Plan to cut CT’s transportation debt could offer more than savings
By using nearly $8 billion in budget surpluses to shrink
pension debt, state officials addressed a longstanding problem that had
weakened education, health care and other core services for decades.
State Treasurer Erick Russell and Gov. Ned Lamont now hope
to do something similar — albeit on a smaller scale — with Connecticut’s
transportation program.
Rather than attacking unfunded pension obligations, this
plan would erase hundreds of millions of dollars in bonded debt, the principal
and interest on highway, bridge, and rail projects. The goal ultimately is to
save about $70 million in annual debt service payments and use that savings to
accelerate the rebuild of Connecticut’s aging transportation infrastructure.
But for the initiative to be completely successful, the
Department of Transportation needs to overcome a second hurdle: pushing
Connecticut’s construction program to record highs.
“The goal here is to actually maximize the opportunity for
savings,” Russell told The Connecticut Mirror, adding it’s designed to produce
benefits for many years to come. “We’re doing so in a way that is about getting
long-term benefits.”
The treasurer, who first brought the plan to the Lamont
administration for inclusion in the governor’s proposed budget adjustments for
2024-25, is focused on the $2.15
billion Special Transportation Fund that represents 8.5% of the
overall $25.1 billion state budget.
The fund, which has been running well in the black in recent
years, covers the operating costs for the departments of transportation and
motor vehicles. But about 40% of the fund, more than $867 million this fiscal
year, will cover principal and interest payments on the hundreds of millions of
dollars Connecticut borrows annually — and then matches with federal grants —
to fuel its transportation capital program.
Lamont’s budget office projects the STF to close this fiscal
year with a
surplus of $240 million, or 11%. Last year, it closed 15% or $277 million
in the black — and that was despite a 13-month gasoline
tax holiday that saved motorists about $330 million. Most of that, $240
million, occurred during the 2022-23 fiscal year.
The Special Transportation Fund reserve, the account that
holds these surpluses, is projected to approach $920 million by June 30, equal
to almost 43% of this year’s STF.
That enormous reserve already has prompted calls from
gasoline station owners, anti-tolling advocates and Republican legislators for
reductions in fuel taxes or repeal of the highway mileage tax on commercial
trucks.
Russell’s plan would cut that huge reserve by 55% right
away, using slightly more than $500 million in unused funds to shave down
Connecticut’s outstanding transportation debt, which exceeds $7.4 billion. Most
of that debt was borrowed at 5%, though some of the notes are marked at 3% to
4%, the treasurer said.
The plan also would cap that reserve fund balance at 18% of
the STF, or about $386 million. Any future surpluses, whenever the reserve is
full, also would be used to retire transportation debt early.
Legislators from both parties quickly praised the plan,
which is expected to be part of whatever budget adjustments Lamont and
legislators make this spring to 2024-25 state finances.
Its popularity may stem from its similarity to how
Connecticut dealt with the rising mandatory pension contribution that dominated
budgets in the first two decades of the 2000s, leeching resources away from
many other programs.
Now that Connecticut has funneled $7.7 billion in surpluses
into its pensions since 2020, required contributions will rise about just $50
million next fiscal year.
They otherwise would have grown closer to $700 million.
Similarly, Russell and Lamont’s staffs estimate the early
retirement of more than $500 million in transportation funds will slow the
growth of the STF debt service line item by about $60 million within two years.
And the savings could reach $75 million by 2028, keeping the transportation
fund solvent at least through that year as well.
When Connecticut began to chop into its pension debt, Wall
Street credit rating agencies responded with improved grades for state bond
offerings that led to lower interest rates.
“I think this [transportation bond pay-down] will be very
well received from the rating agencies,” Russell added. “This is another
example of us implementing sound fiscal policy.”
“For the first time in a generation, the state of
Connecticut is not lurching from one financial crisis to the next,” the Lamont
administration wrote in its budget introduction. “The state’s financial
position is stable, and, unlike other states, we are not facing deficits that
would result in deep cuts in spending or substantial increases in taxes.”
But paying down debt and achieving savings in the STF is not
the only challenge Connecticut faces.
Cars and trucks struggle daily to navigate an agency system
of highways and bridges, much of which was constructed in the 1950s.
