FOR RELEASE:

Highway Robbery: State’s Ailing Roads & Bridges Robbed of
65 Percent of Highway & Bridge Trust Fund Money

DiNapoli: State Siphoned Money to Pay for Operations and Debt Service

Audio Feed from DiNapoli Available

Since 1991, just 34.9 percent, or $11.6 billion, of the money in the state’s Dedicated Highway and Bridge Trust Fund went directly toward the repair and improvement of the state’s deteriorating roads and bridges, according to a report released by State Comptroller Thomas P. DiNapoli today at a press conference on Long Island. DiNapoli’s report notes that the Division of Budget projects the percentage of capital spending will decline to 21 percent in fiscal year 2013-14. Approximately $3.9 billion will need to be transferred from the state’s General Fund to the Highway and Bridge Trust Fund over the next five years to meet the Trust Fund’s obligations.

“Only one-third of the money in the Highway and Bridge Trust Fund has actually been used to pay for highways and bridges,” DiNapoli said. “The rest has been siphoned off to pay for debt service on back-door borrowing and to fund operational costs for the DMV and the state Department of Transportation.

“This money should be going toward keeping our roads and bridges safe, not to fund state agency operations. The bridge closing in Crown Point is just one more example of why this is so important. If this trend continues, the state will have to transfer nearly $4 billion into the Trust Fund over the next five years. Using this dedicated capital money to pay for operations and debt service is just one more gimmick on the list of New York’s bad fiscal choices.”

From FY 1993-94 through FY 2008-09, only 34.9 percent, or $11.6 billion of Dedicated Highway and Bridge Trust Fund spending was on capital projects while 37.7 percent, or $12.6 billion, went to fund state operations for the Department of Motor Vehicles and the Department of Transportation. The remaining 27.4 percent, or $9.1 billion, of spending paid for debt service.

The Trust Fund was created in 1991 to fund the construction and rehabilitation of state-owned roads and bridges. Initially, the Trust Fund was established as a self-sustaining, pay-as-you-go model to fund transportation capital expenses with revenues from highway and motor vehicle taxes. However, starting in FY 1994-95, the Trust Fund paid debt service for bonds that were issued by the Thruway Authority and never approved by voters. Operational revenue and spending were also added to the Trust Fund, further diluting its original mission.

DiNapoli’s report notes growth in state operations and debt service spending far outpaced spending on capital projects. Over the 16-year period, spending on capital projects grew by just 17.5 percent, while spending on state operations and debt service grew by 191.7 percent and 577.1 percent respectively.

To meet the Trust Fund’s growing obligations and the structural imbalance, the state increased General Fund support to the Highway and Bridge Trust Fund. In FY 2007-08, General Fund support for the Highway and Bridge Trust Fund was $12.7 million. The Division of Budget projects General Fund support will balloon to $396 million in FY 2009-10 and to $991.9 million by FY 2013-14. Over the next five years, DOB projects the state will need to transfer a total of $3.9 billion into the Highway and Bridge Trust Fund to meet the Trust Fund’s obligations.

The Trust Fund has paid for debt service for several programs including a significant portion of the state’s transportation capital plan, the Consolidated Local Street and Highway Improvement Program and Marchiselli bonds. All of this debt is the result of back-door borrowing that was never approved by voters. Debt service payments from the Trust Fund totaled $140 million in FY 1994-95 and jumped to $950 million in FY 2008-09. It is projected that by FY 2013-14, debt service payments will total 72 percent of the Trust Fund’s dedicated tax and fee revenues.

DiNapoli’s report recommends that state officials:

• develop a multi-year plan to address the Trust Fund’s unsustainable debt burden, return structural balance to the Trust Fund and ensure its ability to meet the state’s highway and bridge needs today and in the future;
• prepare and publicly release quarterly updates of the Trust Fund’s five-year capital program and financial plan; and
• create a comprehensive strategic planning process for state capital projects that prioritizes infrastructure needs to meet the critical needs of the state’s deteriorating roads and bridges.

Marc Herbst, Executive Director of the Long Island Contractors’ Association; Roger Clayman, Executive Director of the Long Island Federation of Labor; and Antoanela Vaccaro, Manager of Government Affairs at AAA New York, joined DiNapoli at the news conference.

“Comptroller DiNapoli’s report highlights the need for the state to get serious about funding its critical transportation projects,” Herbst said. “Rust, gravity and cracks are going to mock the state’s continued looting of the Highway and Bridge Trust Fund. Just here on Long Island, nearly 50 percent of local bridges have been labeled as deficient by the state Transportation Department. Political expediency will not protect our region’s infrastructure. It will not put anyone back to work. And it will not prevent Long Island from playing its historic role as an economic generator for the state.”

“New York’s roads and bridges are getting short-changed,” Clayman said. “The Highway and Bridge Trust Fund was created to make sure that the state’s transportation infrastructure needs did not languish. Unfortunately, Comptroller DiNapoli’s report shows this did not happen. Long Island has the workers needed to keep the area’s road and bridges safe but the state needs to recognize the value in investing in the state’s roads and bridges.”

“While we recognize the enormity of the fiscal crisis facing the state, funding transportation improvements is critical to improving the state’s economic standing,” said John A. Corlett, Legislative Committee Chairman for AAA New York State. “For obvious reasons, transportation is a vital component in economic growth. Yet, the state has ‘disinvested’ in its transportation infrastructure. In fact, over the past decade, the state has come to rely on federal aid to account for a greater and greater share of state transportation programs. Transportation infrastructure funding must be a priority if the state has any chance of improving its economic standing.”

Included is a regional list of some larger projects included in the DOT’s proposed Five-Year Capital Plan that are in need of funding. The Governor already deemed this plan as too expensive, implying that it will be reduced. This list highlights just a sample of unmet critical transportation needs across the state and the situation is likely to worsen.

###

Statewide Capital Projects:
Where will the Money Come From?