Traffic jams are common on I-95, but Democrats and Republicans in the General Assembly haven’t been able to agree on a plan to address Connecticut’s aging and outdated transportation system. CT DOT
Traffic jams are common on I-95, but Democrats and Republicans in the General Assembly haven’t been able to agree on a plan to address Connecticut’s aging and outdated transportation system. CT DOT

As Connecticut’s transportation debate heads into a new stretch, Democrats and Republicans aren’t acknowledging that their plans share two common weaknesses — economic risk and a lean rebuilding program.

Gov. Ned Lamont and Democratic legislative leaders recently criticized the Senate GOP plan — which avoids tolls and drains 60% of the state budget reserves — for leaving Connecticut dangerously vulnerable. Those funds likely couldn’t be replenished before late 2024 — or long after that if another recession hits first.

Democrats, meanwhile, have crafted a plan to pump $20 billion into transportation over the next decade — in part by tolling trucks, but not cars. But that plan also hinges on Connecticut’s economy remaining rosy until late 2024.

If a downturn comes a few years earlier, the Democratic investment slips to $19.4 billion, just 8% percent more than Republicans proposed without using tolls.

“The Democrats, on one hand, claim we need to prepare for the coming recession, yet their very transportation plan ignores that recession,” said Deputy House Minority Leader Vincent J. Candelora, R-North Branford.

Senate Minority Leader Len Fasano, R-North Branford, said the Democratic double-standard is unfair, but is designed to mask a larger problem.

“The Democrats, on one hand, claim we need to prepare for the coming recession, yet their very transportation plan ignores that recession.”

Deputy House Minority Leader Vincent J. Candelora

When Connecticut’s economy slips, Fasano charged, Democrats will broaden their trucks-only tolling program.

“Their solution, their inescapable conclusion, is to toll cars,” he said.

Fasano, whose caucus crafted the GOP transportation plan, wants to avoid tolls entirely. 

Republicans instead would take $1.5 billion of the current $2.5 billion reserve and use it to pay down pension debt. This, in turn, would lessen required pension contributions, and those savings could be funneled into the transportation program.

On paper, the reserve could regain all those funds by late 2024. But state analysts’ projections are based on relatively short-term trends, and are conditional upon the economy not slipping into recession.

Lamont and other Democrats noted the last recession ended more than a decade ago, and based on history, the next downturn is closer than the next boom.

Senate Minority Leader Len Fasano, R-North Haven (center) and Deputy House Minority Leader Vicnent J. Candelora, R-North Branford. On right is Sen. Tony Hwang, R-Fairfield.

Also, a $1 billion reserve — which represents roughly 5% of annual operating expenses — is relatively modest for Connecticut, 

When the last recession ended in 2009, annual tax receipts were $1.6 billion less than they were two years earlier, just before the downturn began.

State comptrollers long have recommended a reserve of at least 15%. Connecticut has 13% now and is projected to hit the limit by mid-2021.

Without enough reserves, Democrats say, Connecticut residents face higher taxes and deep program cuts when the economy slips. And with the GOP plan, that could happen before the reserves could be restored five years from now.

“Why are they picking truck drivers over our middle class?” House Speaker Joe Aresimowicz, D-Berlin, said of the GOP’s opposition to truck tolls during a press conference last week.

“Why are they picking truck drivers over our middle class?”

House Speaker Joe Aresimowicz

“The latest Republican proposal puts the state at immense risk by raiding the Rainy Day Fund,” Max Reiss, the governor’s communications director, said Tuesday. “Instead of protecting the state from a potential economic down turn, the Republicans would rather put it at risk.”

Fasano counters that if a recession were to hit a year or two from now, legislators and the governor would face hard choices — but the transportation program would be secure. Officials instead would be forced to cut spending in non-transportation programs.

“Our economic risk can be managed,” he said. 

Democrats counter it would be more like budgetary devastation than risk management.

“I’ve seen it before,” Aresimowicz said. “When that recession comes, and there’s no money in the rainy day account, we will cut education, we will cut nonprofits.”

Lamont, who spoke Tuesday to the Connecticut Conference of Municipalities, said having depleted reserves going into a recession is a recipe for gutted state aid to cities and towns.

“I’ve seen it before. When that recession comes, and there’s no money in the rainy day account, we will cut education, we will cut nonprofits.”

Joe Aresimowicz

“If you loot the rainy day and you have a recession, that would really be hitting property taxes,” the governor said.

But Democrats aren’t exactly free of risk themselves.

When they first announced some details of the plan they’re developing, they highlighted tapping surplus dollars only after the rainy day fund reaches it legal limit of 15% of operating expenses — about $3 billion — in late 2021.

