The I-95 NHHC Corridor Improvement Program is being financed through a combination of direct cash contributions from federal funds (primarily National Highway System (NHS), STP Anywhere, and bridge apportionments), and state funding. Federal funding will cover approximately 87 percent of the Program cost and state funding will make up the remaining 13 percent.

Federal Funding Actual obligated federal funding to the State of Connecticut for FFY 2003 was $467.9 million, which was consistent with recent TEA-21 funding levels. Federal funding for FFY 2004 has not yet been determined. Currently, the state operates under a federal legislated continuing resolution and has only been provided partial funding. For the purposes of this report, Connecticut approximates its annual FFY 2004 and future funding levels at a level of $425 million annually.

At the current time, all estimates of future funding are speculative since Congress is working on a six-year reauthorization of the Federal Highway Bill, and has yet to pass a 2004 Appropriations Bill. The Department continues to pursue special funding and/or legislation to support the Program. The Program may be affected if Federal Transportation funding continues to be provided via a series of short term continuing resolutions.

Federal funding for the Program is projected to be over $90 million from FFY 2005 through FFY 2011. The maximum projected federal funding level for the Program of $96.1 million occurs in FFY 2011. This is below the $209.8 million apportionment level assumed to be available for the Program.

State Funding The State has a dedicated Special Transportation Fund (STF) that was fully established by Legislature in 1984. More detailed information about the STF is provided in the Department’s Master Transportation Plan. The Bureau of Highways annually receives $130 million of bonding authorization that is financed by the STF. These bonds are used to provide the state match for transportation infrastructure projects.

With large-scale improvement projects, the Department phase finances the required federal funds over the duration of the construction contract to approximate expenditures. The Department’s policy is to “fully-back” the required state share prior to award of the construction contract. This is a conservative approach and insulates the construction contract, once awarded, from state fiscal issues.

This policy can cause challenges when a significant state share is required since the Bureau’s bonding capacity is normally capped at $130 million. Contract B (State Project No. 92-532), is currently projected to cost $400 million and would require a $50 million state match. The Department has examined various packaging alternatives, but currently feels the single-project approach is advantageous for a number of reasons. Consequently, the Department has requested the State Legislature to “advance” the programmed Intrastate bonds for SFY 2004. This would increase the Bureau’s bonding authority for SFY 2004 to $178.8 million. The State Bond Commission approved the increased SFY 2004 level of funding in September 2003. The total amount of funds authorized over a ten year period would remain constant, since future authorizations would be reduced accordingly to offset this one-time increase.

The maximum annual state funding required for the I-95 NHHC Corridor Improvement Program is $65.5 million in SFY 2004. This is well below the state’s bonding level.