Keith M. Phaneuf
Connecticut pumps nearly $1.6 billion in new state and federal money into its transportation capital program each year.
The problem, Department of Transportation officials testified Monday, is that to make all repairs and the strategic enhancements needed to to transform the aging, overcrowded system, Connecticut needs to find 30 percent more.
DOT officials also told a key legislative panel that Connecticut is barely treading water with its current capital program. In other words, the average condition of roads, bridges and rail lines is being maintained roughly the same.
But the state is relying on a system of short-term “patches” that will become increasingly problematic over the next decade. If Connecticut still is patching bridges and other structures it should be replacing 10 years from now, the overall condition of the transportation network will be significantly worse, transportation officials said.
“At our current levels of funding, we’re more or less standing still,” Mark Rolfe, chief of the DOT’s Bureau of Construction and Engineering, told the Transportation Bonding Subcommittee of the Finance, Revenue and Bonding Committee.
And until Gov. Ned Lamont and the General Assembly decide upon a long-term revenue plan for the transportation system, “we will continue (with) just a state of good repair. We won’t be advancing” added DOT Commissioner Joseph Giulietti.
For the past several years legislators have been listening to analysts warning that the Special Transportation Fund — which represents $1.6 billion or just under 8 percent of the overall state budget — is in dire fiscal straits.
Though the fund, on paper, is projected to run surpluses, transportation officials say that’s only because Connecticut — for too many years — is spending far too little to maintain and upgrade its infrastructure.Though the Special Transportation Fund pays for DOT operations and supports various public transit programs, its single-largest expense — about 40 percent of the entire fund — involves paying down principal and interest on borrowing to support the capital program.
In other words, if Connecticut needs a more robust capital program, it also needs more resources in its Special Transportation Fund to cover the resulting debt.
“We need to find a way to get through this,” Giulietti said.
The Lamont administration estimates that should Connecticut ramp up the capital program, the transportation fund would be insolvent at some point in the coming decade.
Connecticut currently issues about $800 million in transportation bonds per year. And Robert Card, chief of the DOT’s Bureau of Finance and Administration, said those bond proceeds help Connecticut qualify for roughly another $750 million in matching federal grants.
That means about $1.55 billion in state and federal resources are being pumped into the capital program this fiscal year.
But lawmakers on Monday asked Card how much the DOT would need not just to keep an aging transportation system in its current condition, but to make long-term repairs and strategic improvements like widening highways and rebuilding interstate junctions.
The “dream” scenario, Card said, would be $2 billion.It remains unclear whether Congress and President Trump will be expanding federal transportation funding for states, or — if they do — how much a wealthy state like Connecticut would benefit.
Lamont has proposed installing electronic tolls on major highways. The administration estimates this would raise as much as $800 million per year for the Special Transportation Fund — in turn enabling Connecticut to dramatically increase borrowing for the capital program.
Republicans, who are in the minority in the House and Senate, have proposed an alternative plan that doesn’t require tolls.
Equally important, Republican legislators say, Connecticut also wouldn’t need to to wait four years or more under their plan to begin investing heavily in transportation. Lamont estimates toll receipts won’t be available before 2023 or 2024.
In a plan called “Prioritize Progress,” Republicans would redirect other bonding — currently used for school construction, capital programs at state universities and economic development — for transportation.
State bonding for transportation construction work would swell from about $800 million per year to $1.4 billion annually. If matching federal funding remains flat, Connecticut would be pumping about $2.1 billion per year into its capital program right away.
In contrast, Lamont would essentially keep resources for transportation work constant over the next four or five years until toll receipts arrive.
Sen. Henri Martin of Bristol and Rep. Laura Devlin of Fairfield, the ranking Republicans on the Transportation Committee — and also members of the Transportation Bonding Subcommittee — said they fear the transportation advocates, the business community, and the general public, don’t understand the Prioritize Progress plan.“We’re trying to take people through this,” Devlin said, noting Republican lawmakers have begun a series of regional informational meetings across the state.
“I think if more businesses knew (Connecticut could accelerate repairs now) they would be reaching out to their legislators,” Martin said.
But some Democratic legislators have questioned whether Connecticut should freeze borrowing for school and state university building programs — a necessary prerequisite for the GOP alternative to work.
