Connecticut Governor Looks to Tolls, Transportation ‘Debt Diet’ to Balance Budgeteditor@aashto.org February 22, 2019 0 COMMENTS
Gov. Ned Lamont (D) (seen above) is seeking to reduce transportation spending in the near-term in order to help balance Connecticut’s budget via a “debt diet,” while implementing new tolls on both cars and commercial trucks to rebuild funding levels to support future infrastructure investments.
According to fiscal year 2020-2021 budget details issued by the governor’s office on Feb. 20, that “debt diet” would scale back annual bond authorizations from the $1.59 billion averaged between 2012 and 2019 to $960 million per year – a cut of nearly 40 percent – which is part of Gov. Lamont’s overall goal of reducing Connecticut’s long-term debt service payments to potentially save the state as much as $2 billion over the next decade.
“Some people have espoused ‘priority bonding,’ where we further cut back on economic development and other bonding in favor of transportation,” Gov. Lamont noted in an op-ed published on Feb. 16. “Connecticut is in dire need of a ‘debt diet’ and as such, I cannot support this type of borrowing to pay for ongoing and continuous repairs and upgrades – it is not sustainable or wise. The legislature previously established a bond cap and I know they appreciate how important keeping to our debt discipline is.”
As a result, the governor noted in his biennial budget address before the state legislature on Feb. 20 would not continue to divert the car sales tax into Connecticut’s Special Transportation Fund “beyond current levels,” as that would, in his words, “take money from one leaky bucket and put it into another.”
According to news reports, that proposal would end up leaving an estimated $91 million in revenue from tax applied to new car sales in the general fund of the Connecticut budget, instead of being moved over to the Special Transportation Fund.
To replace that revenue, the governor submitted two tolling options – one only on commercial trucks or an all-electronic toll system for both cars and trucks.
“We will explore public-private partnerships to maximize the value from these new revenue streams,” he explained in his speech.
“In these partnerships, I will ensure that the public side doesn’t carry the downside risk while the private investors enjoys the upside,” Gov. Lamont said.
While the governor stressed that he supports truck-only tolling – similar to what’s being done in neighboring Rhode Island and which could generate $200 million if applied to all major Connecticut highways – it is an option with limits.
“Assuming our attorneys are correct, the truck-only tolling could provide a down payment on repairing our bridges, but not enough to rebuild our transportation system without additional revenues,” Gov. Lamont said.
Conversely, a study conducted by the Connecticut Department of Transportation last year found that the state could raise approximately $1 billion annually using all-electronic tolling on its highways for all vehicles.
The governor stressed, though, that if a tolling plan for both cars and trucks gains support, “I would only consider this option if we maximized the discount for Connecticut EZ-Pass users and/or offered a ‘frequent driver’ discount for those who are required to frequently travel our major roadways. It’s estimated that out-of-state drivers could provide over 40 percent of tolling revenue for Connecticut. We foot the bill when we travel through neighboring states, it’s time out-of-state drivers do the same for Connecticut.”
He added that Connecticut’s gasoline tax revenues “have been flat for 10 years and are expected to begin declining as cars become more efficient” and as the sales of electric vehicles increase.
That’s why he said he sees no other viable way to generate the money needed to fund “infrastructure upgrades” to the state’s transportation system.
“There is no doubt in my mind that our transportation fund will require additional strategic and recurring revenues in the very near future,” Gov. Lamont emphasized. “In my opinion, there is no way around that hard fact.”