Gov. Ned Lamont used his first budget Wednesday to lay the groundwork for the restoration of tolls to Connecticut highways.
Administration officials stressed they are just beginning a conversation with lawmakers about tolls. But the budget proposal also would cancel a crucial transfer of sales tax receipts to the Special Transportation Fund — a move the governor’s budget director acknowledged would create big problems for the transportation program absent another replacement source of revenue.
“As my co-equal branch of government, I am open to a real discussion with you, as well as Connecticut’s residents, about the state of our transportation system and what will be needed going forward – not only to make repairs, but to truly put Connecticut on the path to speedier transportation options,” Lamont told legislators in his budget address. “If the situation weren’t as dire as it is, we wouldn’t be having this conversation.”
Lamont’s budget presentation includes projections that tolling trucks only — the option he supported on the campaign trail last fall — would raise between $45 million and $200 million per year. That falls hundreds of millions of dollars short of the funding transportation advocates and former Gov. Dannel P. Malloy insist are necessary both to maintain and upgrade the state’s aging, overcrowded infrastructure.
The second option Lamont offered — the one he says would most likely enable Connecticut to position itself for future economic growth — is to toll all vehicles. This would raise a projected $800 million per year.
Both projections assume toll revenues would not be available before 2023.
“Speeding up our rail service from Hartford to New Haven, to Stamford and New York City, with more frequent service to Waterbury and New London, with easier access to Bradley Airport and an upgraded Tweed Airport, … these transportation upgrades are the building blocks of our economic future,” Lamont said. “But we must start now.”
Chris McClure, spokesman for the governor’s budget office, said the administration would ask legislative leaders to raise a “placeholder” bill on tolls. This refers to an empty bill that legislators and the administration later could revise with details, such as the parameters of a tolling program, or the composition of a new state authority empowered to make such decisions.
And even though Lamont’s budget doesn’t focus on a single option for tolling, the governor’s budget includes other recommendations that pave a path toward a broader tolling system.
Lamont recommended a “debt diet” plan that dramatically restricts general obligation bonding over the next two fiscal years. G.O. bonding, which is repaid with resources from the budget’s General Fund, is the principal tool used to finance municipal school construction and capital projects at state colleges and universities.
But in 2017, legislators dedicated a portion of that credit card, up to $250 million in G.O. bonding per year, that could be used to complement regular transportation borrowing. Connecticut regularly borrows $750 million to $800 million per year which is repays using fuel tax receipts from the budget’s Special Transportation Fund (STF).
Lamont’s budget takes that G.O. bonding option away from the transportation program.
It also would cancel previously approved transfers of sales tax receipts to the STF, about $91 million next fiscal year and $176 million in 2020-21.
“The governor’s proposed cap on transportation bonding will curtail programmed projects and exacerbate the deteriorating condition of our transportation systems,” said Donald Shubert, president of the Connecticut Construction Industry Association, who also praised Lamont for recommending tolls. “It will shut down projects that will address congestion and safety. The (existing) program was not keeping pace with Connecticut’s transportation needs.”
But Office of Policy and Management Secretary Melissa McCaw, Lamont’s budget director, said the administration also had to avert a $3 billion-plus projected deficit in state finances over the next two fiscal years combined.
“The (budget’s) goal is to provide stability,” McCaw said. “The goal is to provide confidence.” But she added this cannot happen if Connecticut does not create opportunities for business expansion and economic growth.”
McCaw also said the governor remains opposed to increasing Connecticut’s fuel taxes. Gasoline is taxed twice, both at the wholesale and retail level.
And while the governor is beginning a dialogue, not mandating a solution, when it comes to tolls and transportation, legislators should not have any illusions about the process.
“Folks there are no easy choices,” McCaw said. “There is pain throughout” the budget.