Report of the Lieutenant Governor on

New York State’s Transportation Infrastructure

New York State currently lacks the revenues necessary to maintain its transportation
system in a state of good repair, and the State has no credible strategy for meeting future
needs. Simply maintaining the State’s existing physical assets will take billions of dollars
annually. Expansion of the transportation network to facilitate economic growth, meet
population increases, and improve quality of life will take billions more. But the resources
required to cover these needs are in short supply. In part, the lack of adequate funds is due
to the current recession, declining State revenues, and federal funding uncertainty. But it
also reflects the fact that New York has long failed to secure enough revenues to meet both
the operating expenses and the capital requirements of its transportation system.

Long term bonds are the proper financing mechanism for capital investment because they
allow for the amortization of such investment over the years of the lives of the people who
will benefit from the projects. Borrowing for operating expenses, however, is universally
recognized to be permissible only in emergencies or for transitional purposes. Borrowing
for operating expenses can be disastrous because it constricts borrowing capacity by
driving up debt service costs. New York’s recurring revenues to support its transportation-
related debt are not increasing at anywhere near the rate at which the debt itself is
increasing. As a result, the State confronts a crippling debt service crisis.

Right now, neither the MTA nor DOT has adequate resources to cover both its operating
expenses and the level of new borrowing demanded by its proposed capital program. New
York, therefore, faces a choice: significantly higher taxes, fees, fares, and tolls or a
drastically diminished transportation program that could jeopardize safety and economic
well-being. This unpleasant choice is not unique to the field of transportation
infrastructure. It also confronts the State in the areas of energy, drinking water, and waste
and sewer water treatment systems. But the field of transportation powerfully illustrates
the scope and gravity of the challenge.

1
Background

The New York transportation system is a vast network of highways, roads, rail lines, public
transit systems, pedestrian and bike facilities, airports, seaports, and waterways. Included
in this network are more than 113,000 miles of roads and 17,400 highway bridges, over
which more than 141 billion vehicle miles are driven annually. Within the State, more than
130 different public transit operators serve seven million passengers a day. There are also
3,500 miles of railroads throughout New York, moving more than 73 million tons of freight
annually. Each year, more than 150 million tons of freight pass through the State’s various
ports. Some of this system is privately owned and operated: intercity buses, freight rail,
and airlines. But much of it, including roads, bridges, and public transit systems, is
publicly owned and maintained. 1

The ongoing capital needs of this system are enormous. The Metropolitan Transportation
Authority (“MTA”) estimates that $120 to $140 billion will be necessary over the next 20
years just to meet the repair and replacement needs of the system. 2 The New York State
Department of Transportation (“DOT”) estimates that more than $175 billion will be
necessary statewide between 2010 and 2030 for the non-MTA New York transportation
system. 3 In addition to these enormous amounts are the many billions more needed for
transformational projects with the potential to drive future demographic and economic
growth, such as a statewide high-speed rail system, a Metro-North connection to Penn
Station, and the upgrades and expansions desperately needed at New York City’s seaports
and airports.

Since the 1980s, capital investments in New York’s transportation system have been
organized and implemented pursuant to multi-year DOT and MTA capital plans. While the
parameters of each plan have differed somewhat, the plans generally provide a blueprint for
1
The State owns 15,000 miles of the road and highway network. Counties own 20,000 miles, and nearly
77,000 miles are owned by cities, towns and villages. The State owns 7,600 bridges, with the remainder
owned by local governments and independent public authorities.
2
From the MTA Twenty Year Capital Needs Assessment, 2009, www.mta.info/mta/pdf/CP/
NeedsAssessment.pdf.
3
From the New York State Department of Transportation’s 20-Year Needs Assessment, 2007,
https://www.nysdot.gov/portal/page/portal/programs/20yearneedsassessment.

