Highway tolls may soon come to Connecticut as lawmakers search for additional money to fund transportation costs.
Facing projected deficits to Connecticut’s Special Transportation Fund, the finance, revenue and bonding committee heard testimony Monday on a bill to install electronic tolls on Connecticut’s highways.
The legislation already passed out of the transportation committee by a 19-15 vote down party lines on March 17.
The governor’s office and the Department of Transportation have raised the alarm saying Connecticut’s STF will fall into deficit due to lower revenues from gasoline taxes, which comprise nearly half of its yearly revenue.
Projections by the Office of Policy and Management indicate the STF will face a $17.1 million deficit by June of 2017 and deficits are projected to continue into 2020, according to the OPM’s fiscal accountability report.
But blaming lower returns from the gas tax may be misleading. Revenue from the gasoline tax and overall revenue to the STF have grown year over year and are projected to keep growing – just not enough to keep pace with rapidly growing expenses due to borrowing.
Connecticut currently charges drivers 25 cents per gallon as an excise tax and an additional 13.3 cents in additional sales tax, fees and taxes on petroleum companies.
The lower returns at the pump have been blamed on more fuel efficient vehicles which lower the amount of money people are spending to drive.
According to the Office of Legislative Research, revenue from the gas tax grew from $483 million in 2013 to $497 million in 2015 and is projected to grow another $4 million by 2020.
Total revenue to the STF is expected to grow from $1.4 billion to $1.7 billion between 2017 and 2020, according to the Office of Policy and Management fiscal accountability report.
Even so, the projected increases won’t be enough to make up for the fund’s rising operating costs, rapidly growing debt service payments and pension expenditures.
Connecticut has the sixth highest gasoline taxes in the nation according to a report by the Office of Legislative Research but those taxes haven’t been enough to keep Connecticut’s roads and bridges in good shape.
In 2016, the national transportation research organization reported 44 percent of the state’s major roads are in poor condition and 34 percent of the bridges are in need of major repair or replacement.
A 2016 study by the Reason Foundation found that Connecticut ranked 47th in the nation in terms of cost effectiveness for its transportation spending. Connecticut has spent a total of $477,875 per mile of road in the state.
The national average was only $160,997 per mile.
Connecticut also ranked dead last in terms of administrative costs per mile. Connecticut’s transportation administrative costs amounted to $83,282 per mile of road, more than any other state in the country.
In 2014, Gov. Dannel Malloy launched his “Let’s Go CT” plan, a 30 year, $100 billion plan to modernize and expand Connecticut’s transportation infrastructure.
In 2015, the legislature approved $3 billion in state bonding for Let’s Go CT through 2020 in addition to $5.9 billion in bonding for other capital projects.
And the governor has embarked on large public transportation projects with costs in the billions before, growing Connecticut’s bonded debt and yearly transportation costs.
The CTfastrak bus line cost $567 million to construct and $17.5 million in yearly operating expenses.
Malloy also pushed for a rail line from Hartford to Springfield, Massachusetts. Scheduled for completion in 2018, the railway is expected to cost over $1 billion in construction costs and $27 million in yearly operating costs.
A 2015 study commissioned by Malloy estimated Connecticut tolls could bring in between $5 and $62 billion over 25 years depending on the number and placement of the tolls, nowhere near enough to fund the Let’s Go CT project.
However, official state estimates put the figure closer to $18 billion over 20 years.
The projected deficits and lower-than-expected revenue have sparked a number of different revenue raising ideas, including the possibility of raising the gas tax or instituting a mileage tax, although both prospects are highly unpopular with the public.
Malloy previously committed $300,000 toward a study on the effectiveness of creating a mileage tax but the Department of Transportation dropped the plans amid public outcry and pressure from lawmakers.
Due to the unpopularity of the raising the gas tax and the mileage tax, lawmakers are now looking to bring tolls back to Connecticut’s highways.
House speaker Joe Aresimowicz, D-Berlin, has said the tolls could be up and operational in 18 months if approved by the legislature and the governor.
Democratic chairman of the finance committee, Sen. John Fonfara, D-Hartford, said during the hearing that he was “extremely disappointed” no one from the Department of Transportation attended the hearing to offer testimony.
“This is a significant piece of legislation,” Fonfara said. He related the seriousness and size of the legislation to the approval of Malloy’s Let’s Go CT transportation infrastructure project.
Fonfarra said it was “the largest investment the state of Connecticut has ever made. When you consider debt, it will be $200 billion we will invest in our transportation system if all goes forward.”
However, in testimony submitted to the committee, Yankee Institute assistant policy director Joe Horvath asked “do we have a revenue problem as it pertains to transportation, as many would suggest, or a spending problem?”