes often provide a vital service for the state’s most vulnerable residents. They add that RIPTA is already an efficient agency.
“I have no confidence that another efficiency study is going to reveal some big savings that’s going to enable us to get on with building a system that gets more people where they’re going in a reasonable amount of time,” Flaherty said.
Zack Mezera, Rhode Island organizer for the Working Families Party, expressed concern that lawmakers chose to raise the gas tax instead of enacting a higher income tax on Rhode Islanders earning over $625,000 a year.
“Throughout this session, Rhode Islanders have been at the State House week after week, imploring state leaders to increase revenue by having the 1% pay their fair share this year, because we can’t afford to let the losses pile up,” Mezera said.
The House released its proposed budget on the same evening the Rhode Island Senate unanimously confirmed Bernard Georges to join RIPTA’s board of directors. Georges told Rhode Island Current he was aware of the agency’s financial woes, but still needs to get up to speed.
“I need to give myself a full insight about the operations of the organization,” he said.
Rhode Island Department of Transportation Director Peter Alviti Jr., the chair of RIPTA’s board of directors, said the eight-member panel will be meeting on how the agency can move forward on whatever final budget is provided.
“As the Speaker said, our decisions will be informed by the efficiency study,” Alviti said in a statement Wednesday afternoon.
This story was originally published by the Rhode Island Current.