And while transportation fund revenues and fund balances
have swelled, critics say construction work has not grown as swiftly. If
Connecticut saves $60 million to $75 million annually in a transportation fund
that’s already achieving big surpluses, they added, the state must leverage
those resources to ensure hundreds of millions of additional dollars are
invested in projects each year.
The state borrowed an average of $725 million for
transportation from 2015 through 2018 under Malloy, according to debt
reports from the state treasurer’s office, pairing it with about $700
million in yearly federal construction grants.
But Lamont has enjoyed far more resources than Malloy did,
stemming largely from a surge in sales tax revenues that help fund the STF. Yet
borrowing for projects hasn’t grown commensurately.
During Lamont’s first four years, annual average borrowing
ticked upward just 2.6%, reaching $744 million — even though STF revenues grew
22% over the same period.
Construction industries and trades alike insist the
transportation construction program should be double its current size. And
they’re not alone.
A 2015 study prepared by the Malloy administration, “Let’s
Go CT!,” recommended the annual capital budget, including state
borrowing and federal grants, should exceed $2 billion by 2019 and top $3
billion by 2021.
But Malloy’s benchmarks hinged on Connecticut establishing
electronic tolls on its highways. And when lawmakers rejected tolling proposals
from Lamont in 2019 and in 2020, the administration had to modify its goals.
Still, construction advocates say Connecticut should have
been well over the $2 billion per year mark, even without tolls, given its
other resources. And with $60 million to $75 million in savings, they add, the
state has the flexibility to issue more bonds — and cover more debt service
payments — without increasing the sales and fuel taxes that support the
transportation fund.
The Lamont administration has ramped up borrowing somewhat
in the governor’s second term but still hasn’t hit its own targets.
In a November 2021 report, the administration aimed
for $1.2
billion in state transportation borrowing by 2022-23. The state
actually borrowed $830
million.
It projected a
$1 million investment this year, then adjusted to $875
million.
But Department of Transportation Commission Garrett
Eucalitto, who inherited these challenges when Lamont tapped him to run the
agency about one year ago, feels the transportation program has turned the
corner.
Enhanced federal funding, stemming from the $1.2 trillion
infrastructure bill President Joe Biden signed in 2021, should send $1.1
billion to Connecticut this year. Combined with the $875 million in state
borrowing, overall funding for the capital program is already at nearly $2
billion. And the agency is well aware of the need to take full advantage of
generous federal funding.
“We’re pumping out as much work as we can do,” he told the
CT Mirror last week, adding that while some strategic work to reduce congestion
may progress more slowly, projects needed to preserve safety haven’t been
delayed. “The infrastructure is not degrading as a result of our inability to
get more work out the door.”
Still, the administration is projecting $1 billion in state
borrowing next fiscal year and $1.1 billion the year after that.
Governors and legislators have puzzled for nearly 15 years
about how to ramp up projects. A
2010 legislative investigative panel concluded that staffing and other
challenges left the DOT struggling to complete projects on time and under
budget.
As recently as 2022, the department had fewer authorized
full-time positions than the 3,398 it had in 2010, according to state budget records. And while
authorized full-time positions now are 3,567, or 269 higher than 2010 levels, a
nearly 11% vacancy rate has left just 3,189 filled.
“I’m not going to pretend that our staffing challenges
haven’t held back some of our project development,” Eucalitto said.
Still, the commissioner says expanding the capital
program over the next two years is a realistic goal.
The administration already has begun trying to counter a
huge surge in state employee retirements that occurred two years ago when
pension benefits rules changed. It’s cut a 24% vacancy rate among
engineers nearly in half.
“We have made significant progress over the last few years,”
he said, adding that many states have struggled to retain transportation
engineers in the face of strong competition from private sector wages.
As several major projects wind down over the next year in
neighboring New York, including the Tappan Zee Bridge replacement, Connecticut
transportation officials are already making plans to accelerate projects here.
“I think the construction industry could absorb more work,
and I think we’re going to get there,” Eucalitto said, adding that he remains
confident officials will give his department the resources it needs. “Both this
administration and the legislature have never said ‘no’ to us yet.”
New Norwalk High School's $239M construction begins after 1 month delay
NORWALK — Construction officially began this week on
the new
Norwalk High School with the installation of fencing around the
site.