2
capital investment, select specific projects, and identify funding sources. The Legislature
approves the State’s funding commitments. The MTA capital plans address investment for
New York City Transit buses and subways and the commuter railroads of the Long Island
Rail Road and Metro-North Railroad. The DOT capital plans include investment for State
and local highways, freight and passenger rail, aviation, and non-MTA transit across the
entire State. 4

The Current Capital Plan Crisis

The State is presently unable to fully fund the proposed multi-year DOT and MTA capital
plans.

The $28 billion, five-year MTA Plan set out in October, 2009 5 faces a gap of at least $10
billion for its final three years. The MTA is in the middle of its largest system expansion in
more than four decades, and there is now legitimate worry that the MTA will have great
difficulty in finding resources sufficient to complete its current slate of mega-projects,
including the first phase of the Second Avenue Subway and the Long Island Railroad’s
East Side Access Project. On these two projects alone, the MTA is short $3.5 billion.
Should the MTA fail to fulfill its local funding obligations for these projects, the federal
grants that the MTA has received for the projects would need to be fully repaid--$284
million for the Second Avenue Subway and $1.25 billion for East Side Access. Given the
prohibitive amounts of these repayment obligations, the part of the MTA capital program
that is at most risk of non-funding is the MTA’s “core program,” which funds state-of-
good-repair and normal replacement projects for New York City Transit and the commuter
railroads—rebuilt tracks, upgraded signals, new subway and rail cars.

4
The DOT and MTA capital plans do not encompass the major transportation authorities that are
independently funded: the Port Authority of New York and New Jersey, the New York State Bridge
Authority, and the Thruway Authority. These entities are self-sustained by the tolls and fees that they levy
for use of the transportation facilities under their jurisdiction.
5
This amount includes $26 billion for transit and commuter rail and $2 billion for the MTA bridges and
tunnels.

3
DOT, in 2007, produced a 20-Year Needs Assessment that called for a doubling of
investment in the State’s transportation capital program in order to reach a state of good
repair. 6 But last year a $26 billion, five-year DOT capital plan was rejected because of
insufficient resources. As a result, DOT, instead of spending $5 to $6 billion annually on
its system over the next five years, is carrying out a two-year, $7 billion capital plan, which
significantly slows investment in the DOT system. This two-year plan will be funded with
$3.1 billion in federal aid, $438 million in funds remaining from the 2005 Transportation
Bond Act, and $3.3 billion in State funds expected to come from legislative appropriations
and dedicated revenues for transportation.

This slowing of construction spending will translate directly into a decline in asset
conditions. The percentage of sub-standard pavement conditions across this network, after
declining in the 1990s, has increased significantly over the past decade and will continue to
worsen. Over the next two years, pavement conditions on the State’s highway system are
projected to decline from 55% “Good and Excellent” to only 43% “Good and Excellent.”
The State should be repaving or reconstructing approximately 3,500 lane miles annually.
Under the two-year plan now in effect, only 2,000 lane miles will be repaved or
reconstructed each year.

Despite the fact that a disproportionate share of capital dollars is being directed to bridge
maintenance and repair, bridge conditions will decline slightly over the same two-year
period. Fifty years represents the useful life of many components of a road and highway
system, especially bridges. Yet much of the New York road and highway network is even
older than the 54-year-old national Interstate system. Thus, New York State faces a wave
of deteriorating bridges in the coming years. Maintenance alone will consume an ever-
growing percentage of resources, even apart from new capacity-expanding projects.

6
This recommendation mirrors the national findings in the National Surface Transportation Policy and
Revenue Study Commission’s Final Report to Congress, 2008, http://transportationfortomorrow.com/.

4
The DOT Capital Plan
Historically, State funds for transportation capital needs have come from tolls, annual
appropriations of State funds, and periodic general obligation bonds. 7 Toll revenues were
used to cover the debt service on the bonds that paid for the construction of the New York
State Thruway, key Hudson River crossings and many of New York City’s major bridges.
Throughout New York’s history, State general obligation bonds have been used to finance
numerous capital improvements. The New York State Constitution requires that general
obligation bonds be approved by voters, and the debt service on these bonds is paid out of
the State General Fund—the State’s general operating account. Only one general
obligation bond act has been approved in the past 20 years, in 2005. This act supported
$2.9 billion for the DOT and MTA capital plans of that period.

