An early benefit of an effort to secure wholesale fuel tax revenue, often diverted for other state government needs, is a bond proposal to provide $5 million in design funds for transformation of the Merritt 7 railroad station in Norwalk into a bigger commuting hub, State Sen. Bob Duff, D-Norwalk, said.

Duff said the potential economic benefits of ambitious transit and road projects have been lost for the past decade as state legislators tapped wholesale fuel tax charged to state oil companies, as well as other revenue reserved for expansion and maintenance of roads and transit to balance the state's books.

"It's been ignored for a long time," Duff said of the Merritt 7 station. "Funding a project like this shows the governor's commitment to transportation in the state and especially in southwestern Connecticut."

Amidst a $3 billion deficit and unpopular tax increases, Duff and other area legislators agreed they are thankful that Gov. Dannel Malloy's spending plan kept his campaign pledge to shield revenue intended for the state's Special Transportation Fund, used to pay debt service on road, rail, and other transit projects.

Malloy's 2011-13 budget increases the amount of wholesale fuel tax revenue earmarked for transportation will increase by more than $96 million over two years, and also includes more than $81 million in revenue from various fees and other taxes being transferred from the General Fund to the transportation fund in 2011 and 2012, according to Gian Carl Casa, Malloy's undersecretary of legislative affairs.

"That fund has been raided continuously so we are grateful for any initiative to put money back into it," said State Sen. Scott Frantz, R-Greenwich. "But we have to make a pledge as a state government we will never dip into that fund again."

Duff and State Sen. Toni Boucher, R-Wilton, said they hoped the additional money would help fund a project to electrify the Metro-North Railroad Danbury line and other key improvements on the Metro-North New Haven Line and Interstate 95.

Boucher, whose district also includes Westport, said while she was disappointed in the amount of concessions Malloy won from state workers, she hopes Malloy will use the additional transportation funds to make improvements Metro-North stations and infrastructure to support southwestern Connecticut's economy.

"This is the area where the action is and the greatest congestion and transit use exists and it should get the most attention," Boucher said.

While supportive of the greater funding, Boucher said she opposed Malloy's 3 cent increase in the state's diesel fuel tax to support the revenue boost, amidst her wider concerns about the economic impact of higher taxes meant to balance the state's $3 billion deficit.

"This increase is a two-edged sword in that it provides funding for transportation but on the other hand it increases the cost for businesses and residents and increases the cost of goods and services," Boucher said. "Take a look at Texas which has the biggest job growth in the country and four new Congressional seats which is attributable to public policy particularly in the tax arena."

State Sen. Carlo Leone, D-Stamford, praised Malloy's decision to increase the amount of money in the fund by finding revenue from the General Fund to support it.

"I think it is long overdue that the money we collect to pay for transportation funds transportation," Leone said. "I'm glad we're moving in that direction and my only hope is that we continue to do it that way."

Frantz said he would like to see Malloy and the legislature move as quickly as possible to correct the practice of diverting funds meant for transportation to other government needs.

Over the next five years, Connecticut is expected to need about $2.4 billion to finish maintenance and preservation projects required to maintain transportation infrastructure in "good repair," including some highways and bridges built in the 1950s and 1960s, according a January 2011 report submitted by a transportation working group that worked as part of Malloy's transition team.

As of January, the Special Transportation Fund was to face a deficit of $37.7 million in fiscal year 2012 until Malloy's administration adjusted the revenue streams to replenish it, according to the report.

"If people paid their additional taxes into a fund to pay for transportation, it is only fair and right to use it for infrastructure improvements," Frantz said.