Lamont has proposed a “debt diet” that also would restrict borrowing in non-transportation areas, and Prioritize Progress would not be feasible if that “diet” were enforced.
In addition, the governor’s budget director, Melissa McCaw, has warned that even were Prioritize Progress followed, the Special Transportation Fund still would need additional resources or be at risk of insolvency by the end of the 2020s.
“First and foremost, borrowed money isn’t free,” said Colleen Flanagan Johnson, Lamont’s senior advisor. “By 2030, it is estimated the Republican plan will cost Connecticut taxpayers an additional $600 million per year. The Republican plan calls for the state to go on a borrowing bonanza, doubling down on the mistakes of the past, without a clear way to pay for our future. The (Wall Street credit) ratings agencies have already spoken, upgrading the state’s fiscal outlook based on the governor’s ‘debt diet,’ structural reforms and proposed new tolling proposal with an eye toward long-term economic development and growth.”
‘Debt diet’ starving DOT
PAUL HUGHES
HARTFORD – The governor’s “debt diet” is pinching the Department of Transportation’s ability to fund transportation projects, top DOT officials told state lawmakers Monday.
The capital spending plans of Gov. Ned Lamont fall about $500 million short of the annual funding needs for not only maintaining highways, bridges and rail lines, but making long-term repairs and strategic improvements to the state’s ailing and aging transportation system.
DOT officials told legislators on a transportation bonding subcommittee that the state government should ideally be spending roughly $2 billion a year between state and federal funds on the capital program.
“What we have found is at our current levels of funding we are more or less just standing still,” said Mark D. Rolfe, the DOT’s chief of engineering and construction.
He singled out bridges. The Federal Highway Administration reported 308 of the state’s 4,270 bridges are structurally deficient in 2018, down from 376 four years earlier.
Rolfe said short-term repairs are responsible for an improvement in bridge conditions, but structural problems will recur again in the mid-term.
“Although we are showing improvement in the short-term, when you look beyond 10 years out the condition of our bridges begin to deteriorate again, and that is because we are doing short-term repairs,” he said.
At this time, DOT is targeting bridges in the most need of critical repairs for funding, but Rolfe said the mix of bridge projects would be different if more funding were available.
“Instead of doing a patch, we might be doing more of a repair. Instead of a repair, we would be doing a bridge replacement,” he said.
The state currently issues $800 million in transportation funds annually, and this state funding leverages approximately $750 million in matching federal grants, said Robert C. Card, the DOT’s chief of finance and administration.
Lamont is proposing to authorize $776.6 million in revenue-backed special tax obligation bonds for the upcoming 2020 fiscal year and another $782.4 million for 2021 fiscal year.
He also announced that he will not permit the State Bond Commission to issue $250 million in general obligation bonds to supplement STO bonds that the last legislature authorized in a bipartisan budget plan.
DOT Commissioner Joseph Giulietti advised members of the bonding subcommittee that there are ongoing internal discussions in the Lamont administration about making some exceptions concerning the use of GO bonds. Other top administration officials have made such public statements recently.
Giulietti said the current talks between DOT and the state Office of Policy and Management have been encouraging, and he believes there is a recognition of the need for additional funding beyond what was initially proposed.
“I have been given assurances that they will work with us, and they have already shown a willingness to work with us,” he said.
Giulietti was hopeful when Rep. Emil “Buddy” Altobello, D-Meriden, asked him to assess the odds of the State Bond Commission approving the $250 million in GO bonds, but made no pledges.
“I’ll hope that it is better than 50-50,” Giulietti said. “How about we put it there.”
Republican legislators have also criticized Lamont over his decision to hold back the $250 million in GO bonds that the previous legislature approved. The House and Senate GOP are proposing to spend $2 billion in state and federal funding a year to support transportation projects for the next 30 years.
“I think everybody supports the governor’s plan for a debt diet. I believe that 20-year plus transportation infrastructure projects are the appropriate place for bonding to be used,” said Rep. Linda Devlin, R-Fairfield, the ranking House member on the Transportation Committee.
Sen. Henri Martin, R-Bristol, the ranking Senate member, called Giulietti’s report on the internal discussions between DOT and OPM welcomed news.Lamont is proposing installing electronic highway tolls on major highways to shore up the Special Transportation Fund. The administration estimates tolls could raise as much as $800 million annually.