In the early 1990s, the State created the Dedicated Highway and Bridge Trust Fund (the
“Dedicated Fund”) in order to fund DOT capital plans on an ongoing basis with a reliable
revenue stream that did not require direct voter approval. The Dedicated Fund receives
most of its revenues from motor fuel taxes and automobile fees.8 These revenues cover the
debt service on bonds issued by the Thruway Authority for DOT capital projects and for
local highway and bridge programs, as well as the costs of DOT projects funded on a pay-
as-you-go basis and a substantial portion of the operating and administrative expenses of
DOT and the Department of Motor Vehicles (“DMV”). 9 The Dedicated Fund also pays
debt service on bonds issued to support local road improvements. 10

7
The largest source of funds for both the MTA and DOT capital plans is the federal government. Federal
funding has, on the whole, remained relatively stable and robust over the years. Federal funds accounted for
46% of the most recent $18 billion DOT capital plan and 39% of the most recent $24.4 billion MTA capital
plan. Federal aid is authorized through multi-year federal transportation legislation. The most recent Federal
Transportation Act expired on September 30, 2009. A successor program has not been enacted, and federal
support for the State’s transportation programs continues through temporary funding measures passed by
Congress.
8
The fund originally received deposits from four revenue sources: the Highway Use Tax on large truck
trailers, a percentage of the Motor Fuel Tax, a percentage of the Petroleum Business Tax, and a portion of the
fees levied on drivers by the Department of Motor Vehicles. These sources were later supplemented by an
auto rental tax and a franchise tax on transmission and transportation companies.
9
The Dedicated Fund was first tapped to pay for DOT and DMV administrative expenses in 2002. These
added expenses were off-set by the addition of new revenue sources to the Fund collected by DMV.
10
The Fund pays the debt service on bonds issued to support the State’s two local assistance programs for
road construction and maintenance, the Consolidated Highway Improvement Program (CHIPS) and the
Marchiselli Program. More than $5.8 billion worth of bonds have been issued for these two programs since
1991.

5
Today, the annual expenses paid out of the Dedicated Fund far exceed the annual revenues
that are deposited into the Fund. In State Fiscal Year (“SFY”) 2010-11, revenues for the
Dedicated Fund are projected to be approximately $2 billion. Of that amount, $1.3 billion
will be used for debt service payments on previous capital projects. Another $765 million
will be used to cover DOT annual maintenance and administration expenses and annual
State costs for winter snow and ice removal. An additional $208 million will be used for a
portion of DMV’s operating costs. Paying out these amounts will consume almost all of
the available revenues in the Fund before any new capital work is accounted for.

Because of the shortfalls in the Dedicated Fund, New York must now draw on the State’s
general operating funds to pay for new DOT capital projects. The State was first required
to subsidize the Dedicated Fund out of general operating funds in SFY 2004-05, when $4.6
million was transferred into the Dedicated Fund. By SFY 2008-09, this subsidy had
jumped to $237.2 million. In the current year, SFY 2010-11, despite New York’s
enormous budget deficit, the State budget transferred $700 million into the Dedicated
Fund. In coming years, unless the Dedicated Fund is provided with new dedicated
revenues, the subsidies to the Dedicated Fund out of general operating funds would have to
increase to more than $1 billion annually in order to the meet the debt service payments,
capital disbursements, and operating expenses that the Dedicated Fund now supports.

Over the past two decades, the State has increased its reliance on bonding to cover DOT
costs without adequately increasing revenue sources to service this debt. While federal
funds are used on a pay-as-you-go basis, New York now routinely issues State-supported
debt to pay for projects that could be considered regular maintenance, such as common
bridge and sign repairs, simple repaving, and lane marker striping. Over the years, DOT
has borrowed for an increasing number of projects with short useful lives and has curbed
spending on preventive maintenance, which is carried out by State employees and paid for
as an operating expense. In this way, the State is trying to mitigate the up-front cash
impact on its budget. This trend has accelerated in the past five years and has allowed New
York to pay for its capital programs without as much initial revenue as would otherwise be

6
necessary. The practice results in short-term cash savings but long-term growth in debt
service expense. Today, the growth in the State’s debt service payments far outstrips its
available dedicated revenues.

