This story was originally published on January 27, 2020.
The caller, identified as “Bob from West Hartford,” hit a nerve when he dialed into Gov. Ned Lamont’s Jan. 9 appearance on WTIC-1080 AM with morning hosts Ray Dunaway and Joe D’Ambrosio.
“Hi Governor Lamont. In the most recent [state] budget you diverted $170 million out of gas taxes in the Special Transportation Fund,” Bob said.
“That’s a myth that gets perpetrated day-in and day-out,” Lamont responded. “There is no diversion taking place, so you can put that one to rest.”
Not so fast, governor.
Although Lamont and fellow Democrats insist the diversion charge is a “myth,” the truth is their argument is really just one of semantics.
“That’s a myth that gets perpetrated day-in and day-out. There is no diversion taking place, so you can put that one to rest.”
Gov. Ned Lamont
Connecticut’s transportation program has been riddled, for more than a decade, by broken funding promises from both political parties. Between 2007 and 2019, officials pledged hundreds of millions of dollars for highways, bridges and rail lines, only to frequently snatch portions of it away at the last minute.
And for much of the same period, officials spent more than $1 billion in fuel tax receipts on non-transportation programs, despite often raising these taxes, purportedly to upgrade highways, bridges and rail lines.
More recently, however, when Lamont signed his first, two-year state budget in June, he and the Democrat-controlled legislature scaled back a previously approved increase in sales tax revenues that had been pledged to transportation.
The transportation fund’s resources didn’t shrink, but they also didn’t grow as fast as they should have. Lamont and lawmakers took back $58 million of the increase pledged for the fiscal year that began July 1, and another $113 million pledged for the 2020-21 fiscal year. Over two years that’s the $170 million “Bob from West Hartford” was taking about.
“The historical lack of funding and support for the Special Transportation Fund is exactly the reason why Governor Lamont has made the issue of infrastructure investment over the past year one of his top priorities,” the governor’s communications director, Max Reiss, said. “It has long been mismanaged since its inception and with the passage of CT2030 [Lamont’s transportation plan,] that practice will finally come to an end.”
The governor’s initiative not only would toll large trucks but also would take advantage of low-interest federal financing and even would restore the accelerated transfer sales tax receipts to the transportation fund — after 2022.
But transportation advocates note that, if you follow Connecticut’s history, a lot can happen between the time transportation funding is approved and when the resources are actually delivered to the program.
That’s because governors and legislatures have approved and then walked back plans to step up transportation funding 10 times since 2007.
The result: a whopping $650 million has been shaved off original transfers pledged to the transportation fund between 2007 and today.
Click here to see the public acts that reduced pledged transfers to transportation.
Malloy’s re-election maneuver cost transportation $91 M
Perhaps the most elaborate maneuver to siphon revenues from transportation came in 2013 and 2014 as then-Gov. Dannel P. Malloy campaigned for re-election.
Having blasted his predecessor, Gov. M. Jodi Rell, four years earlier for spending big fuel tax receipts outside of transportation, Malloy vowed to end the practice. But once in office, having inherited a mammoth-sized budget deficit, Malloy found it wasn’t easy to keep the promise.
With the problem still unsolved as his first, four-year term neared its conclusion and the election looming, the governor and legislators tried to create the appearance that the job was done.
Malloy signed a budget in the spring of 2013 that ripped the last $158 million of fuel tax receipts from the General Fund and sent it to the Special Transportation Fund. At first glance, that appeared to be good news for highways, bridges and rail lines and for Malloy, who could now say all the gas tax money was now being spent on transportation.
But that also would have left the General Fund in the red. So Malloy and lawmakers canceled a previously ordered $173 million transfer of other General Fund resources to transportation — and created a one-time $77 million transfer from transportation to the General Fund.
Once all these maneuvers were calculated, the General Fund had gained $91.3 million and the transportation fund was out the same amount.
Fuel tax hikes of mid-2000s billed as a tool to rebuild transportation
Between 2006 and 2014, legislators and governors — including Rell, a Republican, and Malloy, a Democrat — spent $1.2 billion in fuel tax receipts outside of transportation in the General Fund. That’s an average of $145 million per year.
