Bridging the Gap

Connecticut’s transportation priorities, funding

By Lesia Winiarskyj

“If everybody thinks it was tough getting here this morning,” Dana Briere told the crowd at CBIA’s Connecticut Transportation Summit in Stamford, “try to get to Greenwich from Bloomfield with an oversized machine.”

Briere, an operations manager at Garrity Asphalt Reclaiming, typically dispatches trucks weighing 110,000-140,000 pounds. Getting from his facility to a construction site in southwestern Connecticut takes longer than most people would imagine.

A lot longer.

Loads heavier than 80,000 pounds, Briere explained, are prohibited along much of the state’s highway system: including the stretch of I-95 from New Haven to Greenwich: a restriction that sends his fleets onto increasingly crowded secondary roads.

“Let me quickly tell you how I have to get here,” said Briere, describing a roundabout route that goes like this: “Route 187 in Bloomfield, to I-91 South, 291 to Manchester, then onto I-84, over the Charter Oak Bridge, down I-91 to 691, and then: if the load isn’t wider than 10 feet, due to the bridge restriction in Newtown: take I-84, then Route 7, go down Route 1, and get onto various side routes off Route 1 to my final destination.” (For loads wider than 10 feet, Briere notes, it’s even more complicated.)

Total drive time for a 90-mile trip within the country’s third smallest state?

Five hours, one way.

“I can make two trips to Massachusetts in a single shift, but to get to Greenwich I have to write off one driver for the entire day.”

Economic Roadblock

Like Garrity Asphalt, nearly every Connecticut company and commuter has a story about the state’s aging transportation infrastructure.

What are the effects on productivity? Profitability? Expansion?

Those are a few of the questions CBIA asked in the state’s first-ever business survey on transportation priorities. The report, released at the Connecticut Transportation Summit last month, showed the extent to which improved connectivity and transit options are becoming critical to Connecticut’s competitiveness and economic growth.

“While the state has made some important first steps in addressing these challenges,” says CBIA economist Pete Gioia, “it’s very clear that considerable work remains.”

Sponsored by UIL Holdings Corp., the 2013 Connecticut Transportation Survey was produced by the Connecticut Business & Industry Association, Stamford Chamber of Commerce, Connecticut Construction Industries Association, and Motor Transport Association of Connecticut.

Out of 6,000 business leaders surveyed, 651 participated in the study, for a response rate of 10.9%.

Key Findings

Key findings from the report include:

• Transportation ranks in the top three state spending priorities: behind economic development and education: in terms of businesses’ willingness to pay for them
• Road congestion is the single most pressing transportation concern for businesses (45% of survey respondents), followed by deteriorating roads/bridge conditions (28%)
• More than half of survey respondents (55%) identify highway improvements and expansion as providing the biggest transportation-related benefit to the state’s residents and businesses, followed by improving and expanding rail systems (20%)
• 88% of business leaders surveyed want operational lanes added to I-95
• 78% say Connecticut’s transportation system is somewhat or very important to their company’s ability to move goods and services; 64% believe better transportation options would increase their ability to attract and maintain a quality workforce; 54% say customers consider access and convenience when deciding whether to do business with them; and 42% say Connecticut’s overcrowded roads limit their market
• Adverse impacts of Connecticut’s congested roadways include delaying or preventing meetings with customers (63% of respondents), causing delivery logjams (48%), inhibiting access to customers (41%) or customers’ access to their business (37%), and disrupting logistics
• Nearly three-quarters of businesses surveyed (74%) would support legislation prohibiting the use of Connecticut’s Special Transportation Fund to cover General Fund shortfalls
• 83% of businesses surveyed say they absorb the costs associated with road congestion rather than pass them on to customers; 15% have considered relocating because of regional transportation concerns

“This is a wakeup call to Connecticut’s political leadership,” says Michael Riley, president of the Motor Transport Association of Connecticut. “For too long, the highways and bridges of this state have been allowed to slip into disrepair. Daily congestion now chokes the circulatory system that the business community needs for the safe, efficient movement of goods and people. It’s time to stop postponing expansions and improvements and get this state moving again.”

‘Not Just a Stamford Problem’

From calls to widen I-95 to proposals for expanding the state’s mass transit system or the load-carrying capacity of its bridges, shifting freight capacity to rail and ports, or providing tax incentives for telecommuting, there’s no shortage of ideas aimed at fixing Connecticut’s overwhelmed transportation infrastructure.