The State also is paying the price for a 2005 restructuring of the Dedicated Fund’s bonding
program. This restructuring produced short-term savings: approximately $250 million
annually for five years, which was then used to finance a new set of bonds for the 2005-10
DOT capital plan. Nicknamed a “scoop and toss,” the restructuring refinanced the first five
years of principal payments on these new bonds and spread that cost over a longer term—
with significantly higher debt payments beginning in SFY 2010-11. This strategy allowed
the State to finance the 2005-10 DOT capital plan with fewer new taxes and fees, but it has
also led to dramatically rising debt service payments: While debt service payments
consumed roughly 50 percent of total Dedicated Fund revenues in SFY 2001-02, this
proportion grew to an estimated 68 percent for SFY 2010-11. By SFY 2012-13, nearly 75
percent of the Dedicated Fund’s projected revenues will be used for debt service if current
borrowing conditions continue and no new Dedicated Fund revenues are provided.

The Dedicated Fund’s debt service expense and the subsidy from the General Fund to the
Dedicated Fund are increasing each year, but outlays for new capital projects are declining.
The current two-year DOT capital plan will hold funding for the overall DOT program flat
but will see a decline in dollars actually spent on construction. The size of the DOT
construction program will decline from approximately $2 billion in SFY 2007-08 (pre-
federal stimulus) to $1.83 billion in SFY 2010-11. It will decline further to $1.79 billion in
SFY 2011-12. 11

Thus, the State is, in effect, spending more than ever before on its transportation program
but getting less. As a result of this disinvestment, New Yorkers will begin to see
conditions in the DOT system decline in the coming years: The agency simply cannot keep
pace with the demands of an aging system. If New York State fails to devise a realistic

11
These numbers include all Federal and State funds.

7
blueprint for the years after 2011-12, it can expect the deterioration in conditions to
accelerate, resulting in increased safety risks, traffic delays, and associated costs.

The MTA Capital Plan

Prior to 1982, capital dollars for the MTA came primarily from the federal government, the
MTA operating budget, New York City, some State subsidies, and general obligation bond
act proceeds. Beginning in 1982, these sources were complemented by bonds backed by
farebox revenues, toll revenues from the MTA bridges and tunnels, and an $82 million
annual State commitment to the MTA. 12 Bonds for successive MTA capital plans have
typically been supported by new dedicated revenue sources enacted over the years within
the MTA region: a .375 percent sales tax, mortgage recording taxes, taxes on large
commercial real estate transactions in New York City, and the recently enacted Payroll
Mobility Tax. The MTA also receives part of the State’s taxes on motor fuel and drivers’
fees. 13 Dedicated taxes now account for approximately 36 percent of the MTA’s annual
budget, with additional State and local subsidies accounting for eight percent. 14

Today, debt service exerts pressure on the MTA program just as it does on the DOT
program. A debt restructuring carried out between 2000 and 2002 took advantage of lower
interest rates, which reduced debt service on the bonds outstanding at the time. Lower debt
service payments in the short term allowed for additional borrowing for a new capital plan
without new taxes and fees or higher fares; but the refinancing resulted in a dramatically
larger debt burden and debt service payments in future years. Bonding, as a share of the
2000-2004 MTA capital plan, jumped to 55.7 percent from its traditional share of around
36 percent. Between 2000 and 2008, the MTA nearly doubled its debt burden from $13
billion to $24 billion. The restructuring also extended the maturity dates of the MTA’s
outstanding debt. If the restructuring had not extended the maturity dates on MTA debt, a
substantial part of the MTA bonds outstanding in 2000 would now be paid off, freeing up
12
New York City contributed $105 million to the 1982 plan—close to the same amount it contributes today,
without adjusting for inflation. The $82 million annual State commitment secured $2.45 billion worth of
Service Contract Bonds.
13
Some commentators have argued that State and local support for the MTA capital plans has eroded over the
years. But this ignores the fact that the over the years an increasing number of revenue streams have been
dedicated to the MTA by both the State and the City.
14
MTA 2011 Preliminary Budget, July 2010. http://www.mta.info/mta/budget/july2010/july2010_vol1.pdf

