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November 30, 2010

 

Despite Billions Spent on Capital Projects, State Lacks Long-Term Infrastructure Plan

DiNapoli Calls for Sweeping Changes to State's Capital Planning

Even though New York state has spent $63 billion on capital projects over the past ten years, more than 40 percent of the state’s roads and bridges are considered substandard or obsolete, almost double the national average, according to a report released today by State Comptroller Thomas P. DiNapoli.  The poor condition of the state’s transportation infrastructure is a direct result of the fact that capital spending in New York has focused on short-term needs instead of long-term planning, leaving the state ill-prepared to meet its future capital requirements, DiNapoli noted.

“New York has spent more than $63 billion over the last ten years and plans to spend nearly $47 billion over the next five years,” DiNapoli said. “But the state still had to close a bridge that was dangerous, and there was no plan for a replacement until it was an emergency. Crisis management is not only uneconomical, it’s irresponsible.”

“There’s too much at stake – jobs, the economy, people’s lives.  New York has to stop its haphazard approach to capital projects.  Our economy is fragile enough. There must be a unified assessment of the state’s long-term capital needs to prioritize projects to ensure access to clean, safe drinking water and protect roads and bridges from closing or collapse.”

DiNapoli’s report found the state spent $63.2 billion on capital projects from 2000 to 2010. Through 2014-15, New York is slated to spend $46.6 billion on capital infrastructure.  Even with this spending, 42 percent of the state’s bridges are classified as deficient or obsolete, while 46 percent of the state’s roads are considered poor or mediocre. The national averages are 26 percent and 33 percent respectively.

DiNapoli’s report also noted that over the past ten years, debt-financed capital spending increased from 43.2 percent of total capital spending in SFY 2000-01 to 56.2 percent in SFY 2009-10.  While the SFY 2010-11 Capital Plan projects the use of bonds will decline over the next five years, historically, actual bond financing has been greater than initially projected.

DiNapoli’s report cautioned that if future debt issuances continue the historical pattern of exceeding projections, New York may once again find itself bumping up against its debt caps.  This would undermine the state’s ability to meet even the most critical infrastructure needs.  In addition to debt
issued for capital purposes, almost $10 billion of the state’s outstanding long-term debt was issued for non-capital purposes, such as to provide deficit financing or some other form of budget relief.

Additional findings of the report include:

  • over the last ten years, the proportion of spending for transportation and environmental projects declined;
  • despite universal consensus that New York’s Tappan Zee Bridge, which is critical to the economies of the Hudson Valley, is obsolete and in dire need of replacement, funding for replacing the structure is absent from the state’s five-year Capital Program and Financing Plan; and
  • the Capital Plan fails to assess and detail how spending will improve the quality of New York’s infrastructure.

DiNapoli continues to push for comprehensive reforms to the state’s debt and financing practices, and its capital planning process.  To ensure the state properly maintains and improves its infrastructure and capital asset base to meet current and future needs, the state should:

  • restrict the use of public authority debt by banning backdoor borrowing including off-budget spending;
  • restore control over state debt to voters through the use of voter-approved bond acts;
  • impose a strict, effective debt cap of five percent of personal income;  
  • impose constitutional controls on debt to restrict use of long-term debt to capital purposes only;
  • create a New York State Capital Asset and Infrastructure Council to provide an inventory and status report on all capital assets of the state;
  • establish a statewide capital needs assessment, which develops criteria for the prioritization of capital projects across the state; and
  • enhance agency reporting, including prioritizing existing capital needs and establishing criteria for new capital initiatives.

To view DiNapoli’s report, visit: http://www.osc.state.ny.us/press/releases/nov10/capital_spending_report_nov2010.pdf.




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