On tolls, Lamont may be helping the next governor

mark pazniokas :: ctmirror.org

Gov. Ned Lamont by the I-84 viaduct in Hartford two weeks ago, flanked by budget chief Melissa McCaw and Transportation Commissioner Joseph Giulietti.

Whether he succeeds or fails, Gov. Ned Lamont’s campaign for electronic highway tolling already marks him as a rarity in U.S. politics: A newly elected official expending enormous political capital today on an idea that would yield limited benefits, if any, until he leaves office.

His proposal to require all motorists to pay tolls on the Merritt Parkway and Interstates 84, 91 and 95 could raise more than $800 million annually, but probably not before 2023, a year after the 65-year-old governor’s term ends.

“I’m going to make the next governor look really good. That’s OK,” Lamont said. “But more importantly, I’ve got to show the people of Connecticut and business leaders or folks thinking about moving to this state what our transportation system’s going to look like.”

Lamont has yet to fully articulate what that transportation system would look like, but he casts his tolls proposal as part of a larger plan to build an economy for the future, giving millennials and subsequent generations a reason to stay in Connecticut. 

“If you talk about generational investment, this is it,” said Ryan Drajewicz, the governor’s chief of staff.

Lamont’s tolls proposal will be the subject of a public hearing today. Representing the administration will be: Melissa McCaw, who oversees the state budget as secretary of policy and management; Joseph J. Giulietti, the transportation commissioner; and David Lehman, the commissioner-designate of economic and community development.

Legislators supportive of tolls say the administration needs to vividly show the state how the tolls would work, what they would cost commuters, how they would transform transportation and what that would do for economic growth.

“I think part of it is to clearly articulate what’s at stake if we don’t do it,” said Rep. Jason Rojas, D-East Hartford, the co-chair of the Finance, Revenue and Bonding Committee. “We kind of talk about it in the abstract.”

Lamont, who proposed trucks-only tolls during his campaign, reversed course two weeks ago, saying that charging only trucks could raise as little as $45 million annually and be vulnerable to legal challenges by the trucking industry.

Opponents were quick to mobilize, led by the trucking industry and a Republican legislative minority that called tolls another tax. 

“We absolutely need to invest in our infrastructure. It is imperative to return economic vitality to our state,” said Rep. Laura Devlin of Fairfield, the ranking House Republican on the Transportation Committee. “But putting another tax on the residents of the state of Connecticut is not the way to get there.”

Supporters say the administration needs to make the case that tolls represent an overdue investment in transportation improvements vital to the state’s economic health.

“If this gets framed as ‘do you want to increase your taxes,’ this thing is dead,” said Lyle Wray,  the executive director of the Capitol Region Council of Governments. “I think the opponents have been pretty effective in framing this.”

House and Senate Republicans say tolls are unnecessary if the state adopts their “Prioritize Progress” plan, which essentially would cap borrowing for local school and state university projects and halt other capital projects in favor of transportation.  Those steps would allow $1.4 billion in annual borrowing for transportation through 2029, compared to $775 million the state has averaged over the two years.

“It is a fallacy that tolls are the only way to finance transportation in the state of Connecticut,” said House Minority Leader Themis Klarides, R-Derby.

The administration counters that as much as 40 percent of tolls would be paid by out-of-state drivers, generating more cash revenue annually than the state generally borrows for transportation. With that much cash, the implication is the state could borrow less, saving on interest.

 “Borrowing the money, aka ‘Prioritize Progress,’ means 100 percent plus interest would be paid by our kids and grandkids. Every other state around us has figured this out, so can Connecticut,” said Maribel La Luz, the governor’s director of communications.

The notion of being more sensitive to future generations is finding a place in the early days of the 2020 presidential campaign. Pete Buttigieg, the young Indiana mayor exploring a run for president, talks about “intergenerational justice” — the idea that millennials are suffering from short-term thinking by older pols on climate change, economics, and other issues.

The phrase resonates with Rep. Cristin McCarthy Vahey, D-Fairfield, a mother of three who sees the tolls issue as one of many that must be viewed in terms of its impact across generations. 

“I just went to a resilience workshop in Fairfield. We are a coastal community,” she said. “We were talking about what will happen in our community 50 years from now and 100 years from now.”

Senate Minority Leader Len Fasano, R-North Haven, is opposed to Lamont’s proposal, but he concedes that politicians of both parties at the State Capitol generally recoil from issues that require a tolerance of near-term political risks to make long-term gains.

“I think a lot of stuff that happens in that building is based on two years,” Fasano said. 

Two years is the length of a legislator’s term.

Successive generations of Connecticut politicians have been remarkably inept at long-term planning, diverting gasoline taxes from transportation projects and failing to set aside money for pension obligations to teachers and state employees. The result is a special transportation fund rapidly running out of money, and one of the biggest unfunded pension liabilities in the U.S.

Gov. Dannel P. Malloy opted for two major tax increases rather than adding to the crushing pension debt. The state made its pension contributions during his two terms, but he left office as one of the least popular governors in the U.S.

In 1998, Gov. John G. Rowland used a surplus to distribute election-year rebates, rather than pay down debt or reduce the pension liability. This year, the governor has resisted using available budget reserves to balance the budget, and lawmakers have not made a move on a projected surplus for the current year.

“The reality is we need to be investing and paying off debt,” said House Speaker Joe Aresimowicz, D-Berlin.

Aresimowicz and Senate President Pro Tem Martin M. Looney, D-New Haven, said they believe tolls are necessary, giving the Democratic governor two important allies. But neither predicts easy passage.

Connecticut created the Special Transportation Fund in 1984, setting aside motor fuels as a funding source. The goal was to insulate transportation spending from the vagaries of annual budget fights.

“It didn’t happen until the bridge collapse,” Looney said, referring the failure of an I-95 bridge over the Mianus River in Greenwich. “I hope we will not wait until there is another.”

About 40 percent of the fund’s annual expenditures, or about $615 million, go to debt service on transportation projects. Another 40 percent pays for operations at the Department of Transportation. The rest goes to the DMV, employee pension costs and other expenses. 

Various fuel taxes provide half the fund’s revenues,  a quarter comes from motor vehicle receipts, fees and fines, and a fifth comes from the sales tax.

The fund is projected to become insolvent by 2024.

House Majority Leader Matt Ritter, D-Hartford, said he believes the legislature has reached a turning point: “We’re past the point where we sort of say, ‘Someone else will deal with it.’ ”

George Jepsen, who recently stepped down as attorney general,  said  he agrees.

“I think a lot of people understand in their gut we can no longer kick the can down the road, and its’s important in 2019 that tough choices are made,” said Jepsen, who also is the former  state Senate majority leader. “At least that’s my hope.”