Connecticut’s transportation system is in crisis and needs almost $1 billion in new revenue over the next five years or the state will have to cut major road and rail programs and raise bus and rail fares, Gov. Dannel P. Malloy warned Thursday.
The governor said tolls, higher gas taxes or dedicating more sales taxes to transportation should be considered by the legislature. But those are politically unpopular options lawmakers have rejected in the past and will find hard to swallow, particularly in an election year like 2018.
“Today we are at a crossroads, and a decision must be made,” Malloy said. “Will we cancel important projects and let our roads and bridges deteriorate, or will we endeavor to face these problems head-on and find new ways to support our transportation system?”
Major projects, such as rebuilding the elevated portion of I-84 in Hartford, the “mixmaster” interchange in Waterbury, and dozens of other road and bridge projects, might have to be delayed. The state Department of Transportation would have to cut jobs and bus and rail fares would have to be increased, Malloy said.
Without action soon, Malloy said, the state fund dedicated to transportation will go into deficit and the state will no longer be able to borrow money to finance road and rail projects.
State transportation experts estimate that it would take a 14-cent-per-gallon increase in state gasoline taxes to keep the transportation fund out of deficit over the next five years.
The governor said the budget recently passed by the General Assembly doesn’t solve the nearly bankrupt transportation finance system.
Malloy, who isn’t running for re-election next year, denied that he should bear responsibility for the state’s failure to resolve a funding problem that’s been getting worse during his seven years in office, insisting he’s repeatedly tried to get the General Assembly to approve solutions. He said he did manage to push through a plan to dedicate half-a-cent of the sales tax toward transportation funding.
The Senate’s top Republican, Len Fasano of North Haven, rejected Malloy’s claim that the GOP is responsible for the crisis. “This is a result of bad policies that have been enacted by Gov. Malloy and his Democrat colleagues — policies that have run the transportation fund into the ground,” Fasano said.
“These problems were further exacerbated by a $100 billion transportation plan that was enacted without a way to pay for it,” Fasano said. “All of these actions combined have continued Connecticut down the road of fiscal ruin.” Fasano said he doesn’t believe the legislature should raise any taxes to deal with the problem.
House Republican Leader Themis Klarides of Derby also laid the blame for the current crisis at Malloy’s feet. She said a GOP budget that was proposed and vetoed in September by the governor would have solved the transportation fund problems without new taxes.
Malloy said improving Connecticut’s transportation system has been a major theme throughout his seven years in office, and he has repeatedly promoted his plans for a $100 billion, 30-year transportation infrastructure upgrade.
The transportation fund is supported by gasoline taxes, but those tax revenues have been declining for years and are now dropping at a faster rate than state experts anticipated because of more fuel efficient cars and lower fuel prices. The problem has gotten worse in recent years because it is also used to repay prior transportation bonding debts, and those have risen sharply in recent years.
“We knew this last year, we knew the Special Transportation Fund was on the verge of bankruptcy for the last two years,” said Rep. Antonio Guerrera, a Rocky Hill Democrat who is co-chair of the legislature’s Transportation Committee. “Everybody knew this.”
Guerrera said lawmakers who were worried about the fund’s solvency simply “didn’t have the votes to pass a gas tax” increase.
The bipartisan budget, passed in October after nine months of negotiation, does include shifting taxes on car sales into the transportation fund, but those transfers won’t take effect until 2021.
Malloy was vague about exactly when the legislature needs to take action to prevent the transportation fund from going into deficit, which would prevent the state from being able to borrow money through bonding. He said the state normally seeks to issue new transportation bonding in January or February.
According to a Malloy administration analysis, the transportation fund would start dropping into deficit in 2019. If no action were taken, either through spending cuts or new revenue, the projected transportation fund deficit would hit $388.1 million by 2021-22.
Guerrera said he believes the General Assembly must take action on this issue by the end of the 2018 legislative session in May.
Fasano said his understanding is that the transportation fund will continue to be solvent through 2018 and that the deficit issues would come to a head in 2019.
Malloy offered a statewide laundry list of potential cuts in transportation programs and services, from highway repaving to halting major rail construction projects, that would need to be chopped if the legislature doesn’t move quickly to boost revenue for the transportation fund.
The list also includes a possible 15 percent bus fare increase in 2018-19 as well as ongoing transit district subsidy cuts. There could also be 10 percent rail fare increase in 2018-19, and 5 percent rail fare hikes in the following two fiscal years.
Transportation projects that would be put on hold or canceled include portions of the New Haven-Hartford-Springfield rail project, replacement of up to 200 rail cars intended for the Shore Line East, Waterbury and Danbury lines, and work on the New Haven and Stamford railroad station parking garages.
Other projects that could be held up or abandoned include the Charter Oak Bridge interchange in Hartford, the Waterbury “mixmaster” at the intersection of I-84 and Route 8, Hartford’s I-84 viaduct, and the widening of I-95 between Bridgeport and Stamford and in eastern Connecticut.
Malloy said cutting off these projects and slashing operating expenses at the Department of Transportation, including snow plowing and road repairs, would “be catastrophic” for Connecticut’s economy and its future.
“I don’t think Connecticut has been competing well [against neighboring states] because of our failure on transportation,” Malloy said.
