Cuomo’s infrastructure plan is bold, but how will he fund it?

Gov. Andrew Cuomo’s ambitious new public works agenda would do everything from transform Penn Station to overhaul the Jacob K. Javits Convention Center to expand the Long Island Rail Road – and that’s in addition to existing commitments like funding the MTA capital plan and paying for a new Tappan Zee Bridge.

With the state budget deadline looming at the end of the month, City & State’s Ashley Hupfl checked in with Citizens Budget Commission President Carol Kellermann about those plans – and more.

City & State: The Cuomo administration has faced criticism for its multi-year, multi-billion dollar capital spending proposal. What do you think about his proposal to allocate $22 billion to repair the state’s roads and bridges?

Carol Kellerman: We have concerns in general about the high amount of borrowing and debt that the state is undertaking. Not particularly on roads and bridges. People seem not to be remembering that the governor issued a 10-year capital plan in 2014 … and it was the first time he had a 10-year plan, and that it integrated all agencies, including the public authorities, into the plan. It already had a significant amount of money for the (state) Department of Transportation for roads and bridges. I don’t think it was $22 billion, I think it was $17 or $18 billion, but most of this funding had already been planned before this budget. So it’s not really that dramatically new, and yes, overall, there are a lot of questions about where this money will come from.

C&S: Where will the money come from?

CK: Will there be revenue sources or will it all be borrowing? Will the money to pay for it come out of general revenue or will there be tolls and fees like there are for certain bridges and tunnels that are supposed to be self-funding? So there are questions, but it takes a very long time to spend that much money, and you don’t really need to have the money in hand until you are ready to enter into contracts to do work. There’s quite a lot of planning and preliminary evaluation of projects ahead before we’re actually going to spend $22 billion. It’s not like tomorrow he’s going to allocate $22 billion. Everybody in upstate talks about parity, so I think one or more of the one-house bills will propose spending more than that, but there is a lot of aging infrastructure – I would include water and sewer infrastructure in there, as well – and we do have to keep our statewide infrastructure in a state of good repair, so it’s not inappropriate to plan to allocate, which is all this is, a plan to allocate funds.

C&S: Why is a 10-year plan important?

CK: We’re talking about a 10-year year plan, so there’s not anything unusual about making multi-year plans. What people are concerned about are the recent hundred-million, billion-dollar new plans – the Javits Center, the new Penn Station – and that coming up with a $100 billion figure is arbitrary because you haven’t even done anything to know how much these projects are going to cost or how long it will take to really sculpt them out. Some of it seems to be done for purposes of creating excitement and drama and not necessarily a realistic expectation that any or all of these things will happen. But I think that’s different. Those plans people are critical of because they create a sense of excitement and drama that may not really result in anything beyond that. But saying you’re going to spend a certain amount of money over 10 years to upkeep roads and bridges upstate or around the state is different, because you’re saying, “This is how much we’re willing to spend, up to this amount.” Then you have to see what the projects are, and I don’t think people in the counties outside the metropolitan area really have any doubt that there are enough projects to meet that level of expense over time. So I guess I’m not as outraged about that particular plan as some people you’ve talked to.

C&S: What concerns do you have about the Cuomo administration’s proposals?

CK: The new Tappan Zee Bridge. That bridge is different. That bridge is under construction and has cost estimates, but we still don’t know how that’s going to be funded. That’s past the planning stage and into the implementation stage and the governor has just now said he’s allocated another $700 million from bank settlement funds to the Thruway Authority, but it’s not clear what that’s going to, how much of it will go to the Tappan Zee Bridge and that we are going ahead with these projects without fully understanding the full scope of the costs and how we are going to pay it off. That’s something more specific than a long-range 10-year generic plan. There’s a concept that a toll bridge should be funded through the tolls and it’s being eroded. We don’t even want to figure out how much the toll needs to be to pay off the construction debt and to operate the bridge once it’s open. The proposal is to use one-time funds to subsidize the tolls for three years. Well, that’s not really going to be a one-time expense because people will expect the tolls to continue to be subsidized and he says we’re not going to deal with what the tolls will be on the Tappan Zee until 2020, we’re just going to keep finding ways to keep them the way they are until then. Well, again, by suggesting that you can just keep putting this off and not really give drivers an understanding of what the costs of the bridge are, is bad. It undermines the whole concept of user fees being used to pay for highways.