This marks the
first step in the five-year project that is scheduled for completion in 2029,
though students will start classes in fall 2027.
Emily Morgan, media relations specialist for Norwalk Public
Schools, said in a text message Tuesday morning that the district will
“schedule an actual groundbreaking ceremony probably in the next month or so.”
The construction comes a month later than the district’s
anticipated February
start. Last month, Deputy
Superintendent Sandra Faioes, who oversees facilities and operations, said
that groundbreaking on the new NHS was delayed by winter weather conditions.
The fencing installation comes with some day-to-day impacts,
according to an update posted on the Norwalk
High School website Monday morning.
“This will not have an immediate impact on campus traffic,
but it will close the football field and track,” the update said.
Starting Friday, only some students’ parking availability
will be limited. Affected students will be notified and their parking location
moved to Andrew’s Field, the update said.
All student parking will move to Andrew’s Field by March 29.
The new 332,628-square-foot school building, which will
house NHS as well as P-TECH on its campus, will accommodate over 2,000
students, according to the NPS construction website.
Contractor Gilbane Building Company will construct the
school where the Testa Field Complex is currently located. A new athletic
facility will be built in place of the existing school, which will be
demolished, according to the project website.
“As a result, many athletic programs will be displaced
during construction from 2024 through 2027,” the project website states.
Between fall 2027 and the fall 2028, the district will bus
student athletes to spaces at Nathan Hale Middle School, West Rocks Middle
School, Cranbury Elementary School, Brien McMahon High School and Oak Hills
Park to continue sports participation when Testa
Field is unavailable.
“By distributing NHS athletics to alternate facilities
within the community, some recreational sports will also be displaced,” the
website said. “City of Norwalk Recreation and Parks has reviewed these impacts
and is confident that they can coordinate a suitable alternate location or time
to accommodate these sports."
The $239 million project will cost the city about $47.8
million with an 80 percent
state reimbursement rate.
To fully capitalize on the reimbursement, the city moved
the property line between NHS and Naramake Elementary School westward,
cutting out some Naramake property, according to Alan Lo, the city’s building
and facilities manager.
The school’s new parking lot should open in fall 2028, with
a new field replacing the old Testa Field. New tennis courts are slated to
open in spring 2029.
East Hartford approves $6.5M for demolition in Founders Plaza, fewer apartments likely to be built
EAST HARTFORD — A newly executed agreement between the town
and the developers of the Founders Plaza property near the bank of the
Connecticut River transfers $6.5 million in state funding for demolition of the
former Bank of America building.
The new
agreement, approved by the Town Council at a special meeting Monday, also
reduced the minimum number of apartments expected to be built and the timeframe
for construction of the first phase.
The agreement now calls for permits to be pulled within four
years for 150 units in the first phase instead of the 300 that had been
discussed in recent weeks. The original
plan, unveiled last summer after Lexington Partners, the lead developer, bought
the property for $4 million, called for 1,000 units to be built along with
300,000 square feet of commercial space, a pedestrian bridge over the river to
Hartford, and a transportation center.
East Hartford Mayor Connor Martin said Tuesday that
"150 units is actually the minimum, which is still significant, but
ultimately the project's goal is to have 300 units in the first phase. Later
phases will also include additional units of housing, to be discussed in the
future."
The developers have since set aside the bridge and
transportation center to focus on the housing for the $840 million project,
which originally included $125 million to $150 million in public improvements.
Christopher Reilly, president of Lexington Partners, said
last week that even though interest rates have started to stabilize, they are
still high and lenders have taken a step back, prompting the company to rethink
the rollout of the project.
"We're phasing out the project in more manageable
increments," he said.
Reilly said the financial factors will also have an impact
on how quickly the first phase, which he estimated will cost $110 million to
$120 million, will begin construction.
The new agreement also calls for the $6.5 million demolition
grant to be converted to a loan if the building permits are not issued within
four years. The new provision would call for the loan to accrue interest at the
rate of a 15-year treasury bond, plus 4 percent.
Martin said the measure was simply put into place in order
to protect the state's and the town's investment, while also setting
expectations and milestones, encouraging the developer to meet these
benchmarks.
"I have full confidence in this project," Martin
said.
