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Will Budget Cuts in Washington Mean Less Federal Cash for Connecticut's High-Speed Rail Project?

Gregory B. Hladky

April 21, 2011

No worries. It's all good. Chill out, dude.

That's a loose translation of the official Connecticut response to the latest cutbacks in federal aid for high-speed rail projects, spending reductions that some fear might hinder this state's cherished plans for the New Haven-Hartford-Springfield corridor.

According to state officials, just because last week's emergency budget deal chopped something like $1.5 billion from planned federal rail spending, that doesn't mean Connecticut won't get the $227 million it needs for the rail project it's been working on since 2006.

“By no means is this the end of the line for high-speed rail in the Northeast,” says Kevin Nursick, spokesman for the Connecticut Department of Transportation.

This state has been lobbying hard for a chunk of the $2.4 billion in federal rail cash Florida rejected earlier this year. The spending cut deal agreed to by the Obama administration and congressional Republicans would reduce that amount by some $400 million, making competition for the remaining money a hell of a lot more intense. The deal also chopped more than $1 billion in other planned rail spending.

“It just means increased competition,” Gov. Dannel Malloy's policy director, Liz Donohue, says of the multi-state scramble for a share of a dwindling pool of high-speed rail money. “I don't think there's a concern that things are going to disappear altogether.”

Jim Brett, the top guy at the New England Council, has a very different opinion. “I think it's going to be very, very, very difficult to get any of that funding,” says Brett, whose Boston-based organization represents all six New England states in Washington, D.C.

Brett points out that Connecticut is one of 23 states looking to tap into that money, and the total number of requests is five times as large as the cash available.

The $38 billion in federal spending cuts for the rest of this fiscal year have hit a lot more than rail projects. Reductions in aid for Connecticut have rippled through programs for gifted education, nonprofit counseling for people facing evictions, and health centers.

Negotiations are already underway on the federal budget for the fiscal season that begins in October, and just about the only given is that there will be huge pressure for even deeper spending reductions.

Even before this latest spending cut deal was announced, Connecticut's DOT had already pushed back its estimate about when improved rail service between New Haven and Springfield would be up and running. The target date had been 2015, but transportation experts have quietly changed that projection to “early 2016.”

(Keep in mind that former Gov. M. Jodi Rell first proposed creating commuter rail service along this line back in 2006. The original startup date was 2010.)

The primary reason for the latest shift, according to Nursick, is uncertainty over when badly needed federal funding for the project will be made available.

Federal and state officials insist these new spending cuts won't endanger the $160 million the feds have already committed to the New Haven-Hartford-Springfield project. Forty-million dollars of that cash was released to Connecticut this month and the other $120 million is (theoretically) in the pipeline.

The trouble is that federal pipeline is being squeezed by the weight of the trillion-dollar federal deficit and demands from both Republicans and many Democrats that federal spending be brought under control.

Connecticut has already agreed to borrow $286 million as its share of the 62-mile project to improve rail service along the I-91 corridor. But that money, plus the federal cash that's been promised, won't even cover the estimated $547 million in “preliminary costs” for the project, the total cost for which will range up to $1 billion, according to some estimates.

The repercussions of increasingly scarce federal aid are being felt in lots of areas, and it was happening even before this latest round of cuts. One example is the proposal to build an expanded University of Connecticut Health Center.

The UConn Health Center in Farmington has long been mired in a bog of red ink, requiring multiple state bailouts to cover deficits of $80 million over four years. In 2010, the legislature approved a $352 million plan for an upgraded academic hospital facility, but the state funding was contingent on Connecticut's ability to latch on to $100 million in federal aid for the project.

In December, the political hammer came down hard. The Obama administration sent the available $100 million to a hospital program in Ohio (which happens to be a hell of a lot more important to Barack Obama's reelection hopes than Connecticut).