Despite an aging infrastructure badly in need of repair, Connecticut’s transportation program sat atop nearly $1 billion in unspent funds last summer, a stockpile generated largely in just three years. And while officials approved a one-time release of those funds last spring, state Treasurer Erick Russell wants to make sure stashing at that level never happens again. Russell will ask legislators when the 2025 General Assembly session starts Wednesday to cap the Special Transportation Fund’s emergency reserve so that once that safety net account tops 18% of the STF — nearly $412 million based on current spending — the state would have to put that money to work, paying down long-term debt. “This is a win-win outcome that relieves the burden of debt on taxpayers and frees up funding to invest in future transportation initiatives,” said Russell, who his entering his third year as treasurer. The plan centers on the transportation fund, which represents about 9% of this fiscal year’s $26 billion overall state budget. Besides covering operating expenses for transit programs and for the Departments of Transportation and Motor Vehicles, the fund also pays the debt service — principal and interest — on the hundreds of millions of dollars Connecticut borrows annually for highway, bridge and rail construction projects. The STF gets most of its funding from sales and fuel tax receipts, and the former has grown considerably in recent years, driven in part by inflation. [RELATED: What is CT’s Special Transportation Fund?] But while revenues have been robust, critics say the DOT has not ramped up construction work at a commensurate pace. Connecticut borrowed $875 million by selling bonds to Wall Street investors in the 2020-21 fiscal year to support transportation work. It issued the same amount last fiscal year, according to records from Russell’s office.  DOT Commissioner Garrett Eucalitto, who took over the agency two years ago, has prioritized hiring and retaining more engineers and planners, a challenge that’s become more difficult over the past 15 years. Three concessions deals with state employee unions have scaled back the retirement benefits that once made state service particularly attractive. Meanwhile, the transportation fund finished with surpluses approaching or surpassing 10% in each of the past three fiscal years, including a $277 million, a 15% windfall, in 2022-23 that occurred despite a gasoline tax holiday that cost the STF hundreds of millions of dollars in fuel tax receipts. The STF reserve, which holds annual surpluses from the fund, rose over the past three years from $241 million to almost $972 million, according to the state comptroller’s annual reports. That cushion account was slightly larger than 45% of last year’s entire transportation fund. Gasoline station owners, fuel distributors and others began to press state officials to cut gasoline taxes or provide some other relief given the huge unused revenues. Russell and Gov. Ned Lamont challenged legislators last year to cap the STF reserve at 18% and use the rest of the fiscal cushion to retire debt. Legislators agreed last May to reduce the reserve and shift the funds into debt payments — once. But they balked at committing to an 18% cap on an ongoing annual basis. But Russell is optimistic that once legislators see the benefits of scaling back those reserves, they will accept a permanent cap. About $394 million in transportation bonds were paid off early in late 2024, and another $140 million will be retired in the coming months. And while that means the transportation fund’s reserves are down more than $500 million, it also means Connecticut will save $45.1 million in interest charges this fiscal year and about $63.5 million annually after that. By 2035, the cumulative savings should exceed $680 million, Russell said. “These savings will allow our state to continue to fund critical transportation work that directly supports jobs in construction, engineering and the trades, while strengthening our local economy,” the treasurer added. And Lamont’s budget office is projecting the fund will close this fiscal year on June 30 with $158 million or 11% left over. Lamont administration plans more construction borrowing Still, the administration recently indicated it plans to increase borrowing for transportation projects significantly in the next few years. Connecticut is expected to issue $1 billion in transportation bonds this fiscal year, reach $1.3 billion in 2025-26, and $1.4 billion the year after that, according to projections Lamont’s budget office sent to lawmakers in November. Russell noted his plan only would target surplus dollars and would not reduce the revenues already dedicated to the STF. In other words, it would not interfere with administration efforts to ramp up Connecticut’s transportation rebuild. Lamont’s budget spokesman, Chris Collibee, said last week the governor remains supportive of capping reserves, calling it “a commonsense approach to making smart investments in our critical infrastructure networks, while controlling debt levels.” GOP leader: Repealing truck tax would combat inflation Rep. Maria Horn, co-chairwoman of the Finance, Revenue and Bonding Committee, has expressed repeated concerns about growing transportation reserves. And while the full legislature didn’t accept an ongoing cap last spring, Horn said it deserves a second look. “I think we should have that conversation,” she said. “It’s a constructive idea.” Horn also echoed Russell’s point that capping reserves wouldn’t interfere with DOT efforts to launch more construction projects, adding she believes most legislators want to see that expansion happen. Rep. Joe Polletta of Watertown, the new ranking House Republican on the tax-writing Finance, Revenue and Bonding Committee, said he supports capping reserves.  And while he likes paying down debt early, Polletta says his caucus has a better plan: simply cut the taxes that fuel the transportation fund. House Republicans particularly favor repealing the highway mileage tax on most large commercial trucks, which launched in January 2023 and generates about $60 million in annual revenue. Even without those dollars, the STF still would be on pace this fiscal year for a surplus of roughly $100 million or 4.5%. Polletta said eliminating the tax and controlling shipping expenses could help combat increasing grocery and department store prices. “We’re all for paying down debt,” he said. But “I think now is the time honestly to consider that [tax cut] if we have all of this extra money.” Lamont and his fellow Democrats in the legislative majority approved that highway tax after the governor failed to convince legislators in 2019 and 2020 to establish electronic tolling on Connecticut highways. The administration has noted that heavy trucks do significant damage to the state’s highways and this fee enables Connecticut to force businesses based out-of-state to contribute toward infrastructure repair costs.