Connecticut’s simmering battle over the resumption of highway tolling triggered a proposal to leverage private dollars through a state infrastructure bank.
State Sen. Alex Bergstein, D-Greenwich, who filed a bill calling for the bank, said public-private partnerships through a state bank could multiply every dollar up to 10 times.
“Connecticut can innovate its way to an economic recovery if we modernize our infrastructure and change how we finance it,” said Bergstein, Senate chairwoman of the banking committee. She took office in January after upsetting five-term incumbent Scott Frantz, ending 90-year Republican control of a district that includes Greenwich, Stamford and New Canaan.
According to Bergstein, the bank could finance such major transportation projects as the 30-30-30 project that Gov. Ned Lamont favors, with a goal of 30-minute train times between Hartford, New Haven, Stamford and New York.
The bank could unlock access to more than $80 trillion of capital that institutional investors control, Suneel Kamlani, a Harvard fellow and former chief executive of Royal Bank of Scotland and of UBS, said at a public hearing.
Bergstein cited the work in renewable energy by Connecticut’s Green Bank as a model.
Her bill would finance a loan program with funds appropriated from the Special Transportation Fund or other revenue designated for infrastructure improvements, “including potential future streams of revenue from electronic tolls, and leveraged with private debt capital through the issuance of bonds or other financing arrangements for eligible infrastructure projects including, but not limited to, the building, renovation and repair of highways, bridges, railroads, waterways, ports and airports.”
About 57% of Connecticut’s public roads are in poor condition, according to think tank Regional Plan Association. RPA said 338 of the state’s bridges are structurally deficient.
Connecticut phased out tolls in the 1980s, after a fiery crash at the Stratford toll plaza along Interstate 95 killed six people. The state’s current budget and revenue problems, which include across-the-board bond rating downgrades in 2017, have reignited the call for tolls.
Moody’s Investors Service rates Connecticut general obligation bonds A1, while S&P Global Ratings and Fitch Ratings rate them A and A-plus, respectively. Kroll Bond Ratings Agency assigns its AA-minus rating. Kroll assigns a negative outlook, the others stable.
Lamont projected tolls would generate $800 million to $1 billion annually, starting in 2023. “We would be able to borrow against that; we’d be able to put together public-private partnerships. We’d be able to leverage the money coming out of Washington, D.C.”
His tolling plan would affect interstates 95, 84 and 91, the Wilbur Cross and Merritt parkways and the Charter Oak Bridge.
Out-of-state motorists, he said, would pay for roughly 40% of the tolls, Startup costs are estimated at up to $200 million.
Municipal Market Analytics said the new revenue could stabilize the state’s Special Transportation Fund, enable infrastructure investment and reduce the drain on the general fund. According to MMA, calls for modernizing the sales tax and installing taxes and charges on sugary drinks, e-cigarette fluids, plastic bags and liquor and wine bottles would benefit the transportation fund, given that 0.5% of the proceeds are dedicated to the fund.
Republican leaders remain opposed to tolling.
“The only certainty under the Democrats’ tolls plan is that Connecticut’s transportation fund is going to be broke and Connecticut residents are going to be pickpocketed yet again,” said Senate GOP Leader Len Fasano, R-North Haven.
Illustrating the division within the state, a
Overall, while 34.7% of residents supported the implementation of electronic tolling, another 36.2% were “more likely” to back it if the state guaranteed that funds would go into the transportation lockbox for use only on roads, bridges and highways.
State voters approved the lockbox provision in November.
