Hartford Business Journal

www.HartfordBusiness.com • October 9, 2017 • Hartford Business Journal 11 FOCUS CT's transportation infrastructure needs grow as funding ebbs Q&A talks with Don Shubert of the Connecticut Construction In- dustries Association, which recently released a report calling for greater investment in the state's transportation infrastructure. Q. The Connecticut Construction In- dustries Association recently released a report criticizing plans by the legisla- ture to cap annual transportation bond- ing at $700 million. How much should the state invest annually and where should that money be spent? A. According to the existing plans and forecasts, bond authorizations are currently at $1.3 billion per year and are on track to increase up to nearly $1.5 billion annually in 2020. The state should be investing an average of $2 billion per year to sustain the current systems, and $3 billion annually to have a first-in-class transportation system, according to estimates prepared by the state Department of Transportation (DOT) for the Let's Go CT transportation investment initiative. The money is going to have to be spent across all modes of transportation. A vast number of Connecticut's roads, bridges and transit systems are aging and operating over the designed capacity at the same time. Q. If you were to prioritize CT's transpor- tation infrastructure needs what are the most pressing needs? A. Maintaining the current systems in a state of good repair is the best place to start and it has public support. In 2014, DOT conducted a comprehen- sive survey of travelers in the state, which found that a higher percentage of the 1,000 participants favored maintaining highway infrastructure than any of the other 12 choices. The responses also favored keeping the transportation system in good order. The challenges facing Connecticut's transportation network are numerous and significant. For example, ConnDOT estimates that repairing or replacing four key rail bridges in the state will cost over $3 billion. The number of structurally deficient and functionally obsolete roadway bridges in the state is well over the national average. And 57 percent of Connecticut's roadways eligible for federal aid are rated "not ac- ceptable," the second highest percentage in all 50 states. Q. The state will have fiscal constraints for years to come. How should the state raise additional revenues for transporta- tion when the current funding sources will be severely constrained? A. In the near future, the state will have to consider incorporating other revenue sources and innovative financing tools to sustain infrastructure investment. In January of 2016, a panel of transporta- tion experts in Connecticut issued a report that contained a menu of recommenda- tions for funding sources. The list included traditional sources, such as motor vehicle receipts, taxes, permits, fees, gasoline tax and the sales tax. It also included other sources, such as tolling, advertising and value capture. There is no single source that can cover the entire program. It is going to take a combination of revenue streams to meet the state's future mobility needs. Research shows broad support for raising transportation revenues. A recent survey conducted by HNTB found that 84 percent of Americans are willing to pay increases if the funds are guaranteed by law for use only toward infrastructure. Q. The report talks about how fully fund- ing transportation infrastructure would benefit Connecticut's key industries — healthcare/bioscience, insurance and financial services, advanced manufactur- ing, digital media, tourism and green technologies? How is that the case? A. Transportation investment impacts these sectors in two ways. The first is through the actual construction activity itself — contractors, designers and others that work on these projects will increase their demand for inputs and materials. Their employees will also increase demand for general goods and services throughout the economy. The second impact is the productivity in- creases and benefits to these sectors because of greater mobility and lower transportation costs. As roads, bridges and transit systems are improved, there are a variety of benefits for the users of the system. Those benefits include more opportunities for workers, and the ability to recruit from a larger pool of potential workers for employers. Businesses will benefit from more customers, reduced production costs, an increased demand for outputs, intra-industry linkages, and ag - glomeration economies. Q. The report said the overall business en- vironment in the United States is changing, and there is likely to be a greater impor- tance placed on logistics and global trans- portation networks. Why is that the case? A. There have been major changes to the U.S. economy in recent decades in the field of logistics. Our nation's highways have become warehouses as businesses shift to just-in-time delivery and lower invento- ries. The rise of e-commerce and overall economic growth means more goods are being shipped, and about three-quarters of those goods are moved by truck. The value of total truck freight ship- ments on Connecticut roads is expected to increase from $247.3 billion in 2015 to $372.8 billion in 2040. Intermodal connec- tions between our ports, railways, airports and highway system are crucial to facili- tating economic growth and ensuring the movement of goods and services. Don Shubert President, Connecticut Construction Industries Association 1 Oxford HMO products are underwritten by Oxford Health Plans (CT), Inc. Oxford insurance products are underwritten by Oxford Health Insurance, Inc. 2 UnitedHealthcare Service Statistics average for Connecticut, New York and New Jersey Oxford plan members from Jan. 1, 2016, through Dec. 31, 2016, based upon United Experience Surveys. Source: Internal Consumer and Customer Call Center Metrics. 3 Based on an analysis of Oxford Freedom Network plans in Connecticut compared to Oxford Liberty Network plans in Connecticut. Savings varies by county. 4 Not available with Connecticut Liberty Network HSA plans. MT1154122.0 Oxford Health Plans LLC. All rights reserved. CT-17-547 17-5325 Choose Oxford for stability, competitive rates and local expertise. Get an Oxford quote today. Visit uhc.com/StabilityCT or contact your broker. 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