Reilly said Tuesday that they still intend to build 300
units in the first phase, but added that due to capital market uncertainty,
finding a lender now for 150 units should be less of a problem.
As for the grant possibly being converted to a loan, Reilly
acknowledged that it was an incentive to build.
"That's expensive," he said.
The new agreement with Port Eastside LLC also has a future
provision for tax abatements, tax fixing agreements, caps on fees, or other
incentives in order to complete the project.
Norwalk advances traffic signal modernization project with $3.4 M federal grant, 'two new signals'
NORWALK — The city is beginning phase five of a grant-funded
project aimed at modernizing the city’s traffic signals, which
involves the addition of two new signals and the conversion of 19 existing
signals to an adaptive timing system.
“This grant is for two complete, new traffic signals,” explained Jim Travers, director of Norwalk’s Transportation, Mobility, and Parking Department during the Economic and Community Development meeting last Thursday. “One at North Avenue, Main (Street) at Cross (Street), and the other one… is actually going to be Strawberry Hill (Avenue) and County (Street).”Top of Form
“In addition to those two signals, we are also extending the
city’s synchro green, adaptive technology,” said Travers, referring to
technology that allows the traffic signals to adapt to the volume of traffic
over time.
Norwalk has received a $3.4
million federal grant that will cover the design and construction of
the new signals, among other traffic improvements.
Received through the Congestion
Mitigation and Air Quality Improvement Program, a federal grant
program with the U.S. Department of Transportation, Federal Highway
Administration, Fred Eshraghi, Norwalk’s traffic signal engineer, took the lead
in this application, Travers said.
TMP requested $380,461 of the grant to be allocated to
the engineering consultant VHB to
design the new intersections and design a new transit signal priority system
for 56 intersections. The Economic and Community Development approved the
agreement with VHB for $380,461. The Common Council will vote to authorize
the agreement as well.
The intersection at Strawberry Hill Avenue and County Avenue
will be designed in anticipation of the new
Norwalk High School campus.
Switching signals to an adaptive timing system will improve
traffic congestion in the city much better than having a set time for
intersections, Travers said.
“We would time the signals one time and then that would
stay, but adaptive actually just learns the behavior of traffic and can make
fluctuations in signal time itself to better move traffic,” Travers said. “So
we’re seeing this technology really advancing.”
Overall, the $3.4 million will cover the replacement of two
traffic signals, the implementation of adaptive traffic signal technology at 19
intersections, improve pedestrian enchantment at 56 intersections and introduce
transit signal priority at 56 intersections.
“We have been slowly, over the years going through —
for grants to modernize is the city’s traffic signal,” Traver said. “These are
city-owned traffic signals… we would otherwise need to make the investment
through our city capital dollars.”
Barbara Smyth, Common Council member, thanked the TMP
department for yet “another grant-funded project.”
“It’s just wonderful the amount of money you’ve been able to
bring in to improve things here in Norwalk,” Smyth said. “The adaptive signals
really have made a difference, so thank you.”
Norwalk’s first adaptive signals were installed on West
Avenue in partnership with the Sono Collection and the city has used grants to
extend the technology down the corridor. The city is also working with Wegmans
to install adaptive signals on Connecticut Avenue to help
improve the traffic flow with the popular grocery chain coming to the
city.
“The city of Norwalk was the first city in the state to
engage in adaptive signal technology,” Travers said.
State board offers $8M to help clean-up proposed Bridgeport soccer site
BRIDGEPORT — A special state board has
recommended spending $8 million to help clean up lower East Side properties
where a developer wants to build minor and major league soccer stadiums, plus
adjacent housing, retail and a hotel.
Though that amount is, according to key legislators
from Bridgeport, only about a quarter of the $30 million that was sought, it is
being welcomed as a first sign of support for and faith in the overall project
by state government.
"We're trying to piece together other monies,"
said state Rep. Antonio Felipe, a Democrat who represents the area along the
Pequonnock River off of Stratford Avenue and Kossuth Street where the
stadiums would be constructed. “(We are) trying to come to a place where we can
use different pots of money to get to the full sum."
Felipe and state Sen. Marilyn Moore, D-Bridgeport, sit on a
board of fellow legislators and other state officials that review applications
to the Community Investment Fund. The legislature set up the fund in 2021
to target aid to projects and initiatives that would benefit underserved
and marginalized communities.