Defenders of this practice said this also wasn’t a raid since the funds came from a wholesale fuel tax that wasn’t dedicated exclusively to transportation until 2015.
But that tax didn’t become flush with cash — more than $350 million per year in 2008 — until legislators ordered three consecutive rate hikes for July of 2005, 2006 and 2007. And those tax hikes, which helped drive retail gasoline prices here above $4.30 per gallon by mid-2008, were pitched as the linchpin of a major transportation rebuild that never fully materialized.
“It absolutely breaks the public trust and just underscores why people don’t trust us on the toll issue.”
Senate Minority Leader Len Fasano
This huge expenditure of fuel taxes outside of transportation, coupled with the back-and-forth pledges of other resources, have taken a heavy toll on the transportation infrastructure program.
Connecticut borrows roughly $800 million annually to finance infrastructure work by selling bonds on Wall Street.
But according to state Treasurer Shawn Wooden’s last monthly debt report, Connecticut has nearly $4.2 billion in transportation financing approved by both the legislature and the State Bond Commission that still has not been issued.
In other words, the money hasn’t actually been borrowed, or spent, to upgrade highways, bridges and rail lines.
More importantly, that’s nearly double the $2.2 billion backlog of one decade ago.
And it’s not the treasurer’s fault.
Connecticut won’t issue the bonds if the Department of Transportation isn’t ready to start the work. And the department can’t start the work if resources pledged to the Special Transportation Fund to make the debt payments on those bonds aren’t delivered.
“Nobody can really account for that opportunity we lost, not even the DOT,” said Don Shubert, president of the Connecticut Construction Industry Association and an advocate of Lamont’s proposal to toll large trucks. “All of this uncertainty has just eliminated any kind of effective long-range planning” to rebuild the state’s aging, overcrowded transportation network.
Former MetroHartford Alliance President Oz Griebel chaired the former state Transportation Strategy Board which recommended tolls nearly two decades ago.
Without a reliable, dedicated revenue source that isn’t subject to starts and stops, Griebel said, transportation work can’t proceed and the economy can’t grow.
“It wasn’t just about roads or trains or rail,” he said. “It was about moving commerce more effectively.”
Toll foes: Taxpayers’ mistrust stems from flip-flops on transportation
Senate Minority Leader Len Fasano, R-North Haven, an opponent of tolls, says this history “absolutely breaks the public trust and just underscores why people don’t trust us on the toll issue.”
And given that the last whittling-down of pledged resources for transportation was proposed and approved by Lamont, Fasano added, shows “this governor fails to comprehend the trust factor. He defied the people’s trust.”
Patrick Sasser, founder and spokesman for No Tolls CT, said taxpayers may not know every legal maneuver involving fuel taxes and the Special Transportation Fund, but they have noticed aging highways, bridges and rail lines being ignored despite paying some of the highest fuel prices in the nation.
“They know the money they paid in taxes and fees is not going to fix their roads and highways,” he said. “I notice it in the responses from the public on social media.”
But Lamont wrote in a statement Friday that his truck-tolling proposal is part of a larger initiative to give transportation the dedicated revenue source it has lacked for too long.
“The Special Transportation Fund has been supported by revenues that have been, and will continue to be, insufficient over the past decade and beyond,” he said. “If we don’t take action, this is a trend we know will continue in the future.”
“It’s certainly better to not make promises if we’re not sure the money will be there to cover those promises. It’s time to come up with a standard source of revenue that always goes into transportation.”
Sen. Cathy Osten
Sen. Cathy Osten, D-Sprague, who co-chairs the legislature’s budget-writing Appropriations Committee, said transportation is not the only priority that has suffered over the past decade-and-a-half as Connecticut has grappled with massive pension debt.
Municipal aid and social services also have seen pledges of increased funding fail to materialize, said Osten, who is open to tolls on large trucks.
“It’s certainly better to not make promises if we’re not sure the money will be there to cover those promises,” she said, adding that the debate about tolls is about more than transportation. “This is a reality check. It’s about honest budgeting. It’s time to come up with a standard source of revenue that always goes into transportation.”