Governor Considers Borrowing for Transportation Projects
With highway tolls likely off the table, at least this legislative session, Gov. Ned Lamont is now exploring borrowing as an alternative transportation funding source.
“I hate to do it this way,” the governor told reporters.
“It’s bonding in place of other things that are priorities, but right now there’s no other option on the table.”
The death of the tolls issue gives rise to other complicated and complex fiscal issues.
Toll revenue was key for funding the Lamont administration’s 10-year, $21 billion transportation infrastructure plan, along with bonds and federal loans.
However, with the legislature unwilling to act on proposals tolling all vehicles or trucks only, the governor is considering bonding $200 million a year for transportation.
That will bolster the state’s Special Transportation Fund, which annually services $800 million in borrowing and leverages $750 million in federal grants.
However, the administration says with STF revenues declining, bonding is a short-term approach that does not address the state’s long-term infrastructure needs.
The STF, which also covers Department of Transportation personnel costs, is primarily funded through the state’s 8.1% wholesale gas tax, 25 cents-per-gallon retail gas tax, and a portion of overall sales taxes.
It is unlikely the legislature would entertain increases in either or both gas taxes, particularly in an election year.
Last June, the governor and legislature rolled back planned increases in sales tax distributions to the transportation fund.
And last year, Lamont also pledged to cut annual bonding by $600 million, a self-imposed “debt diet” designed to control the state’s spiraling debt costs.
That means he likely will look at moving priorities away from some non-transportation projects to borrow $200 million for highways, bridges, and transit.
The General Assembly would have to approve that proposal if that’s the direction the administration chooses to take.
A modern, safe transportation infrastructure system is a fundamental factor for economic growth and Connecticut has suffered from a lack of sufficient investment.
It is critical that the legislature and the administration find compromise and unite behind a plan that will provide the resources necessary to rebuild and modernize our infrastructure.
It’s also essential that transportation revenues are protected and spent in an efficient, cost-effective manner.
For more information, contact CBIA’s Brian Corvo (860.244.1169).
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