Infrastructure Funds Will Transform State ‘If We Do It Right’
“This funding will transform Connecticut, if we do it right,” Department of Revenue Services commissioner Mark Boughton says of the $5.4 billion Connecticut is receiving through the federal Infrastructure Investment and Jobs Act.
Boughton, appointed by Gov. Ned Lamont to oversee how the state spends those funds, led a discussion about funding priorities with business leaders at CBIA’s April 21 Connecticut Economic Update conference.
Pat Munger Construction Company president David DeMaio, Tom Jensen, vice president of government affairs at UPS, and Santa Energy Corporation chair Tom Santa shared a range of perspectives with Boughton and an audience of 200 business leaders.
Boughton explained the funding includes a dedicated $5.4 billion over five years and additional grants for which states will compete that he noted will require quick action.
“If you ain’t first, you’re last,” Boughton said. “You’ve got to get those applications in as fast as possible.
“There’s a long lineup of very competitive grants from other states, other counties, other cities and towns across America, and we want our fair share.
“That’s really where I think Connecticut can excel. Connecticut is uniquely positioned to be able to tap into that money.”
Boughton then asked the panelists what government needed to get right to ensure the infrastructure bill is transformative.
DeMaio—who serves on CBIA’s board of directors—described road construction as the “low hanging fruit,” but acknowledged adding new lanes to the road was nearly impossible given the effort and logistics.
Instead, he advocated for bolstering freight rails.
“The infrastructure is there and it’s dated,” DeMaio explained. “But it needs to be updated to reduce the heavy truck traffic on our highways.”
DeMaio also called for a focus on “last mile” facilities, a reference to the last stage in the delivery process.
“For us to put 40 trucks on the road with crews and have to fight the traffic that’s on these highways, if we could get that freight off the highways and on the railways to convenient transportation locations, I think that’d be a generational change,” he said.
“We really need to rethink how freight is moving through and within the state,” he said.
“We’ve underinvested in rail and deepwater ports for a long time. These are dormant assets that really beg to be brought back to life, invigorated, and create opportunities and jobs.”
Santa pointed out there is a “sea change in transportation” as remote work is becoming the norm and businesses are beginning to get back to usual.
“But our supply chain infrastructure is strained beyond capacity,” he said.
“So we’ve got to rethink in an intermodal way how we approach the problem and solve it.”
“Concentrate on what matters most,” Jensen said, “like your key freight and mobility pinch points,” such as interstates 95, 91, and 84.
“It’s all about increasing fluidity and velocity for moving people and moving goods. Fixing potholes is great, but if you’re not trying to figure out capacity, you plan to fail.
“Everything is being ordered online and that is not going away, and we are going to need more trucks whether you like it or not.”
Boughton approached the same question from a private sector perspective, asking what businesses can do to make the bill transformative.
Santa said the first step was was ensuring all constituencies agreed on goals and objectives.
“Everybody arrives at the party with their idea of what the problem is and how to solve it,” he said. “The key to solving a problem is identifying it.
“We need to stand back and look at the big picture, and figure out what are the things we can do that will cost the least to get us the most.”
Jensen—who is UPS’ chief transportation advocate in Washington, D.C.—took the approach that just because the bill passed does not mean everything will come for free to the business community.
“We need to continue to pay for what we invest in,” he said. “It’s user pay and user benefit.”
He argued that the temporary suspension of the gas tax in Connecticut was the wrong approach to improving the economy, and instead policies should be implemented that directly target inflation.
“We need to be partners in this,” he said. “There’s no free ride when it comes to transportation and infrastructure.
“We need to be willing to pay our fair share if the money goes to where it’s directed and deserved.”
DeMaio said that if the bill were to succeed, businesses need to “embrace change.”
“Clearly, there’s going to be change,” he said. “Let’s say, for example, there’s a big initiative to improve public transportation—to make it efficient, make it clean, make it on time.”
DeMaio said his company is providing incentives for employees to transition to public transportation, such as an annuity fund that goes towards a college fund for their children.
“Now you’re creating generational wealth within the family,” he said. “I know that’s outside the box thinking, but isn’t that what we’re supposed to be doing?”
When asked about specific programs, DeMaio said he is looking for an easier way to get his employees a commercial driver’s license.
“We’ve got loads of freight, steel, and lumber sitting at plants and elsewhere in the country that we can’t get transported in,” he said.
When he researched getting CDLs for his employees, DeMaio said it was about a month’s worth of training that his company would need to cover at a cost of about $6,000 for each license.
“How do we work together to solve that issue?” he asked. “I’m willing to pay my fair share, but how do we make that more convenient to get done?”
Boughton acknowledged how expensive and difficult it can be for a company that is just starting, and alluded to a program he is working on with the governor.
“I’ve talked to the governor about this, and we may have some help coming for you,” he said. “I’m working on something.
“Jensen zoomed out, and spoke about prioritizing of “projects of regional and national significance.”
He took aim at programs that lawmakers push for for political reasons, and instead focused on projects that will do the most good for the largest number of people.
“Ultimately, that’s what the transportation system is,” he said.
“It’s got to be looked at as a holistic economic driver and job creator.”
Santa said it was difficult to track specific programs because there is so much happening at the governmental level.
Boughton told him that the state government is making outreach efforts to walk businesses through programs including searchable documents, quarterly calls, and visits to facilities.
“We want to hear from you,” he said, “and we will come out and meet with you in your business to understand the challenges you’re having.”
When it comes to the supply chain, DeMaio said he needs more support from government.
“It’s become such a regulatory burden to bring steel mills online,” he said.
“Until we can get the raw material facilities online here and have the infrastructure to support them, the pinch point is that we can’t make the product here.”
Jensen agrees, but is unconvinced the infrastructure bill is the way to reform the supply chain.
“This is a completely natural, organic process,” he said.
“It will change and self correct, and it’s going to take a long time to self correct, and it’s going to be painful in the meantime.
“The role of government in making that happen, I’m not sure the infrastructure bill is going to fix the supply chain.”
As far as change is concerned, “being in the energy business is kind of like being in the eye of the hurricane,” Santa said.
“And the supply chain there is at the nexus of a lot of our issues.”
While Santa knows the country is moving away from a petroleum-based economy, the process is going to take decades.
“We cannot stop investing in the oil infrastructure now, because we won’t get to the brave new world that we’re going to,” he said.
“We are a very energy intensive society, and we’ve got to work on that.
“Solving some of our transportation issues will begin that process, but it’s not going to be easy and it’s not going to be cheap.”
Boughton closed the panel by asking the panelists what it would look like for the bill to fail.
DeMaio said failure to utilize all the funds would be a “catastrophic event” for the state.
“We have so many challenges, and if we don’t make these changes then it’s a big missed opportunity,” he said.
“It’s not only making the changes at the legislative or investment level. It’s getting every Connecticut business owner to embrace and support that change.
“It’s got to be a holistic approach for the business owners to really embrace it.”
“Failure would be status quo,” Jensen said.
“We know what it looks like today. Take a picture, and if we’re having the same conversation six years from now, that’s failure.”
“It’s easy to spend money,” Santa said, “but we’ve got to get the benefit.
“We’ve got to make sure the benefits are real, tangible, and are going to improve the state. Otherwise the money will be gone, and nothing will have changed.”
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