Connecticut Pushes Ahead on Transportation Projects as Revenues Plummet

Traffic has dropped 50 percent across the state and nation, oil prices have collapsed and state transportation departments relying on fuel taxes are losing revenue – but the Connecticut Department of Transportation isn’t cutting back on any projects just yet.

Transportation officials in states across the country – including Missouri, North Carolina, Ohio, Oklahoma and Pennsylvania – are already scaling back planned highway projects or furloughing workers as they expect more people staying home will mean less revenue from key sources of funding, including the gas tax. 

Connecticut Department of Transportation Spokesman Kevin Nursick said the state hasn’t cutback yet.

“We are currently evaluating the impacts of Special Transportation Fund revenue declines to our capital program,” Nursick said.  “No determinations have been made.”

State revenues will be down across the board as tax filing deadlines are delayed and businesses remain closed, making transportation funding just one part of broader budget discussions in Hartford.

Fuel taxes, a tax on oil companies, and sales taxes account for over 70 percent of the revenue to the Special Transportation Fund — each bringing in less revenue than the state budget planned for, but Nursick said that lost revenue won’t stop highway construction in the near future, and projects are going ahead as planned.

“Project designs, project progressions are all moving forward, albeit in a new fashion with the vast majority of our office staff telecommuting,” Nursick said.

Among the projects moving forward is a planned roundabout at the intersection of U.S. Routes 1 and 22 at the town lines of Guilford and Branford, for which the department is accepting bids through May 20.

Connecticut’s Special Transportation Fund was budgeted to end the year with a $38.8 million surplus, but declining revenues could leave the fund with a $135.8 million deficit when the fiscal year ends on June 30, the Office of Policy and Management estimated in a memo sent to the state comptroller on Monday

That projected deficit is mainly a result of low oil prices and fewer people driving and renewing licenses because of measures to slow the spread of COVID-19, Secretary of the Office of Policy and Management Melissa McCaw wrote in the memo. 

Oil company taxes were projected to see the biggest decline, coming in at $255 million for the year, 21 percent below the budgeted amount of $322.9 million. The motor fuels tax was projected to be 4.5 percent, or $23.3 million below the budget and the sales and use tax contribution to the transportation fund was projected to be down 5.9 percent, or $24.6 million below the budget. 

But Connecticut’s “passive” approach to planning highway projects could put it in a better position to weather the funding decline than other states, said Don Shubert, president of the Connecticut Construction Industries Association.

“When you’re running an aggressive program and funding starts drying up, you’re in big trouble right away,” Shubert said.

Despite the projected deficit for this year, the transportation fund would still have a balance of $184.4 million at the end of June. With federal aid that state transportation departments have been clamoring for in Washington, that could allow Connecticut to “sneak right through this,” Shubert said.

Federal dollars

Transportation dollars will be an issue in Washington, too, as transportation groups push for federal aid to state transportation departments.

This month, the American Association of State Highway and Transportation Officials asked Congress for $50 billion in relief funding for state transportation departments to make up for drops in fuel tax revenue. The association projects 30 percent declines in state transportation revenue across the country over the next 18 months, amounting to about $50 billion.

“If they get that money, you’re not even going to feel a bump in the road in Connecticut,” Shubert said.

That plan mirrors part of the last federal aid package Congress approved in late March, which included $150 billion to cover COVID-driven revenue shortfalls in state, local and tribal governments, including about $1.4 billion to Connecticut. The package also included $25 billion for public transit agencies and $10 billion for airports.

Jim Tyman, executive director of the association, said that the federal government should do the same for state transportation departments – put a backstop on the revenue loss so that states can go ahead with the projects planned for this spring and summer. 

Along with keeping state construction projects on track, Tyman said the stimulus would keep people working on those job sites and across the supply chains that feed infrastructure work. That’s why the plan has the backing of some state transportation departments and industry groups of engineers, contractors, pavers and limestone producers.

In the meantime, despite the funding concerns brought by the drop in traffic, Connecticut is making an effort to be more aggressive with highway construction while the roads are less congested.

No projects have been pushed up, but the department is starting off the construction season by finishing off projects left from last year and ticking off the next projects in the long-term construction plan. 

The main effect is that they’re able to close more lanes for longer than originally planned, and without causing traffic backups, Nursick said. That could mean quicker work on projects like the median guardrail replacement on I-395 between Montville and Norwich.

“Ultimately, will we have gotten more done or been more efficient? It’s hard to say, because we don’t know what’s going to be taking place with supply chains and the workforce,” he said.