Transportation Funding Overview

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Transportation Funding Overview

• Governors Commission on the Reform of the
  Department of Transportation
• October 29, 2007

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Connecticuts Spending Cap
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Origin Of The Expenditure Cap
Growth In State Spending

• Part of income tax compromise in 1991
• Statutory and constitutional spending
• Goal Restrain spending and avoid future
  budgetary crisis, such as necessitated the income
  tax
• The spending cap has been effective
• In the 14 years prior to the expenditure cap, the
  states budget grew by 9.6 per year.
• Since enactment of the cap, the budget growth
  rate has been cut almost in half.

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Spending Cap Defined

• Appropriations Cap
• Applied to total appropriations, not each fund
• Limits total appropriations (all funds) based
  upon one of two major economic variables
• The 5 year average growth in Connecticut personal
  income or
• Annual growth of the Consumer Price Index,
  whichever is greater
• Can only be exceeded if the Governor declares an
  emergency or the existence of extraordinary
  circumstances and three-fifths of each house of
  the General Assembly concurs

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Funds Included Under The Expenditure Cap
General Fund Special Transportation
Fund Mashantucket Pequot Mohegan
Fund Soldiers, Sailors Marines Fund Regional
Market Operating Fund Banking Fund Insurance
Fund Public Utility Control Fund Workers
Compensation Fund Criminal Injuries Compensation
Fund
Expenditure Cap
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Spending Outside The Expenditure Cap

• Certain Types of Expenditures are exempted from
  the Expenditure Cap
• Interest and principal on state debt
• First Year Expenditures for new federal mandates
  and court orders
• Statutory Grants to distressed municipalities
  that were in effect in 1991

Outside the Expenditure Cap
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Spending Cap Growth Rates
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Special Transportation Fund

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STF History

• Current STF Created in 1984
• Dedicated Fund
• Appropriated Fund
• Subject to the Spending Cap
• Serves as the the funding vehicle for
  transportation operating AND capital programs

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STF Revenues

• Motor Fuel Tax
• Motor Vehicle Receipts
• Licenses, Permits and Fees
• Interest Income
• DMV Collected Sales Tax
• General Fund Transfers
• Petroleum Gross Receipts Tax

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STF Revenues 1985-2007

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Gasoline Tax Rates 1985-2007

13
Annual Growth of Motor Fuels Tax Collections
1999-2007
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Growth of STF Revenues and Expenditures
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STF Revenues, Expenditures and Balance FY 2006
FY 2012
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Historic STF Uses

• DOT Operating Expenses
• Pensions and Fringe Benefits
• DMV Operations (FY 1992)
• Highway Patrol Operations (FY 1994-1999)
• Town Aid Road Grants
• Bonding
• General Obligation Bonds
• Special Tax Obligation (STO) Bonds

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Special Tax Obligation (STO)Bonds

• Revenue Bonds
• 2.7 Billion Outstanding
• 250 Million planned for sale in October
• Supported by Transportation Fund Revenue
• Revenue Intercepts
• Covenants
• Coverage 2X Debt Service
• Balanced Budget

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GARVEE Bonds

• Revenue Bonds
• Pledged Revenues are future federal funding
• Allows projects to be expedited by making funds
  available sooner
• Reduces federal funding available in the future.
• 2006 state legislation authorized issuance of
  GARVEE bonds
• None have been issued as yet

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Recent Transportation Initiatives

• 2005 Transportation Bill
• 1.3 Billion in rail, bus and highway initiatives
• Funded through increase in Gross Receipts Tax
  (GRT) and increased transfer from the General
  Fund
• 2006 Transportation Bill
• 1 Billion in State Funding
• Funded through increased transfer of GRT from the
  General Fund
• 1.3 Billion in potential GARVEE Bonds
• Supported by Future Federal Revenues