Gov. Ned Lamont’s budget will freeze the transfer of vehicle sales tax revenue from the General Fund to the Special Transportation Fund, essentially bankrupting the state’s transportation fund by 2021.
Whereas the STF was projected to have a surplus and increase revenue by $300 million over the next three years, according to budget projections by the Office of Fiscal Analysis and the Office of Policy and Management, the governor’s budget short-changes the STF by $1.19 billion over the next five years.
The sales tax transfer from the General Fund to the STF was scheduled to be phased in from 8 percent of car sales tax revenue to 100 percent by 2024. General Fund transfers are not protected by the new Transportation Lock Box.
Freezing the sales tax transfer at 8 percent will leave the STF underfunded by $729.8 million by 2024, according to the governor’s budget.