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October 16, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Proposed Connecticut Infrastructure Bank could unlock ‘billions, if not trillions’ of private capital dollars

As debate continues to swirl over the possibility of tolls returning to Connecticut, state Sen. Alex Bergstein is busy gathering support for a bill that would create a Connecticut Infrastructure Bank to fund public/private improvements to the state’s transportation infrastructure.

The bank proposed by SB 70, which the Greenwich-based senator introduced in January, would “finance a loan program with funds appropriated from the Special Transportation

Fund (STF) or other sources of revenue designated for infrastructure improvements, including potential future streams of revenue from electronic tolls, and leveraged with private debt capital through the issuance of bonds or other financing arrangements for eligible infrastructure projects including, but not limited to, the building, renovation and repair of highways, bridges, railroads, waterways, ports and airports.”

The mere mention of tolls has set off alarm bells among some legislators – especially in light of Gov. Ned Lamont’s Feb. 16 announcement that, instead of tolling only tractor-trailers as he originally outlined during his gubernatorial campaign, “the truck-only option provides too little revenue, too slowly and too piecemeal to make a meaningful difference.” As a result, he said, he would entertain congestion-pricing as well as other measures for discounting tolls for state residents – but some toll would likely be involved for drivers of all vehicles.

But Bergstein – who has also proposed SB 102, which would require the commissioner of transportation to establish electronic tolls on major highways, with a portion of the proceeds to go to the state infrastructure bank – insisted to the Business Journal that SB 70 and SB 102 are very different creatures.

“Electronic tolls is a separate bill,” she declared. “You do not have to have electronic tolls to have an infrastructure bank.”

The language in SB 70 has raised the objections of many Republican lawmakers, who have long opposed tolls of any kind.

Senate Republican President Pro Tempore Len Fasano has said he does not expect any of the 13 Senate Republicans to vote for a toll proposal of any kind. He prefers instead that Lamont follow his party’s “Prioritize Progress” plan, which would borrow $65 billion over 30 years for transportation infrastructure projects without instituting tolls or a tax increase.

Bergstein has engaged in a war of words with her fellow Greenwich legislator, Republican Rep. Fred Camillo, via op-eds over tolls. “Tolls are taxes and we have enough of those in Connecticut,” Camillo wrote, adding that last year the General Assembly “made large contributions to the STF without resorting to tolls. We did this by making smart decisions with the revenue that we have. We lived within our means and we can do it again.”

Bergstein told the Business Journal SB 70 would allow for plenty of non-toll investments. Funds could come from such sources as docking and landing fees, parking fees and hotel occupancy fees, she said. “This is something that should not be conflated with tolls,” she said.

Bergstein presided over a Feb. 14 public hearing for the bill that “went really well,” she said, noting that various other countries in Europe and Asia, as well as Canada, have established infrastructure banks in the past.

Among the finance, infrastructure and environmental experts who testified in favor of the bill during the hearing was Suneel Kamlani, the former CEO of markets at the Royal Bank of Scotland and the former chief operating officer of UBS Investment Bank, who said the proposed bank “would unlock access to over $80 trillion of capital controlled by institutional investors,” and that such a bank “would have a multiplier effect on state funding, leveraging every dollar 5 to 10 times with private debt capital.”

David Sutherland of The Nature Conservancy said the bank could be utilized to help fight the effects of global climate change and rising sea levels. Others testifying in support of the bill included: Melissa Kaplan-Macey, vice president, state programs and Connecticut director, Regional Plan Association; Jeff Diehl, CEO, Rhode Island Infrastructure Bank; and Bryan Garcia, CEO of Connecticut Green Bank, which Bergstein said could share some services and space with the Infrastructure Bank, “so that we would not have to build something entirely from scratch. If people are concerned about the startup costs, I think they will be negligible.”

Despite the tolls/no tolls argument, Bergstein said she was confident that SB 70 will pass this year.