New bud­get of­fice stud­ies: Tolls save ei­ther $20 bil­lion or noth­ing

The News-Times - - BUSINESS - Alone [email protected]­medi­

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.

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