Ocean State Job Lot puts expansion on hold over tolls

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NORTH KINGSTOWN, R.I. (WPRI) – Ocean State Job Lot has put its opposition to the proposed truck toll legislation on the record.

At a ribbon-cutting event Saturday morning in North Kingstown for the retail chain’s newest store, Job Lot marketing chief David Sarlitto told the assembled crowd that the company is putting on indefinite hold a $50-million project to build a new 500,000-square-foot distribution center in Rhode Island.

“We’re putting it on hold for a simple reason,” Sarlitto said. “There’s a wall right now that looks to be being built that is not supportive of businesses in the state.”

That wall, he explained, is Gov. Gina Raimondo’s proposal to toll large commercial trucks on area highways, which is scheduled for committee votes in the House and Senate next week.

“This is a comment that we really thought long and hard before making,” Sarlitto said, saying that the company prefers to stay out of politics but could no longer remain silent on the issue. His comments came two days after executives testified against the proposal before the House Finance Committee.

Sarlitto said that the truck tolls would effectively be a new tax that would result in higher prices for Rhode Island consumers.

John Conforti, Job Lot’s chief financial officer, told WPRI.com the company estimates the toll proposal will cost it an additional $1 million per year. By comparison, he said, total toll costs across the entire chain, which has 120 stores in eight states, currently total approximately $160,000.

The legislation “will dramatically increase the cost to Rhode Island-based businesses who are receiving and/or shipping via tractor trailers,” Conforti said in an email.

Governor Raimondo appeared on this week’s Newsmakers to discuss the toll proposal, and defended the decision to implement tolls to finance significant bridge repairs statewide.

“I’ll be very honest: do I love having to increase taxes or put up tolls? No,” Raimondo said. “But I face the worst bridges in America. Too many people before me have said, pass the buck, pass the buck, and we haven’t maintained anything.”

A study released earlier this week by RIPEC, a think tank, suggested it would be cheaper for the state to borrow all the money for bridge repairs rather than pair borrowing with tolls. But Raimondo said she’s uncomfortable with borrowing that much, and said she had not seen any competing proposals that could provide adequate funding.

As far as the mounting objections from companies like Job Lot, Cumberland Farms and UPS, Raimondo said Rhode Island leaders “are very open to the possibility of coming up with an economic package that would take these concerns into account.”

Conforti told WPRI.com a major part of Job Lot’s concern stems from the fact that this year’s version of the toll legislation no longer includes a proposed $13.5-million package of incentives for local companies to offset roughly 70% of the cost of tolls. He noted that no details are currently available on the separate package of incentives Raimondo indicated is being discussed.

“We understand that bridges and roads need to be repaired,” Conforti said. “We are proud to be a Rhode Island-based company that has a consistent record of investment, growth, job creation, and community involvement and we are willing to do our fair share!”

Nevertheless, Conforti said Job Lot still plans to present its proposal for the $50-million expansion project to the R.I. Commerce Corporation board later this month.

“We would immediately resume our plans if we were not talking about tolls or, if as originally promised, the 70% offsetting credit was made available to RI-based businesses, like Ocean State Job Lot,” he said.

House Speaker Nicholas Mattiello, who supports the new version of the toll legislation, said he plans to meet with Job Lot CEO Marc Perlman on Monday for “a productive discussion” about their disagreement.

“Ocean State Job Lot has received many benefits from state government, including a reduced corporate tax rate, an elimination of the sales tax on utility expenses, and the creation of a highway into its facility at Quonset Point,” Mattiello said in a statement.

“The state has been, and will continue to be, a partner in assisting Ocean State Job Lot with incentives,” he continued. “Tolls are a tax deductible business expense and the company will derive great benefits from improved roads and bridges throughout the state.”Ted Nesi contributed to this report.

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