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TRANSPORTATION FUNDING – AN IMPERATIVE FOR ECONOMIC STABILITY AND STRATEGIC GROWTH

In developing our 2008–2011 strategic plan in 2007, Alliance investors emphasized that maintaining and expanding our transportation infrastructure is critical to the Region’s ability to compete for jobs, capital, and talent. Investors identified specific and necessary improvements that include:

• one hour commuter rail service linking Hartford to New York and Boston;
• the completion of the New Britain to Hartford Busway;
• expansion of I-84 west of Waterbury; and
• numerous local road and bridge repair projects.
  

Our investors recognize that these items are part of the comprehensive, multi-modal transportation strategy adopted by the Connecticut Transportation Strategy Board (the “TSB”).

Adequate Funding: An Urgent Need

Our investors also acknowledge that the State’s Special Transportation Fund (the “STF”) is woefully inadequate to address both the “state of good repair” requirements for existing infrastructure and the expansion needed for the 21st Century transportation system required for Connecticut to compete successfully in the global economy. This decline severely hampers our ability to help ourselves at a time when the demand for federal investment throughout the country grows exponentially. Since the STF depends primarily on the gasoline tax, the steady decline in gasoline consumption during 2008 exacerbates our challenge. In short, our infrastructure, and the economic growth which rests on it, will falter unless Connecticut has one or more adequate, equitable, secure, and sustainable sources for the STF.

Our Proposal for Safe, Efficient Transportation

To that end, the Alliance Board recently adopted a series of resolutions that support a 15¢ per gallon increase in gasoline taxes (implemented at 3¢ per gallon increase for each of five years) and the establishment of electronic tolls as part of the State’s FY’10 and ’11 biennial budget. The resolutions also emphasize that these incremental revenues must be secured in a lockbox segregated from the general fund and that the priorities for investing such funds be determined by the TSB. The adoption of the 15¢ increase would restore the identical amount eliminated in 1998.

The Alliance recognizes that these recommendations, especially the gasoline tax increase, will be resisted by some in light of current economic pressures. While the Alliance clearly acknowledges those realities, we advocate increasing the gasoline tax by 3¢ per gallon each year for five consecutive years beginning on July 1, 2009, because it is the most effective way to generate meaningful revenue immediately to address the anticipated deficit in the STF. Each penny of the tax generates approximately $15 million. A 3¢ per gallon increase will produce $45 million each year with an estimated $225 million generated annually after the fifth year.

We also note for those opposed to such an increase that gasoline prices have fallen from over $4.00 per gallon earlier this year to well under $3.00 per gallon today and that oil prices have dropped dramatically from $140 per barrel. If a person drives 20,000 miles a year in a vehicle averaging 20 miles per gallon, his or her annual incremental investment in our transportation system in purchasing 1,000 gallons of gas would be $30 for each 3¢ increase. Moreover, several national policy experts have advocated for a floor on gasoline prices to encourage alternatives to single rider automobile commuting with the differential used to fund the development of alternative fuels.

Tolls: A Critical Addition

The proposed gasoline tax increase will serve as a bridge to the establishment of an electronic toll system for one or more of the state’s highways, similar to the systems used in virtually all of the Northeastern states. Such tolls are paid by all users of the highways, a reality especially helpful to Connecticut whose roads are traveled by many non-residents.

Given that gasoline consumption continues to decline and investment in alternative fuels is on the rise, the steady shrinkage in the STF is certain to accelerate. Accordingly, an electronic toll system becomes ever more critical to provide the billions required for transportation maintenance and expansion. While the TSB evaluates whether to recommend the establishment of such a system to the legislature in 2009, two to three years will easily lapse before we implement at least one toll system.

Federal Reauthorization

To ensure that Connecticut receives appropriate federal funding for its transportation system, the Alliance urges the Governor and the State Legislature to be fully engaged in the debate over the structure of the new Federal Reauthorization Bill that is scheduled to be in place as of October 1st of 2009. We anticipate that the bill will result in sweeping changes in the manner in which Federal funds are allocated for innovative financing proposals such as those advanced by the TSB. Additionally, a primary focus of the new legislation will be the crafting of a sustainable revenue source that address the multiple transportation modes required to support economic growth in different regions of the Country.

 Jobs and the Economy

By advocating for these funding sources, the Alliance also champions the maintenance and creation of the construction jobs and related opportunities associated with transportation initiatives, jobs and opportunities that are requisite to returning to economic stability and prosperity. Such funding sources also strengthen Connecticut’s ability to compete for any federal transportation funding that requires local matches.

In summary, visible and enthusiastic advocacy by the business and institutional communities is a vital prerequisite for our political leaders to adopt the sustainable transportation funding sources needed to secure a competitive and green Connecticut, to pursue an effective transit oriented development strategy, and to strengthen our ability to compete for jobs, capital, and talent. As specific bills are drafted for the upcoming session, we will be asking you to urge your legislators to support these funding initiatives. For additional information, please contact Katie Bailey at kbailey@metrohartford.com or Oz Griebel at oz@metrohartford.com.