Lamont seeks alternatives for transportation fund

administration officials say.

Truck toll receipts would have added $150 million-to-$200 million per year.

Equally important, they would have helped Connecticut qualify for low-interest federal transportation loans.

This means Connecticut could have borrowed significantly more for infrastructure repairs.

If legislators won’t consider tolls, they could consider raising fuel taxes for the first time in seven years.

But Connecticut has two taxes that impact the price of gasoline — not to mention one of the highest fuel tax burdens in the nation.

When distributors bring fuel to local gas stations, the state applies an 8.1% wholesale tax. (A state-approved surcharge effectively raises the rate to 8.81%.)

This equates to nearly 15 cents per gallon, based on current wholesale prices, according to the according to the Connecticut Energy Marketers Association. But when oil prices skyrocketed in 2007 and 2008, the tax generated as much as 26 cents per gallon.

Regardless of the amount, gasoline station owners say they build the entire cost into the base price charged motorists, who also face a flat, 25-cents-per-gallon retail tax.

The wholesale tax last increased in 2013, following a schedule adopted in 2005. The retail tax last was changed in 2000, when legislators and then-Gov. John G. Rowland lowered it from 32 to 25 cents per gallon.

Neither Lamont nor any legislators have proposed any fuel tax hikes to date this year. The governor often has said tolls and other user fees were more reliable than increasing gasoline taxes, given the increasing fuel efficiency of vehicles.

The two fuel taxes together provide roughly half of the revenue for the $1.73 billion Special Transportation Fund.

Another option to mitigate the absence of toll receipts would be to increase sales tax revenue dedicated to transportation. co-chairman of the finance, revenue and bonding committee, said he hopes the administration’s bonding proposal from two weeks ago is still on the table.

“I take the administration at its word,” the Hartford lawmaker said. “I thought those decisions were based in good [borrowing] policy.”

But if the bonding debate gets heated, the Democratic governor may have allies on the other side of the aisle.

Senate and House Republicans have argued for the past decade that state borrowing is too high, and Fasano warned last fall that if Democrats sent a bloated borrowing plan to Lamont — and if the governor vetoed it — Senate Republicans would not support an override.

The battle over the state’s credit card also extends to borrowing for school construction. And sources said another dispute between Lamont and legislators — which was put on hold during the tolls debate — is now coming to the forefront.

Legislators from both parties balked last November when the administration unilaterally moved the Office of School Construction Grants and Review — which annually oversees hundreds of millions of dollars in construction grants to school districts — from the Department of Administrative Services and into the Office of Policy and Management. A high-profile agency that houses the governor’s budget staff, OPM is seen as closely involved with implementing the administration’s political agenda.

Critics said the move threatens a process that not only works well, but has traditionally been immune from politics.

Administration officials said the move only was about increasing efficiency, but conceded it would require legislative approval, and submitted a bill this month to retroactively endorse the switch.

But the legislature’s education committee raised a bill this week to block it.

This consternation surrounding the transfer comes at a time when the flow of money funding new school construction projects or major renovations has been significantly scaled back in recent years. The administration has insisted that this is the result of making sure that only projects that are close to being shovel-ready are brought before the legislature for approval, and eventually by the State Bond Commission.

But Kostantinos Diamantis — who heads the school construction unit — told the education committee that the downturn is going to continue because of a “self-imposed cap” of about $400 million in grants per year.

Education writer Jacqueline Rabe Thomas contributed to this report.

Keith M. Phaneuf and Jacqueline Rabe Thomas are reporters for The Connecticut Mirror (http://www.ctmirror.org). Copyright 2020 © The Connecticut Mirror.

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