Connecticut Legislature Short-Changed Transportation Funding by $650 Million since 2011

Lawmakers short-changed Connecticut’s Special Transportation Fund by $650 million between 2011 and 2017, according to a transportation funding document released by Senate Republicans — more than enough to pay Connecticut’s portion of the new commuter rail line from New Haven to Springfield, Massachusetts.

The vast majority of the funds were “diverted” away from transportation funding, meaning the revenue scheduled to be placed in the STF was kept in the General Fund to aid with budget deficits and general government expenses.

Senate Republicans published their “Prioritize Progress” plan as an answer to Connecticut’s transportation funding problems which doesn’t rely on tolling Connecticut’s highways. Instead, the plan calls for more targeted bonding for Connecticut projects.

The STF is funded through several taxes and fees, including the gasoline tax, a gross receipts tax on petroleum companies, a portion of the state sales tax, motor vehicle receipts and licensing fees.

Connecticut’s transportation funding faces future difficulties due to escalating costs, and $4.3 billion in projects were suspended in January because the STF faced insolvency. Gov. Dannel Malloy and some state lawmakers have called for tolls on Connecticut’s highways to increase transportation funding by $1 billion per year.

A bipartisan budget fix passed in August of 2018 increased the state’s sales tax transfer to the STF and allowed for $250 million in General Obligation bonds to supplement transportation funding.

The fix staved off fare increases for bus and rail commuters, but the STF faces long-term fiscal problems.

Connecticut has a history of diverting transportation funding away from the STF, which predates 2011 and the current administration.

According to an article in the Danbury News-Times, $1.26 billion of the petroleum gross receipts tax was diverted to the General Fund between 2005 and 2014.

The largest withholding of transportation revenue came in 2014 and 2015, when the legislature diverted $345.6 million in STF funding to the General Fund and swept another $76.5 million from the STF through a budget bill, according to the Senate Republican’s plan document.

The legislature also diverted $87.5 million in sales tax revenue meant for the STF between 2016 and 2017 after the state began to dedicate a small portion of sales tax revenue to the STF, according to the Prioritize Progress plan.

Malloy has repeatedly called for a transportation “lockbox” to ensure the legislature cannot use state revenue earmarked for transportation to fund other government expenses.

A constitutional amendment forming a “lockbox” for transportation funding passed the House and Senate in 2017 and will be on the ballot for the November 2018 election.

But critics argue the lockbox language isn’t strong enough and only protects funding once it deposited into the STF, meaning General Fund revenue meant for transportation could still be diverted again in the future.

The $650 million of diverted and raided transportation revenue would have been more than enough to pay Connecticut’s share of the new Hartford Line, a commuter train which connects New Haven to Springfield, Massachusetts.

The Hartford Line cost a total of $760 million. Connecticut bonded $564.3 million for the new train line and the federal government covered the remainder.

Senate Republicans say their Prioritize Progress plan will provide $70 billion for infrastructure over the next 30 years without raising taxes or implementing tolls.