Greenwich lawmaker launches 2019 debate on tolls
The 2019 debate over tolls began this week with a legislator from Connecticut’s southwestern corner — home to some of the state’s most congested highways and rail lines.
Sen. Alex Bergstein, a freshman Democrat from Greenwich who favors tolls on all vehicles, also wants to employ a financing approach that could leverage huge private investment and dramatically accelerate the rebuild of Connecticut’s aging, overcrowded transportation system.
“I’d be happy to resolve the tolling issue this year, not just to extend the conversation,” Bergstein told the CT Mirror. “We don’t have the luxury of waiting any longer. To drive economic growth in this state, we need to make it business friendly, and this is what the business community tells us it needs.”
Deficient and “severely congested roads” cost Connecticut drivers $5.1 billion annually, the state’s Transportation Finance Panel reported in March 2016. This includes $1.6 billion in additional vehicle operating costs, and $3.5 billion in lost productivity tied to congestion-related delays.
An analysis issued late last year by the state Department of Transportation estimated electronic tolling on all major highways could raise as much as $950 million annually by 2023 and cost about $370 million to install. But officials also have said the annual revenue could vary somewhat depending upon the level of discounts legislators want to offer to Connecticut residents and businesses.
DOT officials also have said, depending on how tolls are structured, out-of-state motorists would provide slightly more than 40 percent of the revenue.
But Bergstein, who is vice chairwoman of the legislature’s Transportation Committee, said legislators should consider another cost-sharing option that also could speed up the long-overdue rebuild of the transportation system: Securitization.
Connecticut could wait the estimated four years it would take to install toll gantries and get the system fully up and running. Or, if tolls are approved this year, it could market that potential $950 million-per-year toll revenue stream now.
In the past, securitization often involved a state offering a future revenue stream — say, 10 years of receipts from a particular fee — in exchange for a one-time, upfront payment that’s less than the pledged revenue stream over time.
It’s like when a lottery winner forfeits a bigger prize paid over 10 years to get a smaller, lump-sum award right away.
But what if Connecticut offers that toll revenue stream to private investors who also want a modern transportation system?
Rather than getting 40 or 50 cents up front for every $1 of future toll revenue pledged, Bergstein said, Connecticut could leverage more money up front than it commits down the road.
How much? Possibly $7 to $9 of private-sector money for every $1 the state pledges, she said.
“It is about unlocking this enormous pot of private-sector money that we are not accessing now,” she said.
Toll securitization involving public-private partnerships began to crop up in the U.S. in the mid-2000s.
Chicago leased the Chicago Skyway toll bridge for 99 years to a private investment group for $1.83 billion in 2005, according to an analysis of toll securitization by GlobalCapital.com.
One year later, Indiana approved a 75-year lease of the Indiana Toll Road for $3.85 billion.
The trade-off for these deals, though, is that private investors want a return on their investment. If the numbers aren’t crunched properly, toll costs can escalate.
The Indiana deal became a source of controversy after the Toll Road amassed $5.8 billion in debt within eight years.
Bergstein said any public-private partnership hinges on sound data and proper planning, but that should not stop Connecticut from looking toward the private sector.
“It’s really not that complex when we put it into consumer terms,” she said. “It’s the same thing as getting a loan from the bank when you have equity on your house” and want to make home improvements.
But the top Republican in the Senate, Minority Leader Len Fasano of North Haven, said he believes motorists and businesses are not convinced tolls would help the business climate here.
“Maybe down in Greenwich they may not mind paying the extra money,” he said. “But for the person living on a fixed income, or someone with children and who play sports in school, getting on the highway, … going to work and coming home, every day, the costs can add up.”
Fasano also noted that many Democrats in the House and Senate are pushing to bolster the state minimum wage to $15 per hour.
What happens if businesses have to pay more for staff and for transportation?
“You can’t have this tsunami of charges hitting everyone all at once,” Fasano said, adding it could be even worse if the nation and Connecticut slip into recession in a year or two. “Maybe there’s some (economic) confidence growing in the state, but if you want to take the air out of it, then let’s do all of these things.”
Fasano also said Republicans still believe Connecticut can bolster transportation investments through their “Prioritize Progress” plan, which largely freezes state borrowing in other areas except for transportation.
Former Gov. Dannel P. Malloy and other Democrats have criticized that plan, arguing it would not allocate enough resources for major, necessary transportation projects, such as completing the rebuild of the “Mixmaster” junction of Interstate 84 and Route 8, replacing the elevated section of I-84 in Hartford, or widening Interstate 95 in the state’s southwestern corner.
The average driver in lower Fairfield County, where Bergstein hails from, spends 49 hours per year stuck in traffic, according to the Transportation Finance Panel report.
But Bergstein believes motorists and businesses, both in her district and across Connecticut, recognize the need for tolls to finance a modern transportation system.
Rep. Kerry Wood, a freshman Democrat from Rocky Hill who also is supporting tolls, said she was thrilled to hear Gov. Ned Lamont’s vision of a 30-30-30 rail system in which commuters can travel from Hartford to New Haven, then to Stamford, and then to New York City, completing each segment in 30 minutes or less.
“A modern rail system, with times like that, with wi-fi — that’s something we’re really behind the times on,” Wood said.
A commercial real estate agent who relies on rail to travel to Fairfield County and New York City, Wood added that the slow travel times and limited service are frustrating. “But sometimes you wonder if you are in a Third World County when the train catches on fire, or a bridge is out” and passengers must disembark and catch a bus.
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