January 29, 2018

Lawmakers to pitch statewide road tolls

An electronic tolling gantry

Connecticut's transportation bank account continues to approach insolvency, which promises to be a major topic in the three-month legislative session that kicks off next week.

Lawmakers are certain to discuss tolls and gas taxes as potential mechanisms to shore up the Special Transportation Fund (STF), which pays for road and bridge capital projects, bus and rail, and the operations of the Department of Transportation.

House Speaker Joe Aresimowicz (D-Berlin) said in an interview last week that he has vowed to Transportation Committee co-chairman Antonio Guerrera that he will push the topic of road tolls to the forefront.

"I've already committed to Rep. Guerrera that a vote on tolls will happen this year [in the House]," Aresimowicz said.

On Monday morning, Guerrera, a longtime advocate for tolls, announced his committee would introduce a bill calling for statewide electronic tolling.

"Why would any company want to move to the state of Connecticut if they can't bring their goods and services throughout the state in a timely fashion?" Guerrera said. "I have been saying this for four years. I knew this day was going to come."

He was joined at a press conference by House Majority Leader Matt Ritter (D-Hartford).

"As the majority leader, I'll make sure we do everything we can to pass it in the House this year," Ritter said.

Should the legislature take action on tolls before November, when voters will weigh in on a transportation funding "lockbox" that is meant to shield funds from budget-balancing raids by future legislators?

"I'm not willing to wait," Aresimowicz said. "Our transportation fund will be broke."

Meantime, Rep. Jason Rojas (D-East Hartford), said this month that he intended to propose a 4 cent hike in the state's gas tax -- a key funding source for the STF.

Guerrera said he views a gas tax increase as a potential temporary measure. He hopes the state could lower the tax below current levels over time to become more competitive with other states.

Tolls and tax increases could be key issues in an election year. Gov. Dannel P. Malloy, who is not running for reelection in November, has been spurring the legislature to boost transportation revenue for several years.

In 2015, Malloy released a $100 billion, 30-year transportation blueprint called "Let's Go CT."

The governor is expected to issue his own recommendations soon for how the legislature can ensure the STF's solvency. Ritter said he expects Malloy to "go big" on his calls for transportation revenue.

This month, he ordered an indefinite halt to $4.3 billion worth of projects, amounting to 41 percent of the Department of Transportation's $10.5 billion capital plan. Delayed projects range from the replacement of the Waterbury mixmaster to a widening of Interstate 95, and even routine highway maintenance and municipal road aid.

Malloy said the projects could resume once financial sources are identified to pay for them.

After a failed attempt in 2015, lawmakers last year agreed to place a constitutional lockbox question on the ballot this November.

The project postponement followed the release of a report in December by DOT and the Office of Policy and Management, warning that if STF revenues don't increase soon, the state would have to defer or cancel projects, cut paving, maintenance and snow removal operations, hike bus and rail fares and reduce service. The DOT would also have to cut 15 percent of its staff, the report said.

"As we prepare to enter a new year, I will encourage and facilitate continued dialogue with my fellow leaders in state government to ensure that action is taken, and taken soon," Malloy said last month.

A government panel studied the STF in 2015, warning that new funding sources were needed to sustain future solvency.

The panel recommended raising the gas and sales tax, reevaluating permit fees, implementing congestion tolls on major corridors, among other ideas. (The panel's final report can be downloaded here)

Though the legislature has made some changes to reduce the burden on the STF, such as diverting a slice of sales tax revenue to the fund and removing a requirement that the fund be used to pay for a Department of Social Services transportation program, the DOT and OPM report says it won't be enough to meet immediate needs.

The STF is funded by gas and vehicle taxes, license and permit fees, federal money and a gross earnings tax on petroleum distributors.

The fund faces increasing annual debt payments, and gasoline consumption and related tax revenue, though it ticked up in 2015 and 2016, remains essentially flat over the past decade, according to state data. Diversions of money to the general fund have also hurt the STF.

Republicans say the blame for those raids, amounting to $164 million over the last four years, falls on Democrats, who have held the governor's office and majorities in both legislative chambers over that time. They also argue that increased transportation spending under Malloy is a problem.

"There's been a "spectacular increase in spending," Transportation Committee Vice Chairman Sen. Len Suzio (R-Meriden) said Tuesday.

Malloy defends his plan, arguing that two-thirds of it "is simply to bring our transportation infrastructure into a state-of-good-repair."

After Malloy announced projects would be postponed this month, Senate Republican Leader Len Fasano said Malloy's Let's Go CT plan was never affordable, alleging that the governor had purposefully worsened the STF's condition.

"Now, Gov. Malloy and Democrats are trying to use the problem they created to force the legislature to approve new taxes and more burdens on commuters," Fasano said. "That has been their game plan all along."

Republicans say Democrats have ignored their party's own transportation proposal, "Prioritize Progress," which argues that the state should roughly double its annual transportation borrowing by using some general obligation bonds for transportation projects in addition to STF bonds.

Democrats argue that wouldn't work because it would mean major cuts to other programs.

In an interview last week, Fasano said there should be a detailed study of a congestion tolling system and how much revenue it would raise. An analysis by DOT several years ago (scroll down for a report link) estimated that statewide tolling could net as much as $2.5 billion a year, though there are scenarios in which it would be lower than that, as well as situations that would require changes to federal or state law.

"I'm not against tolling," Fasano said. "I'm against tolling without knowing how much you're tolling and what you're getting from tolling."

Fasano said some voters mistakenly believe Connecticut will implement border tolls, which would mean about half of the new revenue would come from out-of-state drivers, DOT projects.

But border tolls would be unlikely to receive needed federal approvals, according to DOT. That leaves congestion tolling, a system in which out-of-state drivers would pay an estimated 25-30 percent of the new revenue.

Guerrera confirmed that he doesn't expect his committee to propose border tolls.

Another caveat: Most tolling systems could take several years or more to get up and running.

If the House Speaker has vowed a vote, will the evenly split Senate see one too?

Suzio said he perceives a "pretty good chance," particularly if legislation comes out of the House.

But he added that neither Democrats nor Republicans party seems to have a big edge on the issue. A few legislators breaking ranks could make the difference.

Editor's note: This story has been updated to include comments from Sen. Len Suzio and to clarify trends in gasoline consumption and tax revenue.


Read CT DOT's 2015 white paper on tolls

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