What is CT’s Special Transportation Fund?

Gabby DeBenedictis and Keith M. Phaneuf

For nearly four decades, Connecticut has designated a portion of its annual budget specifically to finance upgrades to its aging transportation infrastructure.

The Special Transportation Fund has evolved over this period, and while it continues to support capital projects it also pays for operating costs for the Departments of Transportation and Motor Vehicles, transit services, and part of the annual contribution to the state employees’ pension fund.

And while fuel taxes were the principal source of revenue for the STF throughout most of its history, sales tax receipts recently have supplanted them — albeit just barely.

Since 2022, the fund has generated large surpluses — even though legislators rejected Gov. Ned Lamont’s proposals in 2019 and 2020 to install electronic tolling on highways, which would have generated hundreds of millions of dollars annually. These surpluses have left some critics calling for cuts to fuel taxes, while others argue the DOT needs to increase production and launch significantly more construction projects than it currently oversees.

Here’s what to know.

What is the Special Transportation Fund?

The Special Transportation Fund, which is projected to spend $2.3 billion this fiscal year, represents nearly 9% of the state’s $26 billion budget.

Lawmakers created it in 1983 following the partial collapse of the Mianus River Bridge on I-95 in Greenwich earlier that year, which killed three people. The fund was designed to intensify the state’s focus on repairing aging transportation infrastructure.

Where does the money in the Special Transportation Fund come from?

Historically, the STF got most of its funds from two fuel taxes.

Motorists are familiar with the 25-cents-per-gallon, retail gasoline tax, which hasn’t changed since the mid-2000s.

Less known is the Petroleum Products Gross Receipts Tax, which charges 8.1% on wholesale transactions involving gasoline and other fuels. Another surcharge effectively raises that tax to 8.81%. But gas station owners have long conceded that they build this expense into the retail price, meaning consumers pay that as well.

This fiscal year, revenue from those taxes is projected to make up almost $864 million, or nearly 37% of the STF’s resources.

But in 2015, the legislature passed a law requiring that a portion of all sales tax receipts go to the STF. Those receipts have surged in recent years, particularly in 2022 when the national inflation rate hit a 40-year high. The sales tax is projected to provide 42% of the revenue for the transportation fund this fiscal year.

The rest of the STF’s revenue comes from a highway mileage tax on most commercial trucks, a DMV license and other fees, and other miscellaneous sources.

What is the money in the Special Transportation Fund used for?

Initially, the fund was used to pay debt service — principal and interest — on the bonds Connecticut sells on Wall Street to finance repairs, improvements and upgrades to highways, bridges and rail lines.

Currently, nearly $1 billion — over 40% — of the STF is used for that purpose.

The fund is now used to finance the operations of Connecticut’s Department of Transportation and Department of Motor Vehicles as well.

Almost $965 million of it covers the day-to-day operations of the DOT, including employee salaries and public transit programs involving bus services and rail lines. Another nearly $77.4 million covers the DMV’s operations, and $263 million pays for DOT and DMV employees’ pensions and other benefits.

How much of a surplus does the Special Transportation Fund currently have?

Despite the many initiatives it pays for, the Special Transportation Fund has generated large surpluses in recent years.

The fund finished the 2021-22 fiscal year with a $157 million or 9% surplus, according to reports from the comptroller’s office. That’s despite a gasoline tax holiday that put hundreds of millions of dollars back in motorists’ pockets.

In 2022-23 the fund ran up a $284 million surplus, equal to 15.5% of the transportation fund. And the Lamont administration estimates the fund closed the last fiscal year on June 30 up $277 million or 13%.

Final numbers for the 2023-24 fiscal year won’t be available until the comptroller’s office completes its audit in September.

What’s generating those surpluses?

The answer, at least in part, lies with the construction program.

For years, the DOT has anticipated borrowing more funds to fix highways, bridges and rail lines than it is ready to spend.

When the state borrows less for construction, it doesn’t have as much to repay out of the Special Transportation Fund.

Legislators have been tracking this issue for more than a decade.

A nonpartisan study delivered to lawmakers in 2010 found the department, facing staffing limitations, was struggling to finish projects on time and under budget.

And according to records from the state treasurer’s office, the more than $6.1 billion in transportation financing approved by the legislature and by the State Bond Commission has yet to be borrowed — presumably because the state isn’t ready to spend the money yet.

That backlog is seven times the total amount of transportation bonding the state issued last fiscal year.

And it’s more than two-and-a-half times the $2.25 billion transportation bonding backlog reported in the fall of 2010, when the General Assembly first began tracking this issue.

Critics fear the STF surpluses will keep growing and have renewed their call for gasoline and other tax cuts. But the Lamont administration insists big unused resources won’t be a problem again because a long-anticipated surge in the rebuilding of Connecticut’s aging infrastructure will take off this fiscal year.

Controversial Ledyard quarry plan getting another look

Lee Howard

Ledyard ― Gales Ferry residents are gearing up for another battle next month over a controversial proposed quarry operation at Mount Decatur.

Gales Ferry Intermodal’s third submission of its quarry proposal, which addresses some of the concerns residents expressed in a series of public hearings last winter that brought out as many as 200 people each time will be heard Sept 12 at 6 p.m. at Ledyard Middle School.

The new proposal offers some financial incentives to the town, 25 cents per cubic yard of material extracted from the site as “payment in lieu of taxes.” The plan didn’t estimate how much money the town would likely accrue from the operation, or over what time period.

