We needed highway tolls before, and we need them again

How did we get here?

Recognizing that “transportation is the backbone of our economy,” Gov. Dannel Malloy in 2014 undertook a transportation initiative called Transform Connecticut intended to produce a strategic plan to improve the state’s transportation system so as to promote economic growth. After analyzing the existing system and obtaining input from numerous concerned citizens and groups around the state, the Connecticut Department of Transportation released a report called LET’S GO CT that Governor Malloy presented to the Legislature in February 2015.

LET’S GO CT presented a bold plan for improving each of the state’s multi-modal transportation systems—highways and bridges, rail and bus, air and water. In total, the itemized improvements were estimated to cost a staggering $100 billion over the next 30 years. Of that sum, two-thirds, or $66 billion, was to be spent simply to maintain the existing system, while the remaining $34 billion would be used to expand the capacity of each system to accommodate future growth in population, commerce and traffic volumes.

Next, the governor appointed a panel of legislative and business leaders to recommend strategies for funding the transportation improvements included in LET’S GO CT. The Finance Panel reported their findings in January, 2016. They included recommendations for new sources of revenue the panel believed would keep the state’s Special Transportation Fund (STF) solvent for at least the next 15 years. Beyond that they thought financing for the program could be better evaluated when the time came.

At the core of their revenue-raising recommendations were proposals to return the gas tax to the level of the 1990s, when it was 39 cents per gallon, and to implement electronic tolling to help pay specifically for improvements in two of the state’s major travel corridors: along the shoreline route from New York to Rhode Island, and through the center of the state from New York to Hartford. The Finance Panel also insisted that the new revenues be dedicated solely to transportation improvements, and not be used to meet the non-transportation needs of the state’s General Fund.

To this end, the panel recommended a new constitutional amendment to protect all transportation revenues.

Didn’t we have tolls before?

Tolls have been used to pay for transportation improvements in Connecticut since colonial times and the early days of nationhood, beginning with ferries in the 1630s, bridges in the 1760s, and highways in the 1790s. Tolls were seen then, as now, as the fairest way to fund any transportation project since only those individuals who use a given facility —be it ferry, bridge or highway— are made to pay for it’s construction and maintenance.

With the coming of the automobile, the state’s modern system of paved highways was funded not by the collection of highway tolls, but rather by fees paid to the Division of Motor Vehicles (DMV) to register each vehicle and license its driver (beginning in 1907) and with a tax on the gasoline used to power that vehicle (beginning in 1921).

The rapid growth of automobile ownership and miles traveled during the first decades of the century allowed the Connecticut Highway Department to convert the state’s existing network of dirt roads to a modern, paved highway network of nearly 2,500 miles using these two motor vehicle taxes alone. Up to 1923, toll revenue was still used to build many of the state’s modern highway bridges. But in that year, tolls were removed from all highway bridges in Connecticut, and from then on through the 1930s state highways and bridges were improved solely from revenue raised through DMV fees and gasoline taxes.

With the construction of the first controlled access expressways in the 1930s, the state returned to the collection of tolls to help pay for this new and expensive kind of highway. Tollbooths were first erected in the late 1930s and early 1940s on the Merritt and Wilbur Cross parkways, and again in the early 1950s to pay for the Greenwich – Killingly Expressway, also known as the Connecticut Turnpike, which was built in the years before the federal interstate system was funded.

With passage of the Interstate Highway Act of 1956, the portion of the Connecticut Turnpike from Greenwich to Waterford paid for with state funds was transferred to the federal interstate system as I-95, and the tolls were allowed to remain. Certain high-level expressway bridges, including the Baldwin Bridge over the Connecticut River and the Gold Star Memorial Bridge over the Thames River, were also built and maintained through the collection of tolls.

In the mid 1980s, as the bonds that built the Connecticut Turnpike were about to be paid in full, residents along the route lobbied the legislature to remove all tolls from I-95. A fiery accident in January of 1986, in which several persons were killed while stopped at one of the toll stations, brought the matter to a head. Toll stations were now seen as dangerous obstacles to the normal flow of traffic, and the legislature decided to remove all tollbooths not just from I-95, but also from the Merritt and Wilbur Cross parkways, and all existing toll bridges in the state as well.