8
revenues to support new borrowing capacity. Instead, the maturity schedule for the more-
than-$31 billion in outstanding MTA debt is back-loaded into the 2020’s and 2030’s; and
the MTA is in acute need of new revenues to service its existing debt and finance new
borrowing for capital purposes. Short-term fiscal and political relief came at a long-term
cost.

This imbalance in the MTA’s budget was masked for a short time by the economic bubble
of the mid-2000s, when the real estate taxes that support the MTA generated surpluses for
the agency. Instead of reserving these surpluses, the agency was under pressure to use
them to hold down fares; it even offered short-lived and short-sighted fare holidays
amounting to $45 million. When economic conditions changed and dedicated tax revenues
plummeted, the MTA found itself without enough revenues to meet both its operating costs
and its debt service payments.

Legislation enacted in May of 2009 temporarily eased the MTA’s situation. A new payroll
mobility tax, a surcharge on taxicab rides, and increased vehicle registration and drivers’
license fees within the MTA commuter district, combined with a modest eight percent fare
increase in that year, closed the MTA’s operating deficit for its 2009-10 fiscal year and
provided sufficient revenue for first two years of its $26 billion capital plan. What will
happen after the initial two years is highly uncertain.

Creating a Blueprint for the Future

New York urgently needs a long-term blueprint that explains how it will meet its
transportation needs. Otherwise, the State risks losing its ability to deliver projects that are
essential for preserving safety, improving quality of life, and maintaining economic
competitiveness. Underlying economic conditions make it difficult to plan for capital
expenditures over a 20-year period, but New York should at the very least have a five-year
blueprint for making sufficient capital investments in its transportation system.

9
Because of the constraints on the State’s resources, New York must refocus its
transportation program to emphasize state-of-good-repair, safety and security, more
efficient and cost-effective project delivery, and better regional planning. It simply will not
be possible for the State to fund every desirable project. While politicians often speak of
doing more with less, the fiscal reality of the next decade may dictate that New Yorkers
learn to do less with less. Making tough choices between equally compelling projects will
be a necessary part of this reprioritization. The next Governor and legislative leaders must
reckon with serious questions: How large a transportation capital program can New York
afford at this time? How should the State prioritize and finance its slate of multi-billion-
dollar mega-projects? How will New York respond if Washington fails to fulfill funding
expectations?

Funding for Future Needs

Funding responsibly sized five-year MTA and DOT capital plans is the most immediate
infrastructure challenge facing the State, which must carefully evaluate the capital needs of
the MTA and DOT systems, determine what it can afford at this time, and secure the most
reasonable sources of available funding. Otherwise, the State and the MTA will face two
equally unacceptable choices: increasing the burdens of debt and debt service still further
or gravely impairing the condition of the State’s transportation infrastructure system.

The proposed $26 billion DOT capital plan was short by at least $8 billion over a five-year
period, or approximately $1.7 billion per year. If the State were to borrow this amount
under current conditions, the Dedicated Fund would require roughly $600 million in
additional annual revenues to service the debt. If no new dedicated revenues were provided
to the Dedicated Fund, transfers of corresponding size would be required from the General
Fund, further worsening short-term State budget deficits. At the other extreme, New York
could adopt a drastic austerity program and limit State spending on new construction to just
the amount necessary to cover the local match required for federally supported projects. In
this case, the five-year DOT program could shrink to $14 billion; the State could likely
manage the cost of this smaller program out of existing revenues. Such a diminished
program, however, would drastically slash DOT construction. For instance, if this type of

10
austerity plan were implemented in the coming year, projections indicate that DOT
construction spending would fall from $1.79 billion in SFY 2010-11 to just $1.1 billion
SFY 2011-12, little more than half of the $2 billion SFY 2007-08 total.

