It was a busy week at the Capitol with various committees meeting and holding public hearings. The Progressive Caucus unveiled their legislative proposals this week, and no surprise they are proposing a more progressive tax system including a capital gains tax. Other priorities include: •Predictive scheduling and a fair work ...
Gov. Ned Lamont’s Tolling Promises and Diversions: A Look at the Numbers
Even if Gov. Ned Lamont gets his tolling bill through the General Assembly during a special session, his plan, the budget and proposed reductions to the gasoline tax and bus fare would amount to $288 million in either less revenue to the Special Transportation Fund or increased public transportation subsidies.
That could detract from the overall net impact of tolls revenue to the STF from $800 million per year to $512 million and that’s only if lawmakers don’t continue to divert vehicle sales tax revenue away from the STF in the next biennium.
Here’s a look at the numbers which, by necessity, warrants a number of assumptions and caveats.
In a bid to win public and political support for tolling Connecticut’s highways, Lamont’s latest tolling bill allows for lowering the state gasoline tax by 5 cents per gallon if certain funding goals are met and reducing bus fares from $1.75 to one dollar.
Although Lamont estimates his tolling plan would raise $800 million annually, reducing the gas tax and bus fares would reduce revenue to the Special Transportation Fund and increase state subsidies to the tune of $116 million.
That would leave projected toll revenue at $684 million if the state is able to meet all its anticipated revenue goals.
The five-cent reduction in Connecticut’s gasoline tax would mark a 20 percent reduction, totaling $101 million, based on 2018’s gasoline tax revenue which topped out at $505.3 million, according to the Office of Fiscal Analysis.
That reduction would be done in one cent increments over five years, if the toll revenue amounts to enough money to pay the bills. A three-year moratorium on toll rates is included in the latest bill, however rates could be increased to meet funding needs following that three-year window.
Reducing bus fare by 42.8 percent – as Lamont has offered – would necessitate an increase in Connecticut’s subsidy for bus service.
According to figures from the Connecticut Department of Transportation, Connecticut took in only $34.2 million in CT Transit and CTFastrak revenue in 2018 and subsidized the bus lines with $116.6 million.
Reducing bus fare would mean $14.6 million less in revenue, necessitating a higher subsidy from the state.
But the state of Connecticut must also subsidize transportation for individuals with disabilities along Connecticut transit routes known as ADA Service, which essentially acts like a taxi-service for disabled individuals who can’t get to a transit station.
The fare for ADA service is capped at twice the bus fare rate. Right now, the fare is $3.50 per trip and ADA took in $2.5 million in revenue in 2018, while the state subsidized $39 million.
Under Lamont’s promise to reduce bus fare, the ADA fare would drop to two dollars, necessitating an additional $1 million.
The budget passed by the General Assembly also diverted the transfer of $172 million in vehicle sales tax revenue away from the STF and into the General Fund.
Whether that diversion would continue into the next biennium remains to be seen, although budget proposals offered by both Lamont and the Finance, Revenue and Bonding Committee made those diversions permanent to the tune of $399 million or $301 million less into the STF every year, respectively.
Combined, the reduction of the gasoline tax and the increase in bus subsidies and the diversion of the vehicle sales tax transfer for only this biennium amounts to $288 million, leaving the net increase to transportation funding through tolls at $512 million.
Unless, of course, toll rates are increased following the three-year moratorium.
But Lamont has offered other reductions and giveaways in exchange for political and public support for tolls.
Although the latest tolling study from CDM Smith posited discounts for instate drivers, Lamont has proposed further discounts low income residents, which could further reduce the amount of revenue generated by tolls.
Representatives from Bridgeport said they would be willing to support tolls in exchange for the state financing a new train station at a cost of $300 million, which is mentioned in the tolling bill.
During a meeting with legislative leaders, Lamont floated the possibility of an income tax credit for middle-class families to help pay for tolls. That credit would reportedly cost $100 million.
Lamont has also said he wants to increase public transportation spending by $100 million, which would raise Connecticut’s annual subsidy for trains and buses to $471.7 million.
Despite all the numbers and political posturing over tolls, the state’s plan would ultimately have to be approved by the Federal Highway Administration which, to date, has never reviewed any similar proposal from a state.
Lamont met with legislative leaders from both side of the political aisle on Wednesday to discuss tolls, transportation funding and a possible special session.
Legislative leaders in the Connecticut House of Representatives and Senate proposed holding “synchronized voting” for a tolling bill because it was so unpopular with the public neither chamber wanted to go first and neither was confident the other chamber had enough votes to pass the bill.