Funding CT2030

CT2030 Finances: $21.04 Billion

For too long, Connecticut has relied on in-state taxes, fees and the state’s credit card to fund and finance investments in transportation infrastructure. CT2030 leverages new funding and financing sources as well as Connecticut DOT efficiencies to deliver the highest possible return on investment at the lowest possible cost to Connecticut residents. By bringing in out-of-state funding and pursuing smart federal financing opportunities, we can dramatically reduce the cost of projects to Connecticut taxpayers

CT2030 is a vital opportunity to put federal and other out-of-state revenue to work for Connecticut.

CT2030 doesn’t only transform Connecticut’s infrastructure–it transforms the ways infrastructure projects are paid for.

Funding1

Federal Grants

The U.S. Department of Transportation provides Connecticut with up to $750 million in federal funds each year for highway and transit programs, provided the state contributes its own matching funds and maintains a state of good repair. These funds predominantly include apportionments and grants and are separate from federal loans. CT2030 preserves the full $750 million in federal funds, separate from any federal loans.

Special Transportation Fund

The STF is a separate account dedicated to improving Connecticut’s transportation infrastructure and paying for operating costs at our Departments of Transportation and Motor Vehicles, such as snowplowing and bus and rail service. Revenues deposited in the STF come from fuel taxes, transportation-related fees and fines, a portion of the general sales tax, and a portion of the car sales tax. To accelerate those revenues, CT2030 transfers 100% of car sales taxes to the STF by 2023, consistent with recently enacted budgets. Currently, the STF is on a path to steep and growing deficits – CT2030’s financing and funding package provides solvency and health to the STF, including a 15% reserve fund, without increasing sales and income taxes.

Targeted Borrowing & Smart Financing

Currently, Connecticut’s infrastructure projects are financed primarily through Special Tax Obligation (STO) bonds. CT2030 diversifies the state’s overall infrastructure financing plan to include:

  • Standard STO bonds, at a reduced level
  • Loans from the U.S. Department of Transportation’s Build America Bureau. Those loans, which can be accessed by pledging a dedicated funding source like user fees, offer lower interest rates and stronger repayment terms, at no more total cost to the state
    • Transportation Infrastructure Finance & Innovation Act (TIFIA) loans finance bridges and tunnels) at rates around 2% for urban projects and below 1% for rural projects
    • Railroad Rehabilitation & Improvement Financing (RRIF) loans finance rail infrastructure
  • Cash financing of some projects consistent with nationally benchmarked data and best practices
  • Added support from Connecticut’s General Fund through General Obligation (GO) bonds consistent with the Governor’s commitment to reducing the state’s bonding levels
User Fees

CT2030 increases connectivity and replaces or rehabilitates several of our largest and most at-risk bridges and crossings. Rather than delay construction and burden CT taxpayers with the total cost of improvements plus interest, fourteen CT 2030 projects will be funded by the implementation of a new and modest user fee program beginning in 2023. Roughly 40% of those user fees will be paid by out-of-state drivers, and still more will come from the heavy trucks that do the most damage to our roads.

The user fees provide the U.S. Department of Transportation’s Build America Bureau and our own residents and businesses a guarantee that we can fund our investments without increasing taxes.

Here’s how it works:

  • User fees are collected through an overhead electronic, high-speed gantry system—no toll booths, reduced speeds or congestion
  • Base user fee rates range from $0.50 – $1.00 for cars, $1.25 – $2.50 for medium sized trucks and $3.50 – $7.00 for heavy trucks
  • Base user fee rates are the rates that most out-of-state drivers with a transponder (e.g. EZ-Pass) will pay
  • Base user fee rates are lower than the average rates for most bridge user fee facilities around the country, including neighboring states and the greater Northeast region
  • The heavy tractor-trailer trucks that significantly wear and tear our bridges will pay seven times more than the base car rate, which is comparable to the regional average
  • Cars and trucks with a Connecticut issued transponder will receive a 20% discount off the base rate:
    • Cars with CT transponders will pay $0.40 – $0.80
    • Medium sized trucks with CT transponders will pay $1.00 – $2.00
    • Heavy trucks with CT transponders will pay $2.80 – $5.60
  • Within a 24 hour period, any vehicle equipped with a transponder will not pay more than one round-trip user fee per gantry
  • Commuters without a transponder will be billed by mail and pay a 25% – 50% higher rate than the base user fee rate, to cover the cost of mail service
  • User fees are fixed for the project period and will be capped for Connecticut passenger cars
  • Revenues go directly into the CT2030 transportation program to pay for the costs of the user fee bridges and to fund other needed transportation improvements in Connecticut, including eligible transportation improvements within affected municipalities for roads, bridges, transit, etc.
  • Federal law and our state constitution prevents all net user fee revenues from being diverted for any other purpose
  • Almost 40% of the user fee revenue is generated by out-of-state vehicles
  • 5% of revenues generated from user fees will be provided to the hosting municipality for infrastructure improvements

For more detailed information about the user fee projects themselves, please click here.