For the MTA, there is a $10 billion hole in the final three years of the current $28 billion
capital plan. In rough terms, if the MTA were to borrow this amount under current
conditions, it would need approximately $700 million in additional annual revenues to
service the debt. If this amount of funding could not be found, the MTA would need to cut
the size of its capital program. Stopping the East Side Access and Second Avenue Subway
mega-projects would require the MTA to repay a prohibitive amount, more than $1.5
billion, to the federal government. If these two projects were continued, the reductions in
the MTA capital plan would be borne by the MTA’s core program—the investment in
tracks, signals, and stations that began in 1982 in order to bring the system into a state of
good repair. Short-changing these investments risks reversing three decades of the steady
progress we have made in improving the MTA system.

In order to avoid the need for these destructive choices, the State must turn its attention to
identifying the most appropriate sources for funding its transportation capital efforts. In the
current fiscal climate, the call for $1.3 billion in new annual revenues, exclusively for
transportation, is a tall order. But elected officials must come to grips with the fact that
forsaking continued investment in the State’s transportation networks would be even more
costly.

Project Prioritization
New York must evaluate the proposed MTA and DOT capital programs and future mega-
project proposals with a view to ensuring that funding is prioritized according to safety,
security, and greatest need. Given the current constraints on resources, it is likely that the
State will need to consider smaller overall plans. In addition, State transportation officials
must be clearer about what the public is buying with each dollar and what the trade-off is
for every dollar not spent. A conditions- and service-based review of the capital programs
will help inform the public and produce more targeted investments while also helping New

11
York avoid the kind of backsliding on system conditions that is imprudent even in a period
of austerity.

As it evaluates its transportation capital programs, the State must also focus more on
projects that advance multiple policy goals—economic development, sustainability, and
urban renewal. DOT should be commended for efforts in recent years to better incorporate
smart growth principles. But the agency still has far to go on this front, and there should be
far greater collaboration between DOT and state agencies like the Department of Housing
and Community Renewal and the Empire State Development Corporation as well as local
planning, transit, and development officials. In the New York City region, the MTA is the
force that makes New York the most energy-efficient state in the nation in terms of
transportation. But the agency must renew its emphasis on transit-oriented development in
the suburbs, reverse commuting, and links between suburban population centers. The State
should be working proactively with the MTA through the Empire State Development
Corporation to advance these goals.

Safety and security concerns may demand that certain major projects be prioritized above
others. The Tappan Zee Bridge connecting Rockland and Westchester counties and the
Kosciuszko Bridge on the Brooklyn-Queens Expressway in New York City are at the end
of their useful lives and must be replaced in the near future. The estimates are more than
$1 billion for a new Kosciuszko Bridge and between $6 and $10 billion for a new Tappan
Zee Bridge. But New York cannot afford endless delay on these projects; they are
essential to New York’s transportation system.

Planning for a replacement of the Tappan Zee Bridge has been underway for 10 years. The
bridge is one of the primary links in the Northeast highway corridor. When it opened in
1955, it carried an average of 18,000 vehicles daily. Currently, about 140,000 vehicles
cross the 3.1-mile bridge each day, with numbers as high as 170,000 vehicles daily. Just
maintaining the bridge will cost approximately $100 million annually over the next 10
years. The Kosciusko Bridge was built in the 1930s with narrow lanes, steep grades and
short ramps. Today it is used by more than 170,000 vehicles per day; there is congestion

12
on the bridge around the clock, and bridge conditions are deteriorating rapidly. In order to
maintain orderly freight and passenger traffic flows in and around New York City,
replacement of this structure is critical.

