[Update 5/13: Gov. Malloy and state unions have reportedly reached a tentative deal, with details to be announced today.]

The Connecticut General Assembly passed its $40.2 billion two-year budget, which Governor Malloy signed, earlier this week.  While it remains to be seen whether $1 billion in state employee concessions will be reached to balance the budget, the budget does continue the Governor’s trend of supporting transportation investment.

Special Transportation Fund

The biggest transportation news in the budget was the withdrawal of a proposed three-cent gas tax increase to help fund the Special Transportation Fund (STF), which pays for day-to-day transportation operations and finances capital projects. Wary of increasing the cost of gasoline as prices have risen, lawmakers removed the increase at the last minute in order to ensure the budget’s passage. But the budget dedicates other revenues to the Special Transportation Fund, which is expected to see a nearly 11% increase in funding over last year.

A three-cent inventory tax on each gallon of diesel fuel was included, and is expected to generate upwards of $10 million. The budget also increased motor vehicle fees on registrations and driver’s licenses, among other items, with $13 million earmarked for the STF. Nearly $8 million in other fees are to be directed to the STF as well. Finally, the budget increased the annual transfers from the General Fund to the Transportation Fund by $186.8 million over the next four years (Table 10.), transfers that are dedicated from revenue generated by the state’s Gross Receipts Tax.

Spending and Policy

Much of the budget hinges on the Governor arriving at a deal with the state’s labor unions on $1 billion in concessions.  As an alternative, the Governor has released a ‘Plan B’ budget that identifies $1.6 billion in possible cuts, and could be devastating to Connecticut transit riders. It includes:

• Rail and bus fare increases;
• Elimination of Hartford Express Bus service;
• Elimination of Shore Line East and the Metro-North Branch lines and;
• Elimination of Town Aid for Road grants.

If “Plan B” doesn’t go through, bus and rail service will receive $274 million and $301 million, respectively, over the two year budget.  These are only marginal increases in operational funds from last year’s allocation and may not be able to support an expected jump in ridership, as has been seen in other parts of the country as gas prices have risen.

The Governor’s direction of the State’s transportation strategy will become even greater since the budget de-funded the Transportation Strategy Board, and removed its power to recommend transportation projects to the General Assembly. The bill now directs the Governor to submit recommendations and a financing plan to implement the state’s long-term transportation strategy.

Big Decisions Still to Come

Governor Malloy has gotten off to a fast start in supporting sustainable transportation initiatives, but it remains to be seen if he will continue to use these new revenues to increase investment in road and bridge maintenance, transit, and bicycle and pedestrian infrastructure, or shift to a business as usual approach and use the funds for wasteful road expansion projects like Route 11, as he has expressed an interest in doing.

In the meantime, advocates are waiting eagerly for the Governor’s decision on a new ConnDOT commissioner, an action that will give the clearest picture of the path he’ll be taking on transportation.

Image: Shore Line East train in New Haven. / Adam E. Moreira.