Hartford Business Journal

24 Hartford Business Journal • February 5, 2018 • www.HartfordBusiness.com EDITOR'S TAKE Toll locations will be key to debate L ocation, location, location is often a man- tra used by real estate agents, but as the clarion calls for Connecticut highway tolls get louder, the motto will be just as pertinent to the state's transportation funding debate. Key Democratic state lawmakers and Gov. Dannel P. Malloy last week made it clear they plan to propose and force a vote on a bill that would adopt statewide tolling, which some business leaders and others are beginning to warm up to given the state's transportation funding shortage. In fact, 47 percent of Connecticut drivers said they support interstate highway tolls, according to a recent AAA survey of nearly 1,000 motorists. While that may be true in a general sense, once the conversation shifts to toll locations, the political tea leaves may shift. That's because many supporters favor the idea of border tolls that would primar- ily tax New York and Massachusetts residents who work in or visit Connecticut. But border tolls may not be legally feasible, according to a 2015 report by consultancy CDM Smith, which said the Federal Highway Administration likely wouldn't approve them since they may violate the federal Interstate Commerce Clause. If that's true, tolls would have to be spread across the state to raise enough money to make an impact. Indeed, most pro-toll legislators are favoring a "state- wide" toll approach and numerous studies commissioned in recent years have recommended the same thing. The Transportation Finance Panel, for example, in 2016 recommended tolling in three main corridors: I-84 from New York to Hartford; I-95/Route 15 from New York to New Haven; and I-95 from New Haven to Rhode Island. That plan, along with several other options, would net the state $18.3 billion over 20 years, but it's estimated only 30 per- cent of that revenue would come from out-of-state drivers. Here's a potential risk: At a time when the state is trying to revive its cities, adding tolls at their respective borders would seem to be a counterproductive exercise, giving residents and employers an added excuse to avoid urban cores. It's already costly to visit or operate a company in Hartford. Think of parking, for example, where some visitors are forced to ante up $10 (or sometimes more) to attend an event downtown. Now add a few extra dollars in toll payments (that is a random estimate, but even if it's a bit high to start, toll costs will only rise once lawmakers agree to install them), and visitors are already paying the cost of an entree before they step foot into one of the city's restaurants. For employers and workers in Hartford, the added costs would be a nuisance. On average, there are 260 workdays in a year. If tolls cost a worker even a mere $1 to $2 daily, you are talking about a $260 to $520 annual tax to work in Hart- ford. At a time when downtown Hartford's office vacancy rate still hovers near 20 percent, making it more expensive to come downtown is counterintuitive. And there is some evidence that tolls have negatively impacted communities where they are located. A 2015 economist's report, for example, found that the implementation of tolls and tunnel closures in Portsmouth, Va., had a "substan- tially negative" impact, leading to fewer vehicles moving through that city and a corresponding decline in sales tax collections. If Connecticut does reinstate tolls, some may argue that Hartford area drivers should shoulder some of the burden. It's actually a legitimate gripe, given the fact that one of the state's most expensive projects in the pipeline is the replacement of the I-84 Hartford viaduct, which carries a price tag as high as $12 billion. Others may say the addition of tolls in or near the Capital City would ease congestion and encourage wider use of public transportation, which could be a positive benefit. But lawmakers' ability to adopt tolls will likely depend, in part, on ways they can mitigate some of the costs to in-state commuters. Congestion pricing methods (charging drivers different rates at different times of the day) or rebate programs are options to negate some of the negative effects. If border tolls were a possibility, tolls would be an easier sell. Given that's less likely, and it's an election year, the toll debate faces a bumpy road ahead. OTHER VOICES Unsurprisingly, CEO commission attacks working people By Lori Pelletier I t has become a tired bit of hyperbole that state workers are the cause of all of Connecticut's budget problems. But that's what the Hartford Busi- ness Journal ("Business influence will be tested in legislature") says is the problem in the state and they hope the newly formed Commission on Fiscal Stability and Economic Growth will heed their call to under- mine state workers' earned retire- ment security. Even though it's politically popular to go after state workers and their medical and retirement benefits, the attacks are usually far off the mark. First, pensions for average retired state employees are around $30,000 per year and dropping — hardly a king's ransom and far less than the millions handed out as corporate welfare that receive far less scrutiny. Of course, extremist, anti-worker fringe groups like the Yankee Institute will highlight the outliers in the system but they do not represent the benefits of the average state worker. Second, 82 percent of the payment into the state employee pension fund was to make up for contributions not made in the past or lost investment earnings, and had nothing to do with today's state workforce. The Hartford Business Journal can be credited for recognizing that there has been a legacy of gover- nors and legislatures kicking the can down the road when it comes to funding the state's pension plan. In fact, for 32 years, the legislature put away zero dollars. And even after that, they spent the next several de- cades contributing less than actuari- ally required. Gov. Dannel P. Malloy is the first governor in our state's history to fully fund the pension at the actuarially required amounts. Finally, it is important to point out that pensions play an important role in Connecticut's economy by sup- porting jobs and generating purchas- ing power in our communities. In 2014, expenditures stem- ming from state and local pensions supported 33,792 jobs, $5.4 billion in total economic output, and $1.3 billion in federal, state and local tax revenues. The bottom line is that pensions in the state lead to an enor- mous amount of economic growth and to cut them would be penny wise and pound foolish. It is somewhat ironic that in the same week the Commission is hearing proposals to cut middle class benefits, Oxfam International releases a report that more than $8 of every $10 of wealth created last year went to the richest 1 percent. And yet on this commission, we have many members of the 1 percent ask- ing for presentations about how to take away working people's ability to negotiate their benefits so more wealth can be concentrated in even fewer hands. Not exactly a prescription for eco- nomic growth. Since the Commission is mostly made up of high-level business execu- tives, why don't they concentrate on issues that will bolster both businesses and workers in the state? They can look at how irresponsible employers misclassify workers as independent contractors so they can circumvent our labor laws in order to be awarded as the lowest bidder on public works projects. This hurts workers and prevents honest employers from being able to compete on a level playing field. Or they can look at how some employers pay their workers so little, they enroll in HUSKY, apply for food stamps, claim the earned income tax credit, seek out childcare subsidies and obtain other methods of public assistance. These companies yield tremendous profits and pay their CEOs astronomical bonuses while taxpayers foot the bill. They should also focus on pushing the legislature to make significant investments in the state's deterio- rating infrastructure, and invest in education and training programs so we can prepare today's workers for tomorrow's jobs. Connecticut needs solutions, not just another round of attacks on working people. We hope this Com- mission will deliver, but we won't hold our breath. Lori J. Pelletier is the president of the Connecticut AFL-CIO, which represents more than 220,000 public and private sector workers. Opinion & Commentary Greg Bordonaro Editor Lori Pelletier

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