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.
To generate $930 million in annual revenue, there will be toll gantries littered all over the state. A lot of them. Most of us don’t mind them at the borders, maybe a couple elsewhere – but when 60% of the tolls are projected to be paid by CT residents is another $600 million plus that coming out of our family and business pockets in addition to everything else. Want an offset? Eliminate the gas tax. All of it. As for the privatization – that’s a really rotten idea. Parking meters, toll roads have all been privatized and it has not been a panacea. It’s a mess. And it lets the state bypass the infamous “lockbox.”
“It is about unlocking this enormous pot of private-sector money that we are not accessing now”
Fixed it for you:
“It is about confiscating this enormous pot of citizens money that we are not stealing now”
As usual, no discussion about cutting state expenses. CT’s economy is the same size as 2004 but state spending is 50% more than 2004. CT DOT overhead costs per mile of state highway is the highest in the country.
As the exodus of people and companies continues unabated.
And so it begins, the battle for “Tolls Gate”…”spear shall be shaken, shield shall be splintered,
a sword-day, a red day, ere the sun rises!”
Gov. Lamont and a few others keep touting the idea of collecting tolls only on out-of-state trucks. I have no doubt that they are actually hoping the lawsuit against similar tolls in RI is successful. That way, they can say “Hey,we just wanted to tax this one group but the Courts have said we have to tax ALL drivers.”
It is illegal (Interstate commerce) to treat out of state citizens differently than in state citizens.
This is (another) huge tax that will disproportionately impact CT residents making it yet more expensive to go to/from work.
Massachusetts does it……legally. And in New York, just before I-287 meets the NY Thruway, cars bear left toll-free while all trucks go right and pay tolls. So distinction be residents and vehicles is possible.
That NY toll doesn’t differentiate between in-state and out. I do not know of the MA difference so I cannot comment about that one way or the other.
Massachusetts tolls all vehicles as does New York. Left lanes are Express but still pay tolls. If you have a Massachusetts EZ Pass,you pay less than other states’ EZ Passes but you don’t need to be a resident to get a Mass EZ Pass.
https://www.masslive.com/politics/index.ssf/2018/04/out-of-state_drivers_owe_massd.html
Everyone pays.
Resolve the tolling issue? That was done decades ago when they were removed. This will help resolve the budget (actually a Democrat spending) issue is more like it, by adding new taxes on the working class who can’t afford this. Then the Democrats will spend it and they will end up finding another new tax down the road. Tolls are a regressive tax in our state and shouldn’t even be on the table.
Why does no one ever question if the State of Connecticut the DOT are extracting the maximum value and benefit for every dollar invested and spent on transportation. My recommendation…fix the waste and inefficiency, before investing one more dollar. That is the intelligent and prudent solution to our transportation woes….instead of using tolls to fund further incompetence.
By definition CT’s State government always runs to a “high standard”. Ask any elected official. As demonstrated by its inability to manage a DMV, fund pension liabilities, prepare Budgets, etc.
CT officials always avoid Prof. Search to secure Top Talent preferring “local talent”. Expecting major improvement in CT’s government is unreasonable.
Maybe CT Mirror reporters will ask why Prof. Search isn’t used to secure senior positions.
Well they aren’t. Per mile costs in CT are much higher than other states. Studies have show that. https://www.yankeeinstitute.org/2018/02/connecticuts-transportation-administrative-costs-remain-highest-in-the-nation/
Connecticut spends $99,417 per mile of road in administrative costs, according to the Reason Foundation’s annual study on state transportation spending and effectiveness.
Connecticut had the highest administrative costs in the country,
which were nine times the national average of $10,864. The
administrative cost per mile increased by 19 percent since the
Foundation’s previous study in 2016.
This number, based on a Reason Foundation report that Yankee Institute cited is incorrect. It is based on misinformation published in the Federal Highway Administration data, which the Reason Foundation cites as the source of its data. If one goes to the CT budget documents, (detailed breakdown in Governor’s budget for FY 2015 is at https://portal.ct.gov/-/media/OPM/Budget/2014_2015_Biennial_Budget/BudgetinDetail/Transportationpdf.pdf?la=en ).
The expenditures for highway administration can AT MOST be:
$28,021,970 (for Highway/Bridge Engineering, Rights of Way, and Construction Services)
$317,036 (for Highway and Bridge Research)
$19,675,243 (for Transportation Administration)
$7,774,661 (for Transportation Policy and Planning)
$36,016,080 (for Agency Management — including rail and bus)
for a grand total of $91,804,990.
In addition, assuming that all of this money went for payroll (which is not true, but most of it did), add another 65% for fringe benefits, which brings the total up to $151,478,823. which is FAR FAR SHORT OF THE $403,072,000 used by the FHWA.
Using the “state controlled highway mileage” figure cited by Reason (4,054 miles), the real number for transportation administration per state controlled highway mile is accordingly about $37,365. That still ranks CT between California and Rhode Island, but it’s not as high as the number cited by the FHWA, which was then cited by the Reason Foundation, which was then cited by the Yankee Institute.