Better Regional Planning

As New York looks to future transportation investments, it can also do a better job of
coordinating regional planning efforts. New York City’s geographic location in the middle
of the Northeast Corridor and its historic position as a regional port and shipping center
uniquely situate it as the linchpin of the region’s transportation networks. Therefore, New
York has a special need to cooperate with its neighbors on projects that can improve the
movement of goods and people throughout the region. The fresh and painful experience of
ARC demonstrates the obstacles facing costly mega-projects that need total regional
cooperation and support—both financial and political—to succeed. In particular, New
York needs to drive regional efforts on rail: The current fragmentation of the Northeast
Corridor states puts them at a disadvantage when competing for federal High Speed Rail
dollars. New York should heighten its efforts with the federal government, Amtrak, the
Port Authority, and the other Northeast Corridor states to plan for long-term investments in
the corridor, including the expansion of the track and platform capacity at Penn Station and
new Hudson River tunnels that can be used by both inter-city Northeast Corridor trains and
New Jersey commuter trains. This long-term solution to Manhattan’s rail congestion will
come about only with a committed regional planning effort.

Project Delivery and Procurement Reform

New York cannot complete transformational mega-projects in the future unless it becomes
more innovative in project planning, financing, and delivery.
• Streamlined Environmental Review: New York should consider easing
environmental reviews for projects with a demonstrably positive environmental
impact, such as transit and intercity rail. The years and money spent on proving the
merit of projects like Moynihan Station make such important projects all the more
difficult to see through. We must reduce the gestation period for these projects.
The environmental process for critical projects should not take longer than the

13
 actual construction period. The State should also press for a streamlining of the
federal environmental review process for select project-types.
• Design-build: The State must enact legislation that empowers its transportation
agencies to procure the best services at the most competitive rates. Design-build
contracts shorten the planning and design process for major projects, thereby saving
time and money. Design-build contracts are one of the surest ways to reduce
construction costs for mega-projects like the Tappan Zee Bridge, and they are an
innovation in wide use around the world. New York will continue to lose the edge
to global rivals like Shanghai, Hong Kong, and Singapore if it insists on
handcuffing itself with outdated procurement policies.

New Revenues
In order to fund projects like the Tappan Zee Bridge and the Kosciuszko Bridge, New York
must get serious about pricing its transportation network effectively. The State should
initiate an Environmental Impact Statement for a regional tolling strategy that would
rationalize the downstate tolling regime. The development and phase-in of a coordinated
regional tolling strategy that includes all key bridges and statewide roads, especially the
parkway system, could provide funds for projects like the Tappan Zee Bridge.

The State should also explore the creation of special taxing districts for certain mega-
projects that have the potential to dramatically increase economic activity and property
values in an area.

Ultimately, the State must find new recurring, inflation-sensitive tax revenues—preferably
related to transportation—to cover the debt service costs on increased capital spending.

Conclusion

In 2009, State inspectors suddenly determined that the Crown Point Bridge connecting
New York and Vermont across Lake Champlain needed to be closed for safety reasons.
The bridge was blown up this past year to make way for a replacement, which will be

14
completed in 2011. In the meantime, thousands of daily commuters whose livelihoods
depend on that crossing are forced to make 100-mile daily detours in order to continue
earning a living. Even more disturbing is that the Crown Point Bridge was not a special
case. Bridge conditions were regularly monitored; yet, while officials recognized that the
bridge would eventually need replacement, no one expected it to deteriorate so rapidly as to
require complete closure. There are bridges in similar circumstances throughout New York
State. Given their age and intensity of usage, the State cannot escape responsibility for
maintaining them and regularly replacing them. If it neglects these challenges, it can
expect more Crown Point incidents, with the resulting personal and economic impacts.

In this period of austerity, national economic uncertainty, unpredictability of federal

funding, and rising social service costs, there is an increasing risk that funding for
infrastructure investments will be curbed to dangerous levels. In order to prevent a self-
destructive backsliding on investment, the State must craft a multi-year transportation
capital investment strategy that sets clear and attainable priorities, identifies reliable
revenues, and balances competing regional demands. Avoiding this obligation means
surrendering any plausible chance for a prosperous future for New York.

15