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If The State Borrows To Fix Highways, Will There Be Money For School Construction, New Sidewalks And Economic Development?

If The State Borrows To Fix Highways, Will There Be Money For School Construction, New Sidewalks And Economic Development?

Hartford Courant, February 21, 2020

By Daniela Altimari

With the political collapse of his plan for truck tolls, Gov. Ned Lamont is now proposing to fund transportation repairs and improvements through borrowing — raising concern that there won’t be state money for other projects.

"I hate to do it this way,'' Lamont, a first-term Democrat, said when he announced he would abandon tolls and borrow money to pay for his $19.1 billion transportation package. "It’s bonding in place of other things that are priorities. But right now, there’s no other option on the table.”

Lamont’s decision has sparked concern that highway, bridge and mass transit projects could monopolize most of the state’s long-term borrowing, leaving far less for other capital projects.

Lamont has already placed the state on a “debt diet” to reduce borrowing. But with the failure of his tolls proposal, the governor said he now intends to redirect $200 million annually to fund transportation needs.

Hartford Mayor Luke Bronin — a tolls supporter — said he fears the failure of the governor’s plan could jeopardize the state’s economic health by siphoning money that could have been generated by out-of-state trucker from other worthy projects.

"To the extent that we, as a state, had an inability to do what every state in our region already does, could, I fear, be putting all of those priorities at risk,'' Bronin said. “We have to be willing to work together, across party lines and [from] cities and towns, big and small, to invest in those areas that are critical to Connecticut’s economic future.

"If we are not willing to make those investments in the key drivers of economic growth, we’re going to find that Connecticut’s economic challenges will persist for a long, long time.''

The new plan to pay for tolls through borrowing has created “a level of concern and uncertainty,” said Joe DeLong, CEO of the Connecticut Conference of Municipalities, a lobbying group for cities and towns.

“The more money that comes out of the bond package for transportation, especially if there’s a debt diet, that’s going to limit the funds available for other things,'' DeLong said. "Ultimately it ends up in higher property taxes.''

The governor’s two-year, capital spending plan now includes everything from $15 million for renovations at the state Capitol to big-ticket items such as $950 million for local school construction projects.

Lamont's priorities back to top

A wide cross-section of the plan reflects Lamont’s priorities as governor. There is $90 million to improve deep water ports in New London and Bridgeport to spark economic development. And, there is $40 million for the Workforce Training Authority Fund, created in the last legislative session to foster a better match between worker skills in Connecticut and the jobs that are available.

And Lamont has pledged $55 million for the renovation of Hartford’s XL Center arena, considered by many to be essential to city revitalization.

The state’s affordable housing initiatives and programs through the state Department of Housing were also included in the plan, with a $175 million boost. The state Department of Economic and Community Development’s long-running grant program for cleaning up contaminated properties was replenished with $47 million, funding considered key to redeveloping old industrial sites and making projects financially feasible.

In his remarks on Wednesday, the governor suggested some of those initiatives could be at risk. He reaffirmed his pledge to hold to his debt diet, which was initially set at $1.3 billion per year but grew to $1.7 billion this year. (That’s still significantly less than the amount borrowed by his predecessor, Gov. Dannel P. Malloy.)

 “That $200 million that we were going to pay for with out-of-state tractor-trailer trucks is now going to have to come out of the bond bill in place of other priorities. We can’t bond for everything,'' Lamont said.

“Is it the best way to fund it? No. Is it 100% paid for by the taxpayers of Connecticut? Yes. Are the interest rates going to be a little bit more? Yes. Is it a smart way to go? No. But it’s a plausible way to get this thing going,'' Lamont said.

Senate Republican Leader Len Fasano said he appreciates the governor’s effort to rein in the state’s borrowing, though he disagrees that there are no other alternatives to borrowing to fund transportation. "If he sticks to his debt diet and puts in another $200 million for transportation, I could be supportive of that,'' Fasano said. “He may be able to make it work but there’s a lot of number crunching I haven’t done yet.”

Elizabeth Gara, executive director of the Council of Small Towns, said some community leaders are concerned that the debt diet will impact municipal aid.

 “Our members understand the need for a debt diet because they also struggle to reduce bonded indebtness,” Gara said. “We’re committed to working with the legislature and the administration to address these issues.”

Ultimately, the derailment of the toll discussion could spark a larger conversation about how the state funds transportation, municipal projects and a host of other capital improvements, said DeLong of the Connecticut Conference of Municipalities.

“That conversation has needed to take place for years,'' DeLong said. “We need wholesale reforms in how we fund and deliver services at the local level. This may bring it into sharper focus but it’s been an issue for some time. We are not on a sustainable path.”