Bonds

Rhode Island appeals ruling on closely watched bridge tolling lawsuit

Rhode Island last week appealed a decision that struck down its first-of-a-kind tolling program in a case that’s closely watched by other state transportation departments looking to drum up new revenue for transportation infrastructure.

The Rhode Island Department of Transportation asked the U.S. Court of Appeals for oral argument, saying the case raises “important questions related to federalism,” in part because the lower court ruling struck down a state law on federal constitutional grounds and limits “a state’s effort to solve its complex infrastructure problems.”

In September, a U.S. District Court in Rhode Island ordered the state to stop collecting tolls, ruling that the program, which only applies to large commercial trucks, discriminates against out-of-state truckers and violates the dormant Commerce Clause, which prohibits states from excessively interfering with interstate commerce. 

The ruling “transformed the dormant Commerce Clause into a mechanism for federal courts to displace the reasoned judgments of state legislatures seeking to solve complex infrastructure problems,” the state said in its 181-page appeal.

Enacted in 2018, Rhode Island’s toll program features 12 tolled bridges, with a 13th in development, that charge only the heaviest commercial trucks to raise money for the state’s 10-year, $4.7 billion RhodeWorks transportation program. The toll stations, nine of which are on Interstate 95, were estimated to generate around $45 million a year.

The American Trucking Associations, Inc. and other trucking groups sued, calling the law discriminatory and unconstitutional. The group hailed the September district court ruling as a major victory.

The litigation is closely watched by toll advocates and the interstate transportation industry as states search for new revenue streams as the value of the gas tax declines.

Tolling is generally not allowed on roads and bridges that have been built with federal funds, but federal law allows for several exceptions, which many states have pursued or are eying, most recently Michigan.

Connecticut in January began levying what it calls a “highway use fee” on heavy tractor trailers to drum up new money for infrastructure improvements. The new law remains controversial, and state Republican lawmakers and truck groups are hoping to repeal it.

“Rhode Island faces an infrastructure crisis,” the state said in its appeal, saying 23% of its bridges have been deemed structurally deficient. “Existing revenue sources – principally federal funds, state bonds and fuel taxes – generate ‘insufficient revenue’ to ‘fund the maintenance and improvement of Rhode Island transportation infrastructure.”

The court ruling had “far-reaching implications,” said Robert Poole, the Reason Foundation’s director of transportation policy in a September blog post, calling the tolling program a “disguised border toll.”

“Trying to make non-residents pay the majority of the tolls on a replacement bridge is likely to violate the dormant Commerce Clause,” Poole said. “And in any future liberalization of interstate tolling, Congress should insist that toll rates be the same for in-state and out-of-state users.”

The case could also affect New York’s controversial congestion pricing program, said the Eno Center’s Jeff Davis in an analysis of the September ruling.

“[T]he discrimination principles at play here are the same whether it is Rhode Island giving favorable treatment to home-state trucks or New York giving any kind of favorable treatment to outer-borough New Yorkers over New Jersey residents in a congestion pricing scheme,” Davis wrote.

Heavy trucks-only tolling programs work well in Europe, said the International Bridge, Tunnel and Turnpike Association, which represents owners and operators of tolled and priced roadway facilities, in a statement to the Bond Buyer in support of Rhode Island.

“These programs have been successful in supporting the business interests of commercial highway users and the related investment in maintenance of critical roadways essential to their mission of reliable and safe goods movement,” the IBTTA said. “Many road-pricing practices recognize the impacts that different highway users exact upon infrastructure and the life-cycle costs of maintaining transportation assets through differentiated pricing. IBTTA believes the RhodeWorks program met all the relevant criteria as we believe they are understood by our industry.”

The IBTTA also filed a Feb. 17 amicus brief in support of Rhode Island.

The state has no bonds backed by the toll revenue, according to a Rhode Island Department of Transportation spokesperson. The state’s Garvee bonds, backed by federal funds, remain unaffected by the decision. Because it applies strictly to the truck-only program, the ruling is not expected to affect the Rhode Island Turnpike and Bridge Authority, rating analysts said previously.

Articles You May Like

Trump defeats Haley in South Carolina Republican primary
Israel unveils plan for complete postwar control of Gaza
Stocks making the biggest moves after hours: Block, Carvana, Booking Holdings and more
Warren Buffett says Berkshire may only do slightly better than the average company due to its sheer size
Hungary to ratify Sweden’s Nato membership