Distribution Center Delays Expansion Over Rhode Island Truck Tolls
The owners of Ocean State Job Lot say Rhode Island Gov. Gina Raimondo's new big-rig truck tolls, headed for likely House and Senate passage this week, have led them to put a $50 million expansion on hold.
Given the likely passage of Raimondo's toll-and-borrowing plan, unveiled little more than a week ago, David Sarlitto, Job Lot's executive director, issued a statement Feb 6: "A 500,000-square-foot, $50 million distribution center is now on hold pending review and discussion with the state regarding business practices."
"I haven't heard really anybody arguing that the bridges and roads ... shouldn't be repaired," company CEO Marc Perlman told lawmakers earlier last week. But "we were promised that Rhode Island companies, Rhode Island truckers would not be bearing the whole responsibility."
Raimondo said the company's announcement may be a bluff to influence whether the toll plan is adopted.
"It's very hard to believe," Raimondo told reporters Feb. 6 after speaking at a computer-programming conference at Brown University. "I have businesses in my office every day [saying,] 'If you don't do this, we're going to leave.'" She said that giving in to such threats is no way to govern.
But Raimondo said she would reach out to Job Lot and speak with company officials. "I'm sure they're very frustrated — nobody wants to pay the bill here."
Raimondo also said that a plan to mitigate the cost of tolling for local companies, while not part of her tolling plan or budget proposal, is not dead. She said still is working on how to reduce the burden for Rhode Island truckers.
Added House Speaker Nicholas Mattiello: "Tolls are a tax-deductible business expense, and the company will derive great benefits from improved roads and bridges throughout the state. I am meeting with Marc Perlman on [Feb, 8], and I look forward to a productive discussion."
With final votes imminent this week, the debate over the proposed tolls on large commercial trucks is reaching high pitch, in a bevy of newly sprouted ads playing out online, in print and on radio and TV, including a pro-toll ad paid for by Mattiello's "Fund for Democratic Leadership."
The impact of truck tolls on Rhode Island businesses became a major discussion point at House and Senate hearings Feb. 3-4 as legislation to authorize the new truck tolls and a $300 million bridge repair bond sped toward potential General Assembly approval this week.
Earlier last week, Perlman told the House Finance Committee that the proposed $20 tolling cap to cross the state — a maximum of $40 per day, per truck — would cost his company more than six times what he pays in tolls in every other state where he does business.
With Job Lot's 16,000 trips in and out of the company's warehouse in Quonset, and another 7,000 trucks in and out making deliveries, a $40-a-day toll would cost the company an estimated $1 million a year, Perlman said.
By comparison, he said, the cost of all toll fees throughout Rhode Island, Massachusetts, Connecticut, Maine, New Hampshire, Vermont, New York and New Jersey totaled just $160,000 for his company in 2015.
"The Rhode Island toll structure is simply out of proportion with our neighboring states," he told the lawmakers. (Raimondo spokeswoman Marie Aberger disputed Perlman's contention, saying Feb. 6 that the new $20 tolling cap to cross the state is "well below what trucks pay in many other states in the area.")
An earlier version of Raimondo's "RhodeWorks" proposal would have provided $13.5 million in new tax credits and rebates to Rhode Island-registered truckers and shipping companies — to help offset the estimated $16.7 million a year they will pay in tolls.
Amid threats of a lawsuit, the proposal was dropped from the plan, but the governor and legislative leaders now are saying they will consider relief for the truckers, at another time, in another format.
On Feb. 6, Mattiello responded to Ocean State Job Lot's announcement: "The state has been, and will continue to be, a partner in assisting Ocean State Job Lot with incentives."
Raimondo says Job Lot's announcement may be bluff. Do you think that's the case? Posted by The Providence Journal on Sunday, February 7, 2016
For her part, Raimondo underscored the need for immediate action to fix Rhode Island's roads and bridges.
"They're going to fall down if we don't do something," she said.
Raimondo's office did not respond directly to Job Lot's numbers.
But Aberger cited the thousands of publicly financed construction jobs the governor's toll-and-borrow plan would create and the need for bridge repairs.
Repeating the governor's oft-heard explanation for the spending surge, she said: "If we don't take action, and let our bridges continue to crumble, no companies will want to be here or add jobs here. Our bridges are unfortunately at the point of disrepair where we have no other option but to make some tough choices and take action to fix them. We can't pass the buck any longer. "
Comparing tolls around the region, Aberger said the one-way tolls that commercial truckers pay to cross Maryland are $90; Delaware, $41; Pennsylvania, $182; the New Jersey Turnpike, $57; New York-New Jersey over the George Washington Bridge, $126; Massachusetts, $22; New Hampshire, $6. (Connecticut does not impose tolls.)
"Having said that, we are listening, we take the concerns seriously and we are continuing to work cooperatively with businesses and the General Assembly on addressing these issues," Aberger said.
On Feb. 3, the Rhode Island Public Expenditure Council released a report concluding that borrowing the money necessary to fund RhodeWorks would cost less than borrowing and tolling.
Citing an economic study commissioned by the state last year, the RIPEC report said, "The economic benefits associated with the program result from increased state spending on construction. The economic impact of the tolling program by itself, however, is negative."
