Sean Goldrick Pilfering of transit funds a folly
In a column last month, (July 30, “Candidates need better direction on transportation”) Hearst Connecticut Media’s self-styled transportation columnist Jim Cameron, claiming that he “knows all this stuff,” having immersed himself in it for more than 20 years, offered to “give the facts about the pilfering of money from the Special Transportation Fund (STF) by Republicans and Democrats.”
I would urge Mr. Cameron to make good on his pledge — to give us the facts he says prove the STF is being “pilfered.” If it is true that the STF is being “pilfered,” or as Hearst editorial board wrote (July 19 editorial), that “lawmakers have used (the STF) as an ATM card to pay other bills,” then it will do the state, Hearst readers, and its editors an important service. It would also be interesting, because the data I’ve seen don’t support that claim.
In his March 2 presentation this year to the Connecticut General Assembly’s Finance Committee, Office of Policy and Management Secretary Ben Barnes presented data covering 2003 to 2017 showing funds diverted from the general fund into the STF, and out of the STF into the general fund. Far from showing the STF “pilfered,” however, Barnes’ data, sourced from annual reports of the Connecticut State Comptroller, demonstrated that the net flow of funds in every year but one have been from the general fund into the STF, not out of it.
Barnes’ data shows that from 2004 to 2015, $1,929.8 million from the Petroleum Gross Receipts Tax, originally intended for the state’s general fund, was diverted into the STF. That subsidy ended in 2015, and a new $41.2 million transfer was made into the STF that year from a category called “petroleum gross receipts hold harmless,” funds previously deposited into the general fund. Additionally, from 2010 to 2013, $355.5 million in “general transportation subsidy” was also diverted from the general fund into the STF. Further, Barnes lists the diversion $297.4 million into the STF from the sales and use Tax in 2016 and 2017, which also previously had been deposited into the general fund. The state began diverting a portion of the 6.35 percent state sales tax, which is being increased to 0.5 percent by 2018. In total, Barnes lists $2,623.9 million of funds intended for the general fund transferred into the Special Transportation Fund over that 15-year period.
In a recent follow-up, OPM Spokesman Chris McClure updated transfer data showing an estimated $323.4 million of funds from the Sales and Use Tax was diverted into the STF in FY2018, and projected that an additional $331 million would be deposited in the STF in FY2019.
By contrast, Barnes lists four years during that period in which funds were transferred out of the STF. Those include a 2003 out-transfer of $60.5 million to the general fund, $8.5 million in 2004, $6.5 million in 2009, and $76.5 million out of the STF in 2014. In total, Barnes’ presentation shows that during the period from 2003 to 2017, a total of $152 million was transferred out of the STF and into the general fund.
In summary, gross transfers from the general fund into the STF listed in Barnes’ presentation plus the updates from OPM total $3,278.3 million. By contrast, transfers out of the STF into the general fund total just $152 million. That means that on a net basis the state subsidized the Special Transportation Fund with $3,126.3 million from general fund revenues to boost the STF’s solvency. Indeed, the STF received net inflows of funds from the general fund every year during that period except 2003. So, far from the STF’s being “pilfered,” the data presented by the Secretary of the Office of Management and Budget, based on data derived from the annual reports of the State Comptroller, demonstrate that the Special Transportation Fund has been supported with net transfers of more than $3 billion from 2003 through FY2019. Moreover, during the Malloy administration, the general fund has subsidized the STF with more than $2 billion net transfers from the state’s general fund.
So if Cameron, as he claims, has data that contradict the OPM secretary and the annual reports from the state comptroller, and prove his claim of “pilfering,” I would love to see them and their sources. Otherwise, it may be time to acknowledge that this “pilfering” claim simply doesn’t hold water.
Sean Goldrick is a retired financial professional. He served on the Greenwich Board of Estimate and Taxation from 2012-2015.