Shubert: Tolls a ‘viable’ revenue source to finance infrastructure improvement
A coalition of construction industry trade associations, the CCIA represents nearly all aspects of commercial construction in Connecticut involving building, transportation, environmental and utility work. The association particularly works closely with labor groups to advocate for greater public investment in Connecticut’s transportation infrastructure.
Shubert, 59, spent nine years before his tenure at CCIA as head of the Connecticut Road Builders Association.
An attorney, Shubert has a bachelor’s degree in business administration from Eastern Connecticut State University and a law degree from the University of Connecticut. He and his wife, Loren, live in West Hartford.
Shubert spoke to The Mirror this past week about Gov. Dannel P. Malloy’s stalled, $100 billion transportation rebuilding program, a Special Transportation Fund headed for insolvency, the sticky question of tolls on state highways, and the risk of squandering federal transportation dollars in years to come.
But since then the state still hasn’t funded the final 25 years, has reduced sales tax receipts dedicated to the first five years, and the Special Transportation Fund is projected to run in deficit this fiscal year and become insolvent by 2019-20.
How does the construction industry view all of this?
As far as the construction industry is concerned, we have always taken a very careful look at the actual delivery of the governor’s transportation proposal. Because the first five years of the plan were mostly design services, there wasn’t a lot of new construction work in the five-year ramp-up.
So in our long-range planning we hadn’t considered that [30-year commitment] would ever happen.
We’ve also watched the performance of the DOT [Connecticut Department of Transportation] more than the governor’s actual plan itself. Our focus is on how DOT can develop, design and deliver projects. And that, in our mind, is a better indicator for where Connecticut is going.
We knew, right away, that the first five years of the ramp-up plan would mean very little in terms of construction, delivering projects and actually making a difference in Connecticut’s transportation infrastructure.
Do you see Connecticut moving toward this 30-year vision in the coming years, staying stagnant, or even losing ground?
In order to understand the 30-year vision, the one thing you really need to focus on is 60 percent of that [funding] is needed just to maintain the current level of services, maintenance and operations. And the amount that’s needed for that — just keeping things in a state of good repair — over the next 30 years, is double the level we are spending on that now.
When you think you need to double the current program over the next 30 years, just to stay where you are with transportation, you first have to ask yourself, have we even done that yet? And the answer is no.
We haven’t seen any indication that there is any leadership willing to make the decisions that they need to make to do that.
Do most transportation advocates understand that over the next 15 years Connecticut is grappling with another enormous expense — unfunded retirement benefit obligations — that is expected to consume even more resources than the governor wants to commit to transportation?
Most transportation advocates see the Special Transportation Fund is in jeopardy because of the larger problems with the General Fund.
And for years the Special Transportation Fund paid for itself. But we’re at a situation now where the revenues directed to transportation aren’t enough. … It’s going to take some General Fund revenue in order to sustain the Special Transportation Fund over the next couple of years.
For the longest time, state government would take money away from transportation and the program still would sustain itself.
Part of the argument with the federal government, when they were doing General Fund transfers to pay for transportation, when they were struggling with the Highway Trust Fund in Washington, was that it was time to pay the Highway Trust Fund back.
Maybe in Connecticut we need to start thinking it’s time to pay the Special Transportation Fund back for all of the revenues that were diverted over the years.
Let’s start talking about tolls, but first outside of the context of the state budget.
What do you think of tolls among the various options states have to raise money for transportation infrastructure?
When you look at the transportation needs in Connecticut — well, let’s look at two.
We have the Mixmaster at Routes 8 and 84 in Waterbury and we have the Aetna viaduct (elevated portion of I-84) in Hartford.
Both of those are $18 billion or $20 billion projects, each. … You can’t raise the gas tax enough to pay for one of those projects.
You mean the state’s share of those projects, after federal funding is applied?
And you can’t cut down your core [maintenance] program in Connecticut, because there are so many other needs: deficient roads, bridges, buses, rail lines. We need to continue to address all sectors of transportation.
You can’t stop that core investment to go spend five years of that money fixing Route 8. And you can’t stop that core investment to go spend five or 10 years fixing the Aetna viaduct.
Is this because we are getting near the end of the useable life of much of our aging transportation system in the Northeast?
What you need is a new revenue source altogether, and tolls could possibly generate $900 million a year, which is the type of revenue source you would need to accomplish some of these projects.
How realistic are we being about tolls? How soon could we get them up and running, assuming we aren’t talking about just one or two border tolls, but rather a more comprehensive network?
Connecticut could probably have a toll system on I-84 in Hartford and the Mixmaster in Waterbury in three to four years. I-95 would be a little more complicated and probably take five to six years.
Some argue that Connecticut needs to look at tolls because of increased vehicle efficiency and the corresponding weakening of gasoline tax receipts. Others say most other states have installed tolls, and we need to do so to be competitive, especially if we have a constitutional “lockbox” amendment. Are those arguments valid?
A toll is a true user fee. And everybody using the system is going to pay to use the system, and that includes the through traffic, the out-of-state travelers.
And when you talk about the transportation lockbox, the (federal) restrictions on the use of toll revenue is almost better. It almost guarantees that that toll revenue is going to go into the infrastructure, it is not going to be diverted to General Fund items.
When you look at transportation, the state needs a new revenue source, either an astronomical increase in the gas tax, or some new revenue source, and tolls are a very viable option.
Now that we’re talking tolls and lockboxes, do you really believe the days of raiding the Special Transportation Fund are over at the Capitol?
Yes. Those types of sweeps needed to stop. If the price of gasoline goes up to $4 a gallon and the gross receipts tax — [the Petroleum Products Gross Receipts Tax is a levy on wholesale gasoline and other fuel transactions] — and it generates a tremendous amount of revenue, the lockbox is going to ensure it is not diverted for other things.
Connecticut has more than $3.5 billion in transportation bonding approved by the State Bond Commission that it still hasn’t issued and put into projects.
We know the Special Transportation Fund can’t afford to make additional debt payments. And the DOT basically has the same size workforce now that it did in 2010, when a state study concluded it didn’t have enough staff or resources to complete enough projects on time and under budget.
Are we risking losing federal transportation funding in the coming years?
It’s still a tremendous concern for the construction industry and I think for every traveler in Connecticut. I think ConnDOT’s ability to develop and design projects has not been what it should be for years. We’re well aware of that.
We think that the department has to move to a position where it is not just finding ways to spend available federal dollars, it is maximizing those investments and spending that money as effectively as possible to ensure Connecticut has the transportation system it needs in the future.
One example of that is $80 million of federal earmarks that became available recently … to be reprogrammed, and a majority of them were reprogrammed into bike paths when they could have fixed as many as 20 bridges in Connecticut.
They told states that they weren’t required to spend a certain amount of money on bike paths any more and that they could use it more effectively.
But Connecticut is doing just the opposite because we have nothing ready to go. … This inability to develop and design projects is really affecting our ability to maximize every federal dollar, not just spend it.
A shortfall in state funding could very quickly jeopardize our ability to obtain federal matching funds, which is typically an 80-20 match. That would be an even larger loss to the state.
One of the things the legislature has to consider very carefully are the implications of some of the budget options that are on the table in regards to Connecticut’s ability to capture all available federal funding.
This interview has been edited for length and clarity.
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