Last October, Andre Swanston unveiled
a multi-phase proposal to bring professional soccer, along with
housing and retail, to the former greyhound racing track site on the lower East
Side. Then
in January Swanston's Connecticut Sports Group announced a minor
league soccer team was ready to call Bridgeport home as soon as next year if a
venue was built that would be a precursor to a larger major league stadium.
Felipe and Moore both said the initial ask was for $30
million.
A summary of the application provided by the state's
economic development office makes no mention of soccer. It only specifies the
funds will be used "towards remediation of 20-acres of brownfield sites
... and establishment of (a) sustainable waterfront location through
coastal resiliency and flood mitigation infrastructure."
That point was emphasized by Democratic Gov. Ned Lamont's
office. Lamont
has previously expressed skepticism about using taxpayer dollars to build the
stadium. And his senior press secretary, David Bednarz, in a statement
Tuesday said, "Our understanding is that the city’s application to the
Community Investment Fund board is solely for funding to remediate the
land at this property with the goal of attracting a developer to build
something at this site that will foster economic development in this
historically disadvantaged neighborhood, and this land has to be remediated
regardless of what type of project ends up getting built there."
Bednarz also noted that ultimately all CIF dollars
require final approval from the Lamont-chaired Connecticut Bond
Commission.
The actual CIF application was submitted by the Bridgeport
Economic Development Corporation, a quasi-public non-profit which can partner
with the city or with private developers like Swanston and Connecticut Sports
Group. Hearst Connecticut Media Group submitted a Freedom of Information Act
request for that document. It was denied until the contract for the $8 million
is finalized and executed.
Swanston in a statement Tuesday welcomed the $8 million and
said it "complements significant private capital already
committed." He thanked Lamont's economic development department and
Bridgeport's state legislators and added, "We look forward to deepening
our collaboration with state and local leaders as this development
progresses."
A big supporter of Swanston's plan, Felipe noted it would
have been difficult for the CIF board to grant the full $30 million sought for
the environmental cleanup given last fall the same group authorized $22.5
million to demolish PSEG's former coal-fired power plant in the South End
Felipe said the $30 million "would have been the
biggest single award we've ever given, and Bridgeport already has the largest
single project with PSEG."
"Two rounds in a row getting the biggest one didn't
feel right to members who maybe wanted something in their communities,"
Felipe said. "We got what we could."
Moore called the $8 million "a start" for
Swanston. She said the housing component in particular appeals to her.
Swanston is pledging to build 1,000 units.
As of early January Swanston had said having the minor
league stadium built and open for the 2025 season was "ambitious but
possible." On Tuesday Connecticut Sports Group stuck with that timeline,
stating that the site work should begin in the spring "to complete stadium
construction by summer 2025."
Moore is doubtful the minor league team will be playing next
year.
"There's no way," she said. "This is a huge
project, financially. They're only getting $8 million from the state. They've
got to get the rest of the funding they need to build (and) you've got to do
remediation."
Felipe said it is crucial to establish the minor league team
as soon as possible and prove there is a market for it in Bridgeport in order
for Swanston to move forward with the next phases.
“Having that team play and be successful is the path
to getting a major league team," he said. "They need to show
that expansion is worth it."
It is unclear if any other state dollars will be forthcoming
for the stadiums in 2024. The current legislative session adjourns for the year
May 8. It is always possible lawmakers and the governor could agree before then
to set aside some funds in the biennial state budget. And there are various
land-use monies for Connecticut Sports Group to also pursue.
Another of Swanston's boosters in the legislature is state
Sen. Herron Gaston, D-Bridgeport. Gaston Tuesday welcomed the CIF's $8 million
investment.
"It's a step in the right direction," he said.
"Certainly I think this is a great signal that we are definitely committed
to seeing the soccer project take off in a very meaningful way."
He continued, "And I think during a subsequent
legislative session there may be greater opportunities for more funding for
this very vital project I think is going to help to be a gamechanger with
respect to revitalizing and resuscitating the heartbeat of Bridgeport."
A group created by state lawmakers to invest in distressed
municipalities approved $3 million to help transform a long-shuttered Hartford
diner into a community center Tuesday.
