Since 1991, just 34.9%, or $11.6 billion, of the money in the New York 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 on Friday, Oct. 30, 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% in fiscal year 2013-14.
“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.”
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%, while spending on state operations and debt service grew by 191.7% and 577.1%, 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 (DOB) 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% of the Trust Fund’s dedicated tax and fee revenues.
DiNapoli’s report recommends that state officials:
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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;
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Prepare and publicly release quarterly updates of the Trust Fund’s five-year capital program and financial plan; and
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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.
