The New York State Department of Transportation (DOT) develops the state’s policy for public and private transportation infrastructure, including 113,000 miles of highways, 17,400 bridges, a 3,500-mile rail network, 130 mass transit operators, 485 aviation-related facilities and 12 ports. With a Fiscal Year 2015 operating budget of $6 billion, a capital budget of $4 billion and a staff of 8,450, DOT is directly responsible for maintaining 38,650 miles of highways and 7,600 bridges. The biggest challenges for managing New York’s transportation infrastructure are:

Undertaking a comprehensive asset assessment to identify and prioritize capital needs. This needs assessment should be used to shape the next statewide capital plan.

Identifying resources for the DOT capital program. There are fewer pay-as-you-go resources available in the Dedicated Highway and Bridge Trust Fund (DHBTF), and the state has little room under its debt cap to issue new debt. DOT can use innovative procurement methods to make state dollars go further.  

Informing Future Priorities

In June 2013 Gov. Andrew Cuomo’s New York Works Task Force released the state’s first-ever statewide capital plan, a compilation of the 10-year spending plans of all major state agencies and public authorities. The plan identified $175 billion in capital spending, including $113 billion by transportation-related entities.

Judging the plan’s adequacy is difficult because it is not accompanied by any information on the condition of the state’s assets. The data that are available show significant transportation needs statewide. For example, the Metropolitan Transportation Authority (MTA) reported $52.2 billion in “continuing needs” in the next 10 years. Data from the Federal Highway Administration show that almost 40 percent of bridges statewide are functionally obsolete or structurally deficient.

DOT reports the condition of state-owned or -maintained highways and bridges in the state’s annual financial report. Highways are rated annually on a scale of 1 to 10 and bridges biennially on a scale of 1 to 7, with 1 indicating very poor condition. In 2013 the average rating was 6.99 for highways and 5.34 for bridges, with DOT reporting preservation and maintenance costs of $1.3 billion. This meets the state’s performance targets, but many state assets will require rehabilitation in coming years. Fully 40 percent of lane miles are in fair to poor condition and 291 bridges are flagged, indicating potentially hazardous structural conditions. The magnitude of spending needed to bring these assets to a state of good repair is not reported.

As the coordinator of transportation policy statewide, DOT should lead other transportation agencies and authorities in establishing a system for regular reporting on the condition of assets. This system should quantify the cost of repairing assets, maintaining them in a state of good repair, and replacing them when necessary. The condition and performance of assets should inform how priorities are established in the next statewide capital plan.

Making State Dollars Go Further

Capital funding for state-owned and -managed highways and bridges has grown from $2.2 billion in Fiscal Year 2005 to $4.5 billion in Fiscal Year 2015, thanks to bond proceeds from the Transportation Bond Act of 2005, the last voter-approved bond measure. Between Fiscal Years 2015 and 2019, DOT spending will account for $19.1 billion of the state’s $43.4 billion capital plan.

The DOT capital plan will be funded with a mix of pay-as-you-go resources and debt, including: federal aid; taxes and fees collected in DHBTF; bond proceeds; and general fund resources.

As reported by the state comptroller, the DHBTF has been transformed from a source of pay-as-you-go revenues for capital repairs on highways and bridges to a debt-financing vehicle and funding source for operations. In Fiscal Year 2013, only 22 percent of disbursements from the fund were for capital projects; 40 percent were for transportation-related operations, such as snow removal, and 37 percent were for debt service.

The increasing reliance on debt presents a problem for DOT because New York State has a statutory debt limit of 4 percent of personal income for all debt that it issues directly and subsidizes for borrowing by public authorities. The state’s capacity to issue new debt is projected to diminish steadily through Fiscal Year 2017, at which point personal income is expected to grow more quickly to allow for about $1 billion in additional debt. In contrast, transportation authorities, such as the MTA and the Thruway Authority, issue their own bonds, which are backed by tolls, fares and/ or dedicated taxes; restrictions on this revenue-backed debt are determined by the Legislature for individual authorities.

Scarce transportation dollars should be used effectively. One way to get more value-for-money is to use more flexible procurement and construction methods, such as design-build and other public-private partnerships (PPPs). PPPs are not “new money”; however, they can be more cost-effective and more nimble, allowing for projects to be completed more cheaply or quickly. For example, DOT has successfully completed rehabilitation of 32 bridges using design-build, reducing costs by 27 percent. Planned repairs on the Kosciuszko Bridge have been accelerated by 42 months under a design-build contract. The Port Authority is also operating a successful PPP at Terminal 4 at JFK International Airport. The state legislation authorizing design-build is set to expire at the end of the year; it is imperative that lawmakers reauthorize design-build and expand the scope of legislation to include other public-private partnerships so DOT and other agencies can benefit from these approaches.

Maria Doulis is the director of New York City Studies at the Citizens Budget Commission.