“It’s not just a Stamford problem or an I-84 problem,” says Mario Smith, president of Waters Construction Co. and past chair of the Connecticut Construction Industries Association. “Loss of productivity affects everybody using these corridors to travel personally or transport goods.”

But given multiple pinch points and limited state resources, which projects should take priority?

“What the state has needed for some time now,” says Speaker of the House Brendan Sharkey (D-Hamden), “is a comprehensive transportation strategy,” which, he adds, requires broad consensus not only among lawmakers but all stakeholders.

“My challenge to you,” he told business leaders at the transportation summit, “is to get organized. Get organized among yourselves and get your communities organized and build consensus”_Make noise.”

To collect ideas and develop a plan, the state Department of Transportation over much of the past year has solicited input from residents and businesses through public meetings; focus groups; surveys of businesses, elected officials, and transportation advocacy groups; and an interactive website, where users post suggestions for transportation investments in their communities and throughout the state.

DOT Deputy Commissioner Anna Barry, who spoke at the Connecticut Transportation Summit on Dec. 12, said the state’s vision for an effective, efficient transportation system includes a wide variety of large and small projects, among them construction of the new Q-bridge in New Haven and the 9.4-mile CTfastrak busway connecting New Britain and Hartford; the New Haven-Hartford-Springfield high-speed rail project; and the widening of I-84 in Waterbury, which Barry describes as “a major congestion point” in the state’s highway network and “the largest single project this year” for DOT.

“Our goal this year is $800 million [in delivered road and bridge construction projects], the highest level of construction funding in our history.”

Funds Diverted

While ideas for improving the state’s transportation infrastructure are never in short supply, the funding for those projects often is.

Connecticut’s 2014-2015 biennial budget includes $2.6 billion in operating funds and $1.3 billion in bonding approved in the Special Transportation Fund, the primary intended funding source for Connecticut’s transportation projects. (The STF was established after the collapse of the Mianus River Bridge in 1983, in response to concerns about adequate transportation funding.) Money is collected from the petroleum products gross receipts tax and the gas tax charged to consumers at the pump.

Connecticut, which already has one of the highest fuel taxes in the country, saw an increase in those taxes last year. (Seventy-two percent of businesses surveyed say the recent hike in gas and diesel taxes has impacted them; of those, more than 40% say the impact has been significant.)

Though much of the revenue from Connecticut’s fuel tax: which has raised over $2.6 billion since 2005: goes into the STF, to date only about half of that money has been put to its intended use. The rest has been raided to plug holes in the state budget and pay for non-transportation projects.

“Diversion of transportation funds is a serious problem,” says CBIA assistant counsel Eric Gjede. “Considering thatDOTestimates at least $12.5 billion is needed to pay for what it deems priority ‘unfundable highway and bridge projects,’ raiding the Special Transportation Fund for other types of spending is counterproductive. Unless the state can better manage its budget, finding and holding onto a dedicated source of funding for any new ideas that TransformCT identifies will be a challenge.”

State Senate Majority Leader John McKinney (R-Fairfield) agrees. “This really is a fundamental failure of our political system to make investments in our transportation system. We have to stop taking transportation money and spending it on other things.”

Nearly three-quarters of businesses surveyed support legislation protecting the fund from such raids.

A Smaller Piece of the Pie

“Transportation funding is simply not the relatively big piece of the pie that it was 20 or 30 years ago,” says Gioia. “For the biennium, the STF is only about 3% of the operating budget and no more than 20% of the capital authorization.”

A new law that goes into effect in 2015 is intended to prevent transportation dollars from being appropriated for other purposes, but the law can be undermined through legislative action: and could prove difficult to enforce.

Even after the law takes effect and the STF is preserved, however, there are other concerns. The number of bridges in need of repair is growing at a rate that will render the state’s gas and petroleum products gross receipts taxes insufficient to cover the costs.

In addition, says Gioia, within Connecticut’s General Assembly there is disagreement about whether funds should be directed to “Fix it First” projects (repairs to existing interstates, overpasses, and bridges) or used partly to fund road expansions.

Federal Funding Due for Fill-Up

The reinstitution of tolls on state roads has also been the subject of considerable debate in the General Assembly. Prior CBIA surveys have shown substantial business support for tolls coupled with dedicated funding for transportation, but that support has waned to some extent. Today, fewer than a third (32%) of businesses surveyed favor tolls on Connecticut’s major highways; 36% would approve only if funds were strictly applied to transportation needs.

