With or without a lock box, Connecticut businesses don’t have a lot of faith in state government.
Gov. Dannel P. Malloy and the legislature have seized on the idea of using state highway tolls to help pay for underfunded transportation infrastructure. If all sides hash out the details of a proposal they already agree on in principle, tolls in Connecticut could be a reality by the end of the legislative session, which started Wednesday.
The business community, however, is extremely wary of what government ultimately will do with this new revenue, said Eric Gjede, a lobbyist for the Connecticut Business & Industry Association. While the money is supposed to be earmarked for transportation infrastructure improvements, the state has a history of reallocating money to shore up deficits and fund other projects.
The gross receipts tax, for example — one of the two taxes levied on the sale of gasoline — was set up in 1991 to provide insurance against fuel spills at gas stations. But, the state raided that fund so many times to cover deficiencies elsewhere in the budget that the insurance program was discontinued in 2012, leaving gas stations to pay for cleanups out-of-pocket. The gross receipts tax, however, is still in place.
“If you are going to impose something new like tolls on the people and businesses of Connecticut, they need to have confidence that it is going to be used for transportation projects and not diverted for other expenses,” Gjede said.
Malloy has said he would only support tolls if the legislature passed a law saying transportation revenue would not be diverted for other purposes, a so-called lock-box provision. However, of the 23 other states with similar lock boxes, 17 still have found ways around the law, through practices as simple as diverting transportation funds not covered under the lock box to other non-transportation programs.
Connecticut businesses have mixed feelings on tolls anyway, Gjede said. They will hurt delivery and logistics companies, but the state’s crumbling transportation infrastructure and highway congestion are CBIA members’ top concerns.
“We need dollars in our transportation fund to alleviate that,” Gjede said. “Transportation infrastructure is critical to everybody in this state.”
House Speaker Brendan Sharkey (D-Hamden) said tolls will be given serious consideration this session. Because motorists are using fuel more efficiently, collections of the state and federal gas taxes have declined, eroding the main source of funding for transportation projects.
“Our transportation infrastructure is holding back our economic development,” Sharkey said.
If tolls are adopted, Connecticut should be able to afford reducing its taxes on gasoline, which are the third highest in the nation, Sharkey said.
“The creation of tolls has to come with a corresponding reduction in the gas tax, and a commitment to use the money for transportation infrastructure improvements,” Sharkey said. “We can’t use these revenues to balance the budget.”
Connecticut had tolls on its highways until 1983 when a tractor-trailer rammed four cars at the Stratford toll plaza on I-95, causing an explosion and killing seven people.
Any new tolls would use technology so motorists wouldn’t have to stop on the highway, said House Majority Leader Joe Aresimowicz (D-Berlin). Toll states like Florida and New Jersey have readers where motorists don’t have to slow down. Other plate-recognition technology could be used, where motorists don’t pay a toll but are sent a bill in the mail.
“Gov. Malloy signaled he wants to leave a legacy of transportation improvements,” Aresimowicz said. “This is a way we can effectively pay for the transportation infrastructure we need in this state.”
Although tolls will be a hot topic during the session, the No. 1 issue will be the upcoming two-year budget, which has a projected $1.3 billion deficit for its first year. Most of that discussion will start after Malloy gives his budget speech in February.
“I’m hoping we can sit down and talk with the leadership on both sides of the aisle and figure out the best way to approach this situation,” said Senate Minority Leader Len Fasano (R-North Haven). “We tax too much, we borrow too much, and we are not living within our means.”
Sharkey said he favors making cuts to local government spending by regionalizing services like education.
The legislature this session also will seriously consider a proposal to cap the basic utility connection fee at $10, said Aresimowicz. The issue came up during the last rate case for Berlin electric utility Connecticut Light & Power, where the utility asked for the basic connection fee — which customers are charged to hook up to the grid, regardless of how much power they use — to increase from $16 to $25.50. Regulators eventually awarded an increase to $19.25.
“Capping that fee is a logical step we should take this session,” Aresimowicz said.
Rather than imposing more regulation on the utility, Fasano said the legislature should do more to cut utilities’ expenses, including reducing the amount of costly renewable energy they are required to purchase.