But what they didn’t say last week was that to maximize their plan, there must be budget surpluses ranging between $321 million and $467 million every year from 2021 through 2024.

Gov. Ned Lamont announced his CT2030 transportation plan last month at reSET Social Enterprise Trust in Hartford. The plan was not embraced by either Democratic or Republican leaders in the General Assembly.

Still, even if the economy slips, Democrats insist they won’t toll cars.

Aresimowicz and Looney even said they’d consider amending the state Constitution to prohibit future lawmakers from succumbing to the temptation.

Lamont said the transportation rebuild would have to be scaled back if the budget surpluses don’t last. His administration’s projections show $19.4 billion still could be spent over the next decade, even if surpluses aren’t available after 2021.

“We’d have to downsize,” Lamont said. “Nineteen billion is still a lot more than we were spending before.”

“If you loot the rainy day and you have a recession, that would really be hitting property taxes.”

Gov. Ned Lamont

But is the Democratic proposal — once it’s stripped of economic good fortune — that much better than the Republicans’?

Transportation officials say about $15.6 billion is needed over the next decade just to keep infrastructure in good shape. Any strategic improvements — widening highways, adding rail cars, redesigning interchanges — would cost more.

The GOP plan would go only $2.4 billion, or $218 million per per year, past that. The latest Democratic plan tops that benchmark by $3.8 billion, or $345 million per year.

And both fall well short of the $21 billion plan Lamont proposed in early November — a plan he called modest, yet still required the tolling of cars and trucks near 14 aging bridges.

University of Connecticut economist Fred Carstensen, who heads the Connecticut Center for Economic Analysis, said any official — Democrat or Republican — who’s counting on five more years of prosperity isn’t being realistic.

“You’re totally detached from reality,” he said. “You’re living in an alternative universe.”

“You’re totally detached from reality. You’re living in an alternative universe.”

Fred Carstensen

A national poll released in late November by CNBC found two-thirds of Americans surveyed believe the U.S. economy will enter another recession within the next year.

Connecticut’s economy shrank for 10 consecutive years from 2008 through 2017, he said. That weak foundation, along with surging corporate debt and declining interest rates, all are warning signs that a sharp downturn could be less than two years away.

An equally dangerous, but less known, problem is that Connecticut’s income and sales tax receipts — when measured as a share of household income — have steadily shrunk since 2013, Carstensen said.

In other words, even as households earn more, they aren’t confident it will last and aren’t spending their money.

“We’re not in a normal world,” he said.

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Keith M. PhaneufState Budget Reporter

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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6 Comments

  1. Speaker Aresimowicz has worked in a key role for the AFSCME (American Federation of State, County and Municipal Employee) Union for over “20” years. Do you really believe he represents the interests of the average taxpayer, over his union employer? If so, reply to me and I will cut you a deal on the Brooklyn Bridge.

  2. As stated above, both plans are flawed. But what is clear is Lamonts desire to get any kind of tolling going so a switch to car toll can be made regardless of how the numbers are up today.
    Left unsaid in the article is whether the courts ultimately green light truck tolling at all.
    No trust, no TOLLS!

  3. This state doesn’t have a revenue problem…it has a SPENDING problem – non-producing consumers (including state employees and teachers) get the lion’s share and contribute little or nothing. The problem is shared by all of us who don’t get out the vote to get rid of these thieves.

  4. I don’t agree with the rainy fund being tapped for transportation funds as these funds are there for a reason- an economic downturn. Its coming at some point.

    That said, the Speaker defending the rainy day fund from being raided is quite rich. Isn’t he the same speaker that voted on budgets in which funds were diverted/raided from the transportation fund? You know, the fund that Democrats like the Speaker claim is habitually underfunded in part because of said raiding of funds?

    Lets also see what happens to the rainy day fund under Democrat control when the next biennial budget is another $2B+ in the hole, as it surely will be.

    You can’t make this stuff up.

  5. CT’s decade long stagnant economy needs send signals to the larger business community to encourage investment creating new jobs. Reducing CT taxation/spending sends a far stronger signal to the business community than spending $20 billions or so on major new transportation projects that ultimately need be repaid. It’s not that there aren’t major transportation concerns. Only that there are far more important issues to address to encourage new investment. Reducing taxation/spending ranks high on that list.

  6. The public employee pay rates and associated benefits are out of control. Was looking at the Simsbury website the other night. Job opening for “entry level” police officer. Pay ranges from $61K to 91K. Entry level? An administrative assistant for the Assessor’s office is pegged at above $40K. Neither required a college degree. The benefits are better than any private industry employer. It used to be the rich benefits were given in lieu of low pay. That mantra is obviously expired. Forget college kids, get a job at the public trough…

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