Gov. Ned Lamont and Democratic legislative leaders united Tuesday behind a transportation financing concept that would rely on trucks-only tolls, a breakthrough for a governor whose own party had repeatedly frustrated his major first-year objective of modernizing Connecticut’s aging highways and commuter rail system.
Senate Democratic leaders, who had summarily dismissed Lamont’s two earlier proposals for tolls on all motor vehicles as politically unpalatable and rejected his characterization of transportation infrastructure as a crisis, endorsed the new approach and insisted it should be refined and passed in special session, most likely in January.
“It is absolutely essential that we get this done,” said Senate President Pro Tem Martin M. Looney, D-New Haven. “There is a real crisis in our state that we cannot just delay any longer in terms of the needed reconstruction of our roads and bridges. We need to get this done now. We don’t want the issue to drag into the 2020 session. We think we have momentum on that issue, and the time to move is now.”
With the Democratic governor and leaders of the Democratic legislative majorities agreeing on a transportation financing approach for the first time since Lamont made his initial proposal in February, their challenge is to fully develop what is now a detailed outline and convince their caucuses it is financially sound and politically defensible.
Lamont and the legislators spoke to reporters after a meeting at the Executive Residence that marked the end of the administration’s efforts to find a bipartisan approach to financing CT2030, the governor’s $21 billion list of transportation projects that he says can remake commuting life and spark economic growth over the next 10 years.
“This plan works, and the numbers add up,” Lamont said.
Rhode Island implemented the nation’s first trucks-only tolls last year, drawing a legal challenge from the trucking industry that is pending. Lamont proposed trucks-only tolls during the 2018 campaign, only to push for a broader plan once elected.
House Democrats resurrected the idea after the Senate balked at automobile tolls.
“I think that the House has really shown us the way by coming out with the truck-only plan, which is in effect a return to a version of what the governor had proposed in the election last year and is in fact the only plan that is voter approved, given the virtue of the fact he was elected running on that proposal,” Looney said.
Taking turns standing before a fireplace in a formal living room at the governor’s residence, the legislative leaders quickly delivered a preview of how the plan will be promoted by Democrats and panned by Republicans in special session and during the 2020 campaign for control of the General Assembly.
House Minority Leader Themis Klarides, R-Derby, who has been arguing that truck tolls would impact consumers by making goods more expensive, said the GOP was unsure if Lamont was correct in saying “the numbers add up.”
Senate Minority Leader Len Fasano, R-North Haven, whose caucus offered an alternative to tolls that would have required spending $1.5 billion of the $2.5 billion budget reserves, said no one believes that state government can be trusted to stick with truck-only tolls.
“The confidence it’s going to remain a truck toll is very low,” Fasano said.
Democrats say they would be open to any legislative language, including a constitutional amendment, clarifying that automobile tolls are off the table in Connecticut.
House Speaker Joe Aresimowicz, D-Berlin, said Republicans are stoking fears about what could come next, rather than debate what Democrats are actually proposing.
He warned the GOP alternative would leave Connecticut without the financial cushion to weather a recession, jeopardizing residents who rely on state services and potentially exposing them to tax increases.
“My question to them is why are they picking truck drivers over our middle class?” Aresimowicz said.
Each side accused the other of intransigence, and the exchange continued in an exchange of emailed statements.
“The comments made by legislative Democrats and Gov. Lamont following today’s meeting were nothing but political talking points defending their insatiable desire to tax people more,” Fasano said. “They want tolls, they want to borrow more, they want more tax revenue from Connecticut residents – on top of their new taxes on plastic bags and groceries. They do not want to work with Republicans to do what is truly best for our state and its residents. They want tolls. Period.”
The Lamont administration responded in kind.
“Senator Fasano must be talking about a completely different meeting and a totally different plan,” said Max Reiss, the governor’s communications director. “Today, Governor Lamont asked legislative leaders from both sides of the aisle to come together and discuss for nearly two hours how to grow the state’s economy and fix its broken transportation system. For the last several months, the governor’s administration has invested considerably in collaboratively working towards a bipartisan solution – one that included Senator Fasano.”
With some creative financing, the Democrats say they could come within $1 billion of the $21 billion spending goal of CT2030, even though truck tolls would produce an estimated $180 million, slightly more than half the $320 million projected in the plan Lamont released on Nov. 7. Lamont needs a dedicated revenue stream to obtain low-cost federal financing.
That tolling revenue gap is significant. Democrats did not disclose all the details for making up the difference, but they highlighted two solutions.
Low-interest federal loans the state is seeking for bridge and rail improvements would be financed over 35 years, rather than the 27 years anticipated in Lamont’s earlier plan. According to the administration, this would save an average of about $16.3 million per year in debt costs between 2020 and 2030, a total of about $180 million.
Another element is a more modest version of the GOP alternative: Using some of the budget reserves to pay down pension debt, which would lessen the annual contributions now required. Lamont and Democratic legislators would tap between $250 million and $260 million earmarked for the budget reserves after Sept. 30, 2021.
By then, according to projections by the administration and the legislature’s non-partisan Office of Fiscal Analysis, the reserves will exceed the statutory limit of 15% of operating costs, or about $3 billion. Once that threshold is crossed, excess reserves automatically are used to pay down pension debt.
The GOP option would have transferred $1.5 billion from the rainy day fund into the pension fund immediately, allowing the state to reduce annual pension contributions by almost $130 million per year through 2030 and put those dollars into transportation.