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For Connecticut businesses, tolls like a ‘double-edged sword’

Consensus eludes Connecticut businesses on highway tolling, one of the biggest issues in the legislature.
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Consensus eludes Connecticut businesses on highway tolling, one of the biggest issues in the legislature.
Author

A lack of consensus on tolls among Connecticut’s businesses has sidelined significant private-sector players in one of the biggest debates in the General Assembly.

Business groups advocating for manufacturers, financial services and other industries that find unanimity among their members on workplace mandates and other issues see little clarity on tolls. Like others in Connecticut, businesses know money is needed to repair and upgrade highways, bridges and other public works to drive economic growth.

But they balk at supporting a potentially costly tolling system as the primary source of funding.

Gov. Ned Lamont and other supporters of tolls are seeking to enlist business in selling his tolling plan to the legislature.

“I need the help from the business community and I need the help from the labor community as we try to get this over the finish line,” the governor told a breakfast audience at a MetroHartford Alliance meeting in February.

Paul Lavoie, head of the legislative committee of the Central Connecticut Chambers of Commerce, which is waiting for specific tolling legislation to emerge in the General Assembly before taking a position, called tolls a “double-edged sword.”

“We’re very concerned about improving infrastructure for workforce development. We have a need for people to get to work,” he said. “On the other hand, tolls are another expense.”

The Danbury Chamber of Commerce, specifically its legislative committee, opposes tolls.

“Where are they going to turn around next to get revenue?” said P.J. Prunty, president of the organization. “We understand this is a challenging burden. But putting it on the backs of businesses is not the solution.”

He also said businesses see tolls as another tax in a state that’s not competitive with neighbors that impose fewer fees.

“We hear that other states on the Eastern Seaboard have tolls. New York does not a have property tax on cars,” Prunty said.

In addition to the Central Connecticut Chambers of Commerce, business groups that have not taken a position on tolls include the New Haven Manufacturers Association; the Connecticut Business and Industry Association, the state’s largest business group; and the National Federation of Independent Business, which represents small businesses.

Likewise, MetroHartford Alliance, the capital region’s chamber of commerce and economic development advocate, has not “solidified any position” on tolls, a spokesman said.

The Middlesex Chamber of Commerce will soon recommend a position on tolls for a vote by its members, said Larry McHugh, the group’s president. “We’ve got people on both sides of the issue,” he said.

The Business Council of Fairfield County and legislative committee of the Chamber of Commerce of Eastern Connecticut have endorsed tolls.

Consensus is elusive as businesses face unanswered questions such as the extent of discounts for Connecticut motorists and the distance between gantries that would determine the cost of tolls, said Joe Brennan, president of the Connecticut Business and Industry Association.

Calculating the cost is impossible, too. Brennan cited a Fairfield County business owner who is balancing estimated expenses related to tolls with the cost of lost productivity of drivers sitting in traffic on I-95.

“It’s been a difficult issue to find a balance,” he said.

Jamison Scott, executive director of the New Haven Manufacturers Association, said tolls will have an “immediate adverse effect on commerce” and contribute to higher costs for business and consumers.

“Yes, we have a serious transportation issue in the state,” he said. “We also have a serious spending issue as well as debt issue.”

Joseph McGee, vice president of the Business Council of Fairfield County, said the group backs tolls to promote economic growth and workforce development. The region’s notorious traffic woes have “created a tremendous problem” expanding the local labor force, he said.

“You can’t be for economic growth without improving transportation and the only way is tolling,” McGee said. “Business organizations need to step up.”

Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, a region with a significant tourism industry and manufacturers that include submarine maker Electric Boat, said the decision to back tolls was difficult. But paying to use highways is necessary to improve public works, he said.

“There are documented situations where people have literally sat in traffic for hours with young children. The first thing they’ll tell you is, ‘I’ll never come back to Connecticut,'” Sheridan said.

The legislature’s transportation committee on March 20 approved three bills related to tolling, including Senate legislation directing the state Department of Transportation to draw up a plan to place electronic tolls along I-95, I-91, I-84 and Route 15. That plan requires federal approval.

Even if one measure is enacted into law this year, establishing tolls is a lengthy process and motorists would likely not start paying until at least 2023.

Lamont and fellow Democrats in the legislature say revenue estimated at $800 million a year captured by information collected by 53 gantries across the state is critical.

Tolling’s supporters say as much as 40 percent would be paid by out-of-state motorists and that Connecticut should no longer give drivers from other states a free ride.

Sen. Alex Bergstein, a Greenwich Democrat who strongly supports tolls, said businesses across the spectrum tell her they favor tolls “because they understand we need a new source of revenue.” She cited communications, real estate developers and finance.

“We need a major upgrade of infrastructure to bring in new businesses, new residents, new taxpayers,” Bergstein said.

Sen. Len Fasano of North Haven, the Senate’s Republican leader, said he hears from small business owners who are “very much opposed to tolls.”

Rep. Themis Klarides of Derby, leader of the minority House Republicans who oppose tolls, said businesses and others who favor the Democrats’ approach “believe tolls are the only option.”

“It’s a myth and a fallacy,” she said.

For example, Republicans have proposed a set amount of bond funding solely for transportation while staying under the $2 billion annual bonding limit.

Opponents say before new revenue is generated for transportation projects, the state should take a close look at what it’s spending and how priorities are set. They also cite Connecticut’s already high cost of living and say that tolls would have a disproportionate impact on low-income drivers.

Tax hikes enacted by then-Gov. Dannel P. Malloy and the Democratic-led legislature in 2011 and 2015 may also undermine business support for tolls.

“Two large tax increases and others make people aware of the costs,” Brennan said. “It makes it difficult to get support from businesses and individuals.”

Lavoie, of the Central Connecticut Chambers of Commerce and general manager of Carey Manufacturing Inc., a Cromwell manufacturer of catches, latches and handles, said tolls can’t be viewed separately from other legislation opposed by business: a $15 minimum wage, up from the current $10.10 an hour, and paid family and medical leave financed by a half-percent payroll tax.

“The burden from this legislative session will be staggering,” he said.

Stephen Singer can be reached at ssinger@courant.com.