New budget office studies: Tolls save either $20 billion or nothing
Simple choice, right? If we need $700 million a year more than we’re spending now, we can either borrow it at a cost of $1.15 billion a year, or collect it through tolls at a cost of just over $500 million.
That’s not how Senate Minority Leader Len Fasano, R-North Haven, sees it. He sent a corrected version of the Republican transportation bill to the fiscal analysis office — changing the wording from referring to “bond authorizations” to “bond issuance” — and presto! The total fiscal cost dropped to zero in a separate OFA note.
The reason: If the GOP plan doesn’t push bond authorizations up, but rather relies on bonds that were authorized for something else, then the added cost to taxpayers is zilch.
“OFA says no fiscal impact,” Fasano declared, pointing to a note the office issued on May 17.
Here’s another twist: Last week, the Republicans declared the state can get by with just $375 million a year in extra spending, at least for a while. A Federal infrastructure bill — don’t hold your breath — could keep Connecticut’s costs down permanently.
There’s no fiscal analysis on that smaller amount of spending but you can pretty much cut the figures in half and use the same logic.
Democrats called the zero figure a ridiculous ploy. Borrowing money costs money, period.
“The cost of the Republican proposal to even begin fixing our backlog of necessary road and bridge repairs is so outrageously expensive as to be a nonstarter,” said Sen. Cathy Osten, D-Sprague, as strong tolling advocate. “That’s nearly $3,400 in interest charges for every man, woman and child in Connecticut. For a family of four, that’s more than a year of tuition, room and board at a Connecticut state university.”
There’s no question, borrowing costs more than tolling — if we’re spending additional dollars over what we’re now spending. Fasano contends the state can get away with shifting around current borrowing, especially for the smaller amount of $375 million.
Republicans oppose tolling because it adds a new tax on top of the burdens we already have, and would keep rising. Democrats oppose new borrowing because — as Republicans often say in other debates — it locks our children and their children into big payments for decades.
“We continue to believe – and the ratings agencies agree – that borrowed money isn’t free,” Lamont strategist and spokeswoman Colleen Flanagan Johnson said in an email. “In what twilight zone do we find ourselves in when it’s the Republicans suggesting that the state take out billions of dollars on the state’s already maxed out credit card?”
Fasano argues the state can cut borrowing in many ways, to save the $375 million and still remain under the statutory borrowing cap of $1.9 billion a year. Less for new schools, less for housing, less for economic development and on and on.
Many Democrats in the General Assembly disagree and say we shouldn’t stop investing in the state. Funny thing, though — Lamont agrees with Republicans, and his “debt diet” does just that.
We’re going to have a special session sometime after June 6 for the tolls debate. Why not the best of all plans: Cut bonding as lean as possible. Toll instead of borrowing for all needed new spending on highways and bridges. And make deep tax cuts — or better yet, at least $200 million a year in credits against the state income tax — part of the package.
That’s the cheapest route for Connecticut taxpayers. Don’t bet on it happening, but it should.