The removal was done in stages, but by the end of the 1980s, Connecticut for the second time in its history had become a toll free state.

To compensate for the loss of toll revenue, the state gasoline tax increased dramatically over the next few years, from 25 cents to 39 cents per gallon. As with the current toll issue, the increase in gas taxes soon became a political football, and by the late 1990s, the state had acquiesced to public pressure, and reduced the gas tax by 14 cents a gallon, without replacing the income needed to fund the state’s ongoing transportation commitments. As a result, projects scheduled for the early 2000s were cancelled or postponed.

Commenting on the high cost of ConnDOT’s current LET’S GO CT plan, the Finance Panel noted: “if the gas tax had not been reduced, the STF would have been able to execute on hundreds of projects that are now part of Connecticut’s backlog, and the price tag for LET’S GO CT would be significantly lower.” The new tolls proposed for Connecticut highways are in a way an effort to replace the stream of gas tax revenues lost in the 1990s. Also, as the Finance Panel noted, that alone will likely not be sufficient to keep the STF solvent for the next 15 years. A gas tax increase “back to the 1990s rate of 39¢ per gallon” was also recommended.

What is the real problem?

Connecticut has been in an ongoing budget crunch since the 1970s, due largely to the increasing cost of social programs (from education to health care and welfare) that originated in the 1960s as part of Lyndon Johnson’s Great Society initiative. One tack taken by legislators to balance these budget shortfalls was to use funds dedicated to transportation improvements for non-transportation uses.

History tells us that removing tolls from Connecticut highways and bridges in the 1980s was a financial mistake, as was the lowering of the gasoline tax in the 1990s.

For example, in 1975, the existing transportation fund was dissolved, and all monies placed in the General Fund instead. Transportation projects then had to compete with social programs for funding, and many projects, and especially maintenance, were deferred as a result, leading to the Mianus River Bridge collapse of 1986. In the aftermath of that tragedy, the STF was reinstated, but as budget shortfalls continued, legislators created dubious loopholes and other financial slights of hand to continue their use of dedicated transportation funding to balance the state’s general budget.

The need to prevent such practices finally led the voters of Connecticut to approve a constitutional amendment in 2018 (as recommended by the Finance Panel) to deter such shenanigans in the future.

Gov. Ned Lamont, who has taken up the mantle of Connecticut transportation from Malloy, is expected to call Connecticut legislators into special session this summer to discuss two issues critical to the state’s overall economic health. One concerns how much additional debt to incur in order to balance the current budget shortfall. The matter of state debt and budget shortfalls is a complex issue that has resulted from decades of unsavory tactics, such as deferred pension payments, to balance ever-increasing shortfalls in the general budget. It is a complex issue that will involve difficult debate over the cutting of established social programs, and take many years and a tremendous amount of political will to resolve.

The other issue concerns whether to reinstate tolls on certain Connecticut expressways. Considered separate from the debt problem, the toll question is both simple and straightforward. History tells us that removing tolls from Connecticut highways and bridges in the 1980s was a financial mistake, as was the lowering of the gasoline tax in the 1990s.

A safe, up-to-date transportation system is a must for long-term economic growth, and tolls are the most equitable way to collect the revenue necessary to provide such a system directly from those who use it, including the large portion of travelers (in some areas as much as 40 percent) who travel into and through Connecticut but come from New York and Massachusetts. We must not take out our frustration over the state’s ongoing budget crisis on the issue of highway tolls. Funding Connecticut’s transportation future is an equally important but separate issue. We need highway tolls to provide the financing necessary to build the projects proposed in LET’S GO CT and bring transportation in the state (and the economic growth it makes possible) back up to speed.

Richard DeLuca has just completed a two-volume history of transportation developments in Connecticut from colonial times through to the administrations of Malloy and Lamont. Volume one. Post Roads & Iron Horses, was published by Wesleyan University Press in 2011. Volume two, Paved Roads & Public Money, is scheduled for publication next spring.