New York State Comptroller Tom Dinapoli has issued a report that says -
Money in the Dedicated Highway and Bridge Trust Fund continues to be
diverted for non-capital purposes, leaving critical highway and bridge
projects at increased risk as the state faces fiscal challenges and
shrinking debt capacity, according to a report issued today by New York State Comptroller Thomas P. DiNapoli.
"Taxpayers have paid billions in taxes and fees into a fund that was
created to keep our roads and bridges in good repair. Now, more than
three-quarters of this money is siphoned off to pay for borrowing and
operating costs of state agencies, leaving fewer dollars for improving
our infrastructure,”DiNapoli said. “While the state is making progress
with its capital planning, New York needs a reliable source for
investment in its transportation infrastructure and should restore the
use of this fund for capital purposes.”
Created in 1991, the fund was initially intended to provide dedicated
funding to reconstruct, replace and preserve the state’s highways and
bridges. Funding comes from dedicated taxes and fees, including a gas
tax, petroleum business tax, vehicle licensing fees and rental car tax.
By 2002, debt payments had surpassed capital projects. Just 22.2 percent
of its $3.8 billion disbursements were spent on capital construction in
state fiscal year (SFY) 2012-13, according to DiNapoli’s report.
State operations costs also consume the greatest share of the fund:
nearly $1.6 billion in the last fiscal year, including the costs of snow
and ice removal by the Department of Transportation and day-to-day
staff expenses at the Department of Motor Vehicles. Typically, staff
expenses and snow and ice removal costs are regarded as ongoing costs of
state operations and maintenance, not capital expenses.
The proposed Executive Budget for SFY 2014-15 projects capital
disbursements to account for 23.5 percent of all trust fund
disbursements, a slight increase from the current year. Meanwhile,
combined debt service and operations spending is projected to remain at
more than three-quarters of all fund spending.
The decline in cash support for New York’s highway and bridge program has continued since the Comptroller’s 2009 report,
which found that the fund had shifted from support for the capital
highway and bridge program to a broader transportation program.
A useful measure of the health of the fund is called pay-as-you-go,
or PAYGO, which gauges the amount of cash in the fund that the state
dedicates to pay for capital and operational expenses. PAYGO is an
alternative to debt, which must be repaid over time with interest. PAYGO
levels have declined steadily over the years, dropping to just over 28
percent in SFY 2012-13 and expected to fall to about 23 percent by SFY
2018-19.
While some debt is appropriate for the state’s capital program, debt
becomes a burden when the payment of debt service becomes such a large
use of the fund. When this happens New York’s ability to fund highway
and bridge capital projects is constrained, DiNapoli’s report concludes.
The report also found:
- In state fiscal year 2012-13, debt service accounted for 40.7 percent of all fund disbursements;
- Since the creation of the fund through SFY 2012-13, capital disbursements have totaled $14.5 billion, or just 30.6 percent of all disbursements; and
- The fund’s reliance on increasingly large transfers from the state’s general fund and federal funds shows no signs of reversing. The general fund subsidy is expected to climb to $849.6 million by state fiscal year 2018-19.
He called for a long-term plan to restore the fund to its core
mission and increase pay-as-you-go financing for road and bridge capital
purposes. The report includes revenues and spending for the past 20
years.
For a copy of the report, visit: http://www.osc.state.ny.us/reports/trans/dhbtf020413.pdf
For a copy of the 2009 report, visit: http://osc.state.ny.us/reports/trans/dhbtf102809.pdf