Opponents of the resubmitted project, including members of the community group Citizens Alliance for Land Use, have argued that any monetary offer from Gales Ferry Intermodal is irrelevant when it comes to considering the quarry’s compliance with regulations. Other issues they say are left unaddressed include the loss of property value and the impact of stormwater runoff.

Backers say the quarry is necessary to supply the needs of the offshore wind industry, among others operations that require gravel.

During previous public hearings, only one member of the public, from out of town, spoke in favor of the quarry application. Opponents cited health dangers caused by silica dust, truck traffic, noise pollution from traffic and blasting, possible contamination of wells and the destruction of large portions of Mount Decatur, which contains the remnants of a War of 1812 fort.

Gales Ferry Intermodal would attempt to deal with silica dust by treating small particulates released by the operation with water, mitigating its ability to get into the air. But residents have argued the system isn’t foolproof and the dust, a known carcinogen, would still hurt affect the health of residents. Schools, a church and a day care center are among the facilities nearby.

“It is impossible to totally control silica contamination,” said Robin Hood Drive resident Markos W. Samos, who identified himself as a cancer researcher in a note to the commission. “Gales Ferry is a densely populated area, and the health impact will be catastrophic.”

One issue the commission will have to address is whether the application for a special use permit at the former Dow Chemical plant off Route 12 needs to fit in with the character of the immediate neighborhood.

Quarry proponents say this part of the town’s regulations is superseded by a new state law that essentially nullifies such language unless “clear and explicit physical standards for site work and structures” are specified.

New planner overseeing project for the town

The town has a new planning director overseeing the project, former Montville Town Planner Elizabeth Burdick.

Ledyard’s former planning director of planning, Juliet Hodge, was fired April 25 by Mayor Fred B. Allyn, according to a letter obtained by The Day.

Allyn did not return a call about why Hodge was fired. There was no reason for her firing listed in her termination letter, and Hodge could not be reached to comment.

This spring, Hodge had questioned whether quarrying is a permitted use for the site or if there is a possible wetlands issue with the project.

Burdick said that as the commission’s staff person, she felt it would be improper to make any public comments on the new application when a public hearing has been scheduled.

But an Aug. 6 memo from Burdick stated that certified soil scientist Robert C. Russo of CLA Engineers Inc. in Norwich had indicated in an Aug. 3 letter that he saw no “material difference” in the new plan and therefore no reason for another review by the Inland Wetlands panel. Burdick agreed with Russo’s assessment.

Gales Ferry resident Anne Roberts-Pierson, a steadfast opponent of the project, called the operation “an existential threat to the community” in a July 31 letter to the Planning and Zoning Commission. She also complained that “this quarry application keeps getting bigger and bigger, and changes keep being made,” and she believed the new application required further review by the wetlands commission.

Lynn Wilkinson of Terry Road was among several residents expressing concern about the proposal on the town website before next month’s hearing.

“As I live within a mile of the site, I believe my family's health would be at risk due to air and noise pollution,” Wilkinson said in a letter. “As someone who uses the Thames River for recreation, I believe there would be adverse impact on the ecology. Several once-endangered bird species seem to be thriving, and I frequently see people fishing and swimming in the coves. I feel that a multi-year quarrying operation would be detrimental to the environment, and therefore to our quality of life.”

Roberts-Pierson said the argument about neighborhood character is essential. In an email Friday, she cited the quarry, along with the proposed 320-unit housing application on Military Highway, “the size and scale of which have never been seen in our town,” as radically changing the area’s way of life.

“We have a wonderful sense of place here in Ledyard, here in Gales Ferry,” she added. ”We are not only looking out for ourselves, our town, but for future residents.“

$107M coming to Norwalk for Route 7-Merritt interchange, school HVAC upgrades and more

Katherine Lutge

NORWALK — In front of his old elementary school, state Senator Bob Duff gathered with community members to celebrate the more than $107 million in state funding returning to Norwalk.

“Over the last two years, Norwalk has received over $300 million in state funding for the city of Norwalk,” Duff said outside Marvin Elementary School this week.

The majority of the funding, $69.1 million, is allocated to infrastructure projects, including $14.8 million to improve the Route 7 and Merritt Parkway interchange and $13.5 million for the Strawberry Hill Bridge construction.

“One of the most important aspects of what we’ve done over the last two years has been our ability to invest in our schools, both inside and outside of the classroom,” Duff said on Monday.

Several Norwalk schools, including Marvin Elementary, are finally getting HVAC systems, which Duff said will provide relief for students, staff and parents who often had to pick up their children early when temperatures were too high.

“You can’t educate students if they’re not comfortable… having clean air and having air-conditioned spaces is the least that we can provide for the people that work here and for the families that drop off their children,” said Sandra Faioes, deputy superintendent for Norwalk Public Schools.

In all, $21 million is going toward installing HVAC systems in Brien McMahon High School, Rowayton Elementary School, Naramake Elementary School, Marvin Elementary School, Brookside Elementary School, and Silvermine Elementary School.

Additionally, $1.9 million in state funds is being directed to 15 local nonprofits, including the Waterford Upstart Program, which aims to provide early education to children in Norwalk. With $375,000 of state funding, Norwalk’s Early Childhood Coordinator Mary Oster said young students will receive personal devices equipped with educational programs.

Dozens of community stakeholders gathered to celebrate the funding, emphasizing the importance of partnership between the city and community organizations.

“It’s a collaboration of people that care about Norwalk and want to do everything that we can to make sure that Norwalk is fully funded with various resources, allowing us to do the things that we might not otherwise be able to do,” said Mayor Harry Rilling.