The Asylum Hill Neighborhood Association’s $3 million
request for the 1,767-square-foot former Aetna Diner at 267 Farmington Ave. was
among 27 proposals that were tentatively approved for $74.28 million in funding
by the Community Investment Fund 2030 board Tuesday morning.
Chaired by State House Speaker Matthew Ritter and Senate
President Pro Tempore Martin R. Looney, the board was created by state
lawmakers in 2020 with the mandate to approve up to $875 million for
community-building projects in distressed municipalities over five years.
“CIF funds can be a game changer and help restore vibrant
and healthy communities," Ritter said in a released statement. "Here
in Hartford we are seeing projects be earmarked with the resources they need to
spark additional development and growth — projects like the Aetna/Comet Diner
property, the Charter Oak Cultural Center, the Hartford Workforce Hub and the
transformation of the blighted former Chester Bowles Park Housing into Willow
Creek."
House Matt Ritter said,
Requests by municipalities and nonprofits that were approved
by the Community Investment Fund 2030 Board still must pass the state Bond
Commission.
Other items passed Tuesday include:
$5.75 million – for the “Rubber Avenue Corridor
Revitalization” in Naugatuck. Funds will be used for stormwater drainage
infrastructure to promote private investment.
$250,000 – for renovations to Camp Schade by the Boys and
Girls Club of New Britain.
$8 million – for remediation of 20 acres of brownfields
along Kossuth Street, Howe Street and Stratford Avenue and establishment of a
sustainable waterfront with flood mitigation infrastructure under the
Bridgeport Economic Development Corp. CIF funds will support public park
aspects of the project.
$6.5 million – for renovation of Connecticut’s first
synagogue on Charter Oak Avenue in Hartford. This project will allow the
Charter Oak Cultural Center City School for the Arts to add eight classrooms
and upgrade handicap accessibility.
$1.32 million – for sidewalk improvements and renovations of
Elmwood Park in Danbury, as well as a neighborhood drainage study.
$250,000 – for planning to transform 20 acres in the
distressed “Mount Pleasant – Myrtle Street Corridor” of New Britain into a
sustainable community.
$2 million – for improvements to Howard T. Brown Park in
Norwich.
$2.79 million – to help Click Inc. of Windham to renovate
its kitchen, food processing and storage facilities, add office and community
training space.
$2.13 million – to build a greenhouse on the Community
Health Center Inc. greenhouse in Middletown.
$5.15 million – to help Connecticut Trust for Historic
Preservation Inc. perform studies and renovations at seven locally and
nationally significant places in Bridgeport.
$2.75 million – for the Continuum of Care in New Haven to
purchase its two facilities at 977 Ella grasso Boulevard and 163 Blake St.,
preserving 58 units of affordable housing.
$250,000 – to the Friends Center for Children in New Haven
for a planning grant for community engagement and design of the Flint Street
Family campus.
$250,000 – for Haven’s Harvest, in New Haven, to conduct a
community engagement and feasibility study of its work in the Fair Haven
neighborhood.
$1.62 million – for the completion of the 12-acre urban
Lyman Allyn Park in New London.
$350,000 – for community engagement, a master plan and
designs for renovations to the two sites of the New Haven Museum.
$900,000 – to support Northeast Neighborhood Partners Inc.’s
development of a workforce hub in the Swift Factory in Hartford.
$3 million – for the streetscape improvements in Norwalk.
$5.52 million – for pre-development, site improvements and
infrastructure for Willow Creek in Hartford under the Overlook Development
Corp.
$3.44 million – to Sound Communities Inc. to replace 54
units of obsolete affordable housing with 55 modern units.
$2 million – for a new childcare building for the Thames
Valley Council for Community Action in Groton.
$4 million – for improvements to Rockwell Park in
Bloomfield.
$8.68 million – to support the development of 64 affordable
housing units, a community facility and streetscape improvements around 2980
State St. in Hamden.
$3.5 million – to build a downtown library with surrounding
street safety improvements in Manchester.
$250,000 – for community engagement toward creation of a
master plan for Mansfield’s municipal facilities.
$250,000 -- to fund community engagement and a planning
study for Plainfield’s Parks and Recreation Department.
$250,000 – to help the University of New Haven identify a
West Haven site for its dental and healthcare clinic.