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RIPTA faces 90 layoffs, 20% service cut even with funding in proposed House budget
Even with $15 million in new funding proposed by lawmakers, the Rhode Island Public Transit Authority would need to cut up to 20% of bus trips and lay off 90 employees to balance its budget next year, according to a consultant hired to find efficiencies in the system.
The study identified ways RIPTA could generate between $2 million to $5 million in new revenue or savings, not enough to plug the agency's estimated $18 million budget gap.
"There are no efficiencies that can be found that would completely close the budget gap that we are facing and prevent service reductions," RIPTA CEO Christopher Durand wrote in a letter to House leaders on June 16. "This will mean a reduction to the fixed route workforce by approximately 90 employees to get the service inline with financial resources."
Such cuts to service will likely lead to "additional losses in terms of fare revenues," long-term loss of federal funds and loss of ridership due to diminished network effects and "inability to connect between routes," the study said.
The options for raising more revenue identified in the "efficiency study" include an increase to RIPTA's standard $2 fare. Although the memo sent to lawmakers doesn't say how big the fare hike consultants studied would be, it was estimated to raise between $1 million to $2 million, depending on if it were extended to all routes.
The study found that RIPTA could save up to $1 million by using federal reimbursement to pay for finance and procurement positions for capital projects.
It also recommended shifting resources from rural routes to "low income and reverse commute services."
And it said RIPTA's advertising revenue, which is roughly middle-of-the-pack for peer transit agencies, could possibly be boosted to make another $900,000 per year.
"We are continuing to work as hard as we can to complete the study and I believe we are nearing the final scenarios. I'm providing this information as a heads up as I don't want to catch anyone off guard," Durand wrote to lawmakers. "In no way should these findings diminish the investments that the House is proposing for RIPTA."
The study found RIPTA's operating costs are "in line with peer average" and its administrative costs are "below" average.
RIPTA, like most transit agencies across the country, saw ridership crash during the COVID pandemic. Loss of fare revenue was plugged with federal aid, but since that assistance from Washington was exhausted this year, RIPTA has been facing a $33 million deficit for the year beginning July 1.
As unpleasant as laying off 90 employees sounds, RIPTA was looking at up to 300 layoffs at the start of the year.
Having to trim the workforce would also be a bitter pill for RIPTA to swallow after it raised pay recently to recruit new drivers and fix a shortage that was forcing the cancellation of trips.
Gov. Dan McKee provided no additional funding for RIPTA in his budget proposal.
The House rewrite of his budget unveiled June 10 included $15 million in recurring revenue for RIPTA in a proposed increase in the gas tax.
Along with the funding, the budget mandates that RIPTA not cut the RIde Anywhere paratransit pilot program, which cost around $500,000 in its first year.
The House passed the $14.4 billion state budget on June 17. It now moves to the state Senate.
Liza Burkin, organizer of the Save RIPTA campaign and Providence Streets Coalition, said the latest consultant's report showed that there is no major inefficiency at the agency that can be fixed to close the budget gap.
"Failing to fund RIPTA's $18M shortfall will initiate a chain reaction of route cancellations, fare hikes and job layoffs that will in turn lead to lower ridership and increases economic hardship," Burkin said. "This will ensure we will never achieve a robust system that affordably and sustainably gets people where they want to go."
This story has been updated with new information.
This article originally appeared on The Providence Journal: Consultant: To balance budget, RIPTA needs to lay off staff, cut service
