Add Connecticut to the list of states looking for additional resources to finance growing infrastructure demands.
Estimated capital costs for transportation projects under construction or in the design phase in the state have grown to $6 billion from $4 billion, a 50% or $2 billion increase since 2000, with most of the increase seen since 2006, according to Connecticut's Department of Transportation.
Earlier this month the department released an updated report on budget planning for current and future capital transportation projects occurring within the next five years.
The report, which was requested by Gov. M. Jodi Rell, a Republican, looks at more than 20 projects that are either under construction or in the planning and design phases.
CDOT commissioner Joseph F. Mariein an Aug. 8 letter to Rell attributed the cost increases to "not always reliable" initial estimates that were projected far too early in the planning stage, as well as "unparalleled increases" in construction costs.
The largest increase in transportation costs for Connecticut is the for the New Haven Maintenance Facility Complex, which the state is planning to construct in order to maintain 300 new M8 rail cars for Metro-North's New Haven line.
According to the report, preliminary April 2006 engineering estimate costs for the rail yard facility were $662.1 million, but now the number stands at $1.2 billion - a $525.2 million jump.
DOT spokesman Judd Everhart said that an initial 2005 forecast had actually pegged the project at $300 million.
Rell has hired Hill International Inc. as a consultant to analyze the New Haven maintenance facility plan to determine whether any of the elements could be reduced or eliminated in order to trim the overall cost. Connecticut expects the consultant's study to be completed by October.
"I think everybody feels the project is important and needs to be completed," said Democratic Sen. Donald J. DeFronzo, co-chairman of the Transportation Committee. "I don't think we'll see huge savings [from the analysis], maybe some substantial savings, but I don't think the price will be cut in half."
After reviewing the study and any recommendations for reduced expenditures, the legislature plans to approve more bonding and request authorization of those bonds by the state's Bond Commission to issue additional special tax obligation bonds for the project, DeFronzo said. He hopes bonds will be issued by March 2009.
But with tax revenues used for the transportation fund declining, lawmakers are beginning to question just how Connecticut plans to pay for future debt for its transportation needs. The motor vehicle fuels tax represents 47% of revenue for Connecticut's transportation fund and officials estimate collections of that tax fell about 3% from fiscal 2007 to fiscal 2008.
While Connecticut anticipated about $1.13 billion in various tax revenues for the transportation fund in fiscal 2008, which ended June 30, it is only set to receive about $1.06 billion, according to legislative analysts.
Furthermore, Connecticut's Office of Fiscal Analysis estimates a $16.3 million operating deficit for the transportation fund for fiscal 2008 and a projected $125.2 million deficit by 2012.
Connecticut is also preparing itself for a decline in federal transportation funding. Roughly 80% of the state's highway funding comes from federal sources.
With $6 billion worth of projects in the design or construction phase, and additional $3 billion of projects in the planning phase, Connecticut has no small feat in drumming up finances. "We have a lot of irons in the fire," said Democratic Rep. David McCluskey, co-chairman of the Transportation Bonding Committee. "I'm not really sure whether the fund is going to have enough money."
McCluskey believes one solution to transportation funding lies in petroleum gross earnings tax revenues, which currently make up about 12% of the transportation fund. Instead of just a percentage of that revenue stream going into the transportation fund as it does now - about 45% currently does, while the remaining goes to the general fund - he thinks that all the revenue from the petroleum gross earnings tax should go into the fund.
"That would be a significant increase in the transportation funding, and I think that would allow us to bond and do what we need to do," McCluskey said. Still, he acknowledges that doing so may leave a hole in the general fund, especially considering the economic downturn the U.S. is facing.
DeFronzo also noted that when a transportation infrastructure plan is put forward, it's not uncommon for Connecticut to take five years to actually begin construction, which adds on rising construction costs each year the projects are delayed.
"We have a very disjointed planning process in Connecticut that we need to try to get a handle on," he said.