Funding shortfalls at the federal level also threaten transportation investment, warns American Trucking Associations Chairman Phil Byrd, referring to the federal Highway Trust Fund, an accounting mechanism in the federal budget that pays about half the annual tab to build and maintain the nation’s roads, bridges, and rails.

Like Connecticut’s Special Transportation Fund, the federal Highway Trust Fund derives the majority of its revenues from excise taxes on gasoline and other motor fuels. Since most capital projects paid for by the Highway Trust Fund take several years to complete, and because existing obligations far exceed what’s available in the fund, current obligations must be met using tax revenues that have not yet been collected.

That’s problematic, says Byrd, because a combination of changing consumer habits, technological innovation, and congressional inaction has thrown the Highway Trust Fund accounts out of balance. With Americans driving more fuel-efficient cars, and new federal fuel-efficiency standards mandating an average fuel economy of 54.5 mpg for passenger vehicles by 2025, Byrd says we can expect a 21% erosion of fuel tax revenue by 2040.

To add to the problem, inflation has cut away about a third of the value of the Highway Trust Fund’s revenues.

Unless Congress acts soon, Highway Trust Fund outlays will continue to outpace receipts, and the fund will have a negative balance by 2015. By the end of 2023, the Congressional Budget Office projects a cumulative shortfall of $92 billion in the fund’s Highway Account (which pays for road construction), along with an estimated Mass Transit Account deficit of $34 billion.

Stabilizing, Maximizing Funds

“As cars become more and more efficient, as mass transit and other modes of transportation take purchased gallons of fuel away from the system, we have to have a mechanism in place to maintain and stabilize the Highway Trust Fund,” says Byrd, adding that without a stable federal funding source, states will find it difficult to approve large, long-term projects: and pressure to increase state taxes or draw on General Fund revenues will intensify.

A number of policymakers and industry experts, including Byrd, recommend increasing the federal fuel tax (which he says has a lower collection cost and administrative burden compared with other types of fees collected), indexing it to inflation, and earmarking revenues to go to highway improvements and expansions.

“As an industry, we’re willing to pay more in federal fuel taxes,” Byrd says. “But that money must be spent exclusively on roads and transportation projects.”

The realities of budget politics, however, Sharkey notes, makes that more difficult than it sounds. “There are some places in the state budget that you only touch if you have no political aspirations beyond the next year. You have to make it politically impossible for a politician to touch [the Special Transportation Fund]. It’s a difficult lift, but that’s probably the only way.”

For DOT’s part, says Barry, the agency is maximizing funding opportunities, stretching state and federal dollars, conducting rigorous reviews of its processes, and aggressively closing out inactive or completed projects in order to free up remaining funds. (Last year, DOT identified a total of $70 million from inactive accounts and repurposed that money for new transportation initiatives and capital improvement projects.)

The agency is also looking at new procurement methods, and DOT personnel have developed leaner procedures for all aspects of project delivery selection and oversight, as well as tools to evaluate programs and conduct cost-benefit analyses.

“This is a complete overhaul in the way we’re used to doing business,” says Barry.

Long-Term Vision

In 1999 Michael Gallis, one of the nation’s leading authorities on large-scale regional development strategies, produced a report for the Connecticut Institute for the 21st Century. In it, he warned that without an adequate transportation infrastructure and a strategic policy linking its different transit assets, Connecticut would become an economic cul-de-sac.

Fifteen years later, we have yet to develop a regional strategy, and Gallis’s advice is more relevant than ever.

In an effort to boost Connecticut’s economic competitiveness and growth potential, Gov. Malloy and DOT Commissioner James Redeker last June announced the launch of an 18-month initiative, TransformCT, aimed at developing a blueprint for a world-class transportation system. To that end, DOT is soliciting input from residents and businesses that will help the agency shape its 50-year strategic transportation plan.

Results of CBIA’s 2013 Connecticut Transportation Survey are also being shared with elected officials and government agencies to ensure that business perspectives and priorities are integral to the plan; that appropriate weight is given to capital improvements with the greatest potential to advance economic development; and that sustainable sources of funding are identified, leveraged, and preserved.

Lesia Winiarskyj is a writer and editor at CBIA. Contact her at lesia.winiarskyj@cbia.com.