Rep Berstein naively talks about what is known as a P3 relationship and cites the wonderful project in Indiana. Unfortunately, its a disaster there. The P3 market is not a pot of gold she represents. Indeed, in order for a private entity to have interest, they have to make money.
https://www.americanprogress.org/issues/economy/reports/2018/02/15/446720/public-private-partnerships-fail-look-southern-indianas-69-project/
Others also in the P# market are leaving it. https://www.constructiondive.com/news/skanska-quits-us-p3-market-replaces-civil-division-chief/540464/
Further, there will shortly be case law on the inequitable taxation that is the current trend by our legislatures. The taxation isn’t being based on where you live (as they say), but where you bought your toll transponder from. In other words, since government doesn’t issue or control the transponder, you can be taxed for an out of state transponder based on where you picked it up and not your address. This is against our constitution, to tax people differently, based on where they bought the device. Everyone gets taxes equally, hence these tolls are another form of taxation.
We all see these fees and taxes cropping up in every bill we have. Imagine getting your phone bill with a tax based on the fact you bought your phone from Walmart rather than AT&T.
Perhaps this answers a question I have about my EZ Pass transponder. I obtained when I was traveling through MA, NY & NJ for business years ago. It came from MA, I live in CT. I am a CT resident & suffer CT’s burdensome taxes. I will refuse to pay anything in excess of what a CT obtained transponder would charge when issued to a CT resident. If I am, I will challenge it to the extent necessary to stop it. Keep that in mind Ms Bergstein.
The purpose of tolls is to fund fat pensions and Cadillac health insurance. We already have the one of the highest gasoline taxes in the country and yet our roads and bridges are need of repair. This is because the fund has been raided. Governor Lamont stated during his campaign that there would only be tolls on incoming trucks. I would be quite surprised if he kept his campaign promise.
Tolls is primarily about raising new taxes to fund CT’s bloated State budget and protect the salaries/benefits/pensions of CT’s true entitled class – our public Unions. Not rocket science.
The Connecticut transportation conundrum is simply the result of illogical planning in order to maintain a rigged Stamford/Gold Coast advantage over the rest of the state — with regard to tax base and lifestyle… The Gold Coast wants to maintain a lucrative tax base and residential exclusivity, and thus maintains exclusive zoning regulations and directs the creation of state transportation infrastructure and business development such that “jobless” urban areas (Bridgeport, Waterbury, New Haven) are maintained as such and their workforces are kept hostage as lower-wage, commuter workforces… In this way, the Gold Coast reaps the advantages and avoids the costs (all) of having to host workforce housing/maintain a resident labor force… Now, the Gold Coast wants the rest of the state to pay to maintain its advantage (per otherwise unnecessary transportation infrastructure expansion, via tolls and state borrowing…).
Rather than maintain the SW corner bottleneck, development policy must be changed to redistribute development, jobs, housing, and tax base in CT in a way that rejuvenates urban areas while minimizing transportation needs… Making better use of the Internet and drone/air transportation and water transportation would also help… If development logic/fairness and technology are properly employed, CT tolls are unnecessary — and, indeed, if implemented will have damaging effects on Connecticut’s economic renaissance (as a state) and will only exacerbate transportation problems in the long run. Modernize and upgrade rail transportation, update highway safety, but don’t expand highways to invite even greater congestion per the serving of illogical/unfair development policy…
Golf coast advantage? We pay out more to the rest of the state than we get back.
Your not factoring in the loss of urban tax base and added value of your “captive” commuter workforce… Nor are you acknowledging the necessary cost of residential exclusivity…
Just consider that by having a captive “commuter workforce,” than a resident workforce, you are avoiding taxes for all of the municipal services and infrastructure that would be needed to maintain residential presence… You get the tax base and the tax savings the way that you have regional zoning/development policy rigged in Fairfield County…
I guess that it’s possible that some Gold Coasters aren’t even conscious of their purposefully-engineered municipal advantages…
Would you consider yourself ignorant of the bases of your municipal advantages and the cost of these advantages to cities such as Bridgeport?!
If the Gold Coast’s income, sales and property taxes were removed from Connecticut’s budget, Connecticut would rank “up there” with Alabama and Mississippi in per capital income.
Please provide supporting data for this assertion. Otherwise, it will be removed.
End the perpetual wars, repeal the Nixon drug laws that created mass incarceration and free up money for domestic investment without guaranteeing more profits to the 1/2 of 1%.
Well privatization has worked out well for prisons and schools, so sure why not try it on tolls?
You cannot toll at the border – we gave up that option in 1983. You cannot treat out-of-state drivers any differently than in-state. You cannot toll only big rigs and large vehicles.
And most importantly we will likely lose Federal highway dollars on any interstate tolled roads.
Mass Pike and NY Thruway can toll because they were tolling before the Interstate Highway System was created.
And mark my words – our ‘leaders’ will eventually tie your annual income to how much you pay in tolls. Eventually the ‘underprivileged’ will get away with paying next to nothing in tolls while the middle class foots the bill for the rest of it. That is the way this state works.
Connecticut has the 7th highest gas tax in the entire country (43.8 cents/gallon). That needs to be drastically lowered before we should even be discussing adding tolls back into our lives.
Tolls is a complex issue of costs imposed CT taxpayers and local communities versus benefits from higher toll revenues. Given CT’s far more serious problems with its seemingly perpetual State Budget Deficits and decade long failing economy it seems ingenuous to begin a discussion of tolls early in the new Governor’s term. Unless the object is to secure “notoriety”. Tolls are worth discussing. But there are far more important issues to discuss. Issues that truly define CT’s future status.
This state will continue to circle the fiscal drain if our leaders continue to double down on taxation, spending, and borrowing. At some point, this house of cards will fall and it won’t be pretty for anyone.