Congressional Gridlock Slows Upgrades to State's Infrastructure

New York’s infrastructure already faces a few bumps in the road—and those bumps could soon turn to potholes.

That’s the picture state Department of Transportation Chief Financial Officer Ron Epstein painted at Wednesday's NYSTEA Transportation Equity Conference. Epstein provided a sobering take on the state’s financial outlook for transportation infrastructure, including the federal government's critical role in funding in the coming years.

From 1956 to 2008, the highway trust fund, which support federal high transit programs, was self-sufficient, Epstein said. But it has since relied on revenue transfers from the general treasury. Depletion of highway funds has hurt states looking for federal reimbursement for infrastructure projects. Epstein said that if Congress doesn’t take action before July 4, the highway and transit program may not be able to fully support reimbursement requests states are seeking.

“They will have to take cash management actions to basically manage the revenue coming in, (and) that could include prorated payments, deferred payments and other actions that could be potentially harmful because these are monies that have been expended by a local government, the state, the MTA and they won’t be available for full reimbursement,” Epstein said.

However, he added that such a course of action is manageable because such a scenario usually occurs between July and the end of the federal fiscal year.  

“Going into the next year is when I really start to lose sleep,” Epstein said.

Spending commitments have been made beyond the state’s means, and if Congress doesn’t take action to fix its reimbursement system, no new federal highway or transit projects can be authorized during the 2015 federal fiscal year, Epstein said.

“Basically all we’re doing is paying bills on old projects," he said. "We’re not doing any new project authorizations--unheard of in my lifetime.”

Epstein also warned that the impact could be felt well into 2016, meaning projects like safety improvements and modernization won’t happen.

 “When we talk about funding for transportation, New York State is a partner,” Epstein said, adding that he considers New York a “self-help state” that has put in more money for transit projects than 46 other states combined. “We put in a significant amount of funding, so that federal piece is critical to sustaining the services that we have.”

The impact of the federal government’s actions are felt locally as well. Esptein said municipalities and local transportation authorities can’t wait until July to decide if they’ll enter in new contracts for things like buses or sidewalks. Instead, they’ll have to fly blindly not knowing if federal funding will be there.

“Something is going to have to give,” he said. “Somewhere within the federal budget it’s going to have to be a recalibration to decide that, yes, we’re going to invest in transportation or we’ll continue to see a retrenchment of the federal role in public transportation and highways and bridges.”