New york state department of transportation capital program threatened by weakening funding streams

The New York State Department of Transportation (NYSDOT) faces several troubling fiscal challenges in the coming year, jeopardizing the long-term viability of the State’s roads and bridges. The New York Building Congress reviewed publicly available documents which indicate that most of the NYSDOT’s key sources of funding are destabilized, and New York City could be particularly hard hit.

First, the Governor has proposed a two-year capital program for the NYSDOT that, by the State’s own estimates, will actually cause a decline in the number of roads in a “state-of-good repair.” In October 2009, the State DOT released a proposed five-year capital program worth almost $26 billion, dedicating $4 billion in the 2010-2011 fiscal year, $4.5 billion in 2011-2012, steadily increasing allocations up to $6.9 billion by the 2014-2015 fiscal year.

The October budget was rejected by the Governor and replaced with a March 2010 proposal allocating $3.5 billion for fiscal years 2010-2011 and 2011-2012, a $1.5 billion decrease in what was already the least-well-funded portion of the original plan. Even under the most optimistic scenarios, this immediate loss of funding will make it difficult if not impossible to meet the original program’s long-term goals for system maintenance and upkeep.

Second, NYSDOT relies heavily on an uncertain federal funding stream. The State’s proposed capital budget includes a conservative assumption of $3.2 billion in federal aid, reflecting zero growth in federal assistance. However, after federal surface transportation legislation lapsed in September 2009, the State received funding at only 70% of prior levels until late March, when full funding was restored. With no expectation of new legislation in 2010, and the latest extension expiring in the middle of the coming fiscal year, federal funding is even more uncertain at a time when the State’s own infrastructure budget outlook is weak for years to come.

Compounding these issues is the troubling condition of the State’s Dedicated Highway and Bridge Trust Fund (DHBTF), which was created as a dedicated, pay-as-you-go source for transportation investment. The DHBTF has been continuously restructured to divert funds away from direct capital investment and into debt service and operation costs for the Departments of Transportation and Motor Vehicles.

Such ad hoc redirection of dedicated capital funds has eroded the foundations of this program as debt service and operations costs explode beyond the capacity of the Fund to pay for them. This imbalance will leave only about 20% – or less than $800 million – of Fund resources for new capital projects by 2013. Once envisioned as the cornerstone of a robust transportation infrastructure financing program, the DHBTF will soon finance only a fraction of the State’s growing infrastructure needs.

Finally, the State’s proposed budget does not fund vital large-scale capital projects in New York City, including the replacement of the Kosciuszko Bridge or the Van Wyck Expressway Interchange, the central artery to JFK Airport. This is especially troubling given that considerable federal funding is already appropriated for these projects, but requires a State match to access these funds. Although the Department of Transportation’s website still projects a 2014 start date for construction of the Kosciuszko Bridge, State Comptroller Tom DiNapoli has said that funding for the first, $403 million phase of the Bridge is “in question,” while the second phase is simply “not funded.”

The same concern holds for virtually all future large-scale State-managed bridge and highway projects, including continuation of the Gowanus Expressway, the Belt Parkway, the Van Wyck and Major Deegan Expressways, among others.

The State’s underfunded two-year capital program is symptomatic of a weakening transportation financing structure that, if left unaddressed, will lead to declining investment in roads and bridges and negatively impact the State’s quality of life as well as its ability to encourage investment and growth.

To address the funding deficiencies, the New York Building Congress recommends the following actions for the Governor and New York’s Legislature leaders:

• Identify additional revenue sources for transportation-related operating costs.
• Reduce reliance on debt financing and return a larger portion of NYSDOT’s capital investment program to pay-as-you-go financing.
• Require a strategic planning process that will prioritize key capital investments in order to provide a more predictable cycle of maintenance and improvement.
• Increase revenue from existing sources – such as the gas tax – that have not changed in more than a generation.
• Actively support new federal surface transportation legislation.

What you can do:

Contact the State’s legislative leadership and urge them to address the State’s transportation infrastructure funding crisis by acting on the above recommendations.

Governor David A. Paterson
Assembly Speaker Sheldon Silver
Senate Majority Conference Leader John L. Sampson
Your local State Assembly Member
Your Local State Senator

April, 2010