Connecticut Department of Transportation State of Transportation ACEC 2018

STF – Adopted Budget October 2017 The Connecticut General Assembly adopted a biennial budget in October 2017. That budget assumed a certain funding level from the STF that is no longer possible due to declining income to the fund. The previously adopted budget is now unable to support all of the anticipated capital investments and transportation services. The current budget will result in an annual operating budget deficit beginning later this year, leading to a $388 million cumulative deficit by 2022. Without additional income for the STF, the only way for DOT to balance the budget and enable the sale of transportation bonds is to reduce operating and capital expenses to match current STF income. The following service and fare proposals are DOT’s response to this funding shortfall. The governor has proposed and legislature may choose to address this funding shortfall in other ways. However, until additional STF income is found, DOT must take the proposed actions to balance the budget.

Problem Statement DOT does not control income for STF DOT does not control debt service capacity DOT does not control personnel/benefit expenses Without new income for STF, DOT had to propose reduction in operating and capital expenses SOLELY to sell bonds to pay bills in FY2018. Again, let me take a moment to underscore the importance of these corrective actions. The ability for the state to sell bonds and raise capital to repair bridges, purchase buses and rail cars, and pave highways, depends on a balanced budget. The current STF income levels are insufficient to both pay for current public transportation services and debt service. As a result, the DOT must reduce its operating expenses by reducing services and increasing fares in order to continue to sell bonds. If budget changes are not made, DOT would be unable to sell bonds and projects already underway would have to suspended indefinitely.

Final Budget Passed May 9, 2018 Dedication of New Car Sales Tax FY19 -- 8% ($29M increased revenue to STF) FY20 – 33% FY21 – 56% FY22 – 75% FY23 – 100% GO Bonds FY19 -- $250M GO Bonds FY20 -- $250M GO Bonds In closing, without additional income for the STF, the only option is for DOT to reduce expenses to match current STF income and ensure the STF is balanced. Let me be clear, the proposed service reductions and fare increases must take effect unless additional STF income is found. Again, the STF income is not controlled by DOT, but the Connecticut General Assembly. We would encourage you to speak with your representative to discuss your ideas to address these transportation funding challenges.

STF – Adopted Budget October 2017 The Connecticut General Assembly adopted a biennial budget in October 2017. That budget assumed a certain funding level from the STF that is no longer possible due to declining income to the fund. The previously adopted budget is now unable to support all of the anticipated capital investments and transportation services. The current budget will result in an annual operating budget deficit beginning later this year, leading to a $388 million cumulative deficit by 2022. Without additional income for the STF, the only way for DOT to balance the budget and enable the sale of transportation bonds is to reduce operating and capital expenses to match current STF income. The following service and fare proposals are DOT’s response to this funding shortfall. The governor has proposed and legislature may choose to address this funding shortfall in other ways. However, until additional STF income is found, DOT must take the proposed actions to balance the budget.

STF Forecast -- REVISED

FEDERAL HIGHWAY TRUST FUND

Impacts to DOT Predictable, growing state funding to sustain current services and “Ramp-Up” level of capital investment for 5 years FY19 Position funding restored (vacancies continue) Rest areas remain open PAYGO at $13.6M (no funding for MS4) No fare increases or service cuts Deferral of projects avoided STF “surplus” of $3.2M $1B “cap” in bonding in FY19 and FY20 Key uncertainty – Federal Funding In closing, without additional income for the STF, the only option is for DOT to reduce expenses to match current STF income and ensure the STF is balanced. Let me be clear, the proposed service reductions and fare increases must take effect unless additional STF income is found. Again, the STF income is not controlled by DOT, but the Connecticut General Assembly. We would encourage you to speak with your representative to discuss your ideas to address these transportation funding challenges.

CURRENT STATUS Lock Box Bond Commission actions Restarted projects and programs New 5-year Capital Program Preparing 5-year Operating budget strategy In closing, without additional income for the STF, the only option is for DOT to reduce expenses to match current STF income and ensure the STF is balanced. Let me be clear, the proposed service reductions and fare increases must take effect unless additional STF income is found. Again, the STF income is not controlled by DOT, but the Connecticut General Assembly. We would encourage you to speak with your representative to discuss your ideas to address these transportation funding challenges.

July Bond Commission authorized $10M TOLLS July Bond Commission authorized $10M 10 – 20 year Strategic Financial Plan Public outreach Environmental assessment Preliminary design documents Revenue and cost estimates Traffic forecasts Concept of operations

REFLECTIONS ON DOT ACCOMPLISHMENTS

REFLECTIONS Let’s Go CT! State Funding Federal Funding Major Construction Major Planning/Design New Haven Line Rail Lines Bus Highway Operations Complete Streets TOD Airport and Port Authorities Administration LEAN Enterprise Management Eliminates Federal requirements Authorized at $45 million/year in FY14-15 Increased to $74 million/year in FY16-17 66 applications received for over $109 million 13 completed in design, 10 awarded 35 currently being designed

A LOOK AHEAD

Service performance and efficiency Program development and delivery A LOOK AHEAD Vision Service performance and efficiency Program development and delivery Technology Building the case for new funding Staffing and succession planning Institutional culture Eliminates Federal requirements Authorized at $45 million/year in FY14-15 Increased to $74 million/year in FY16-17 66 applications received for over $109 million 13 completed in design, 10 awarded 35 currently being designed

Thank You