Deal to Close Connecticut Budget Gap Taps Sales Tax Funds for Transportation

AASHTO Journal, 20 May 2016

Connecticut lawmakers in the General Assembly passed an austerity budget for the fiscal year starting July 1 that closes a projected deficit with measures that include diverting a reported $50 million in transportation funds.

dollarpump.jpgThe House took action late on May 13, following earlier action by the Senate on a compromise plan that was struck with Gov. Dannel Malloy.

Malloy, who wants Connecticut to help fund a 30-year, $100 billion transportation investment program, agreed to reduce by $50 million the amount of sales tax receipts that are dedicated to transportation in the next fiscal year. That was part of an overall budget deal to close a deficit of nearly $1 billion without raising taxes.

The Connecticut Mirror reported that a Malloy spokesman said while the budget accord was it top priority, “that does not mean we are in any way less committed to transportation, or that our drive to transform our infrastructure has dropped one iota.”

Instead, he added, “we’re continuing to move forward with the planning and design of many, many projects.”

The Mirror story said the reduction in sales tax revenue for transportation will result in a $15 million drop for the year in spending “on smaller projects funded out of the budget – rather than financed.”

It added that the key to maintaining progress on project investments “is having enough funds in the budget — in the Special Transportation Fund in particular — to cover debt payments on all new state transportation bonds.”

Malloy had said in December that he would again seek legislative approval to put before voters a plan to protect transportation funds through a “lockbox” mechanism to prevent diversions for other budget needs.

However, that effort fell short for this year.

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