NY allocates unprecedented $55bn to transport

New York’s state lawmakers have agreed on a $156 billion budget for 2016-17 that includes the biggest outlay for transportation infrastructure in the state’s history and is the second-largest item in the budget.

The State Transportation Plan commits more than $55 billion to the sector, including $27.14 billion for State Department of Transportation (DOT) and New York Thruway programmes, and $27.98 billion for Metropolitan Transportation Authority (MTA) programmes.

“These programmes were not fully funded before,” Michael Likosky, a principal and head of infrastructure at 32 Advisors told Infrastructure Investor. “What this budget is doing is it’s putting them in line for the next five years,” Likosky, who had advised New York Governor Andrew Cuomo's administration, as well as New Jersey Governor Chris Christie for a number of years, added.

Part of the funds for transportation will come from financial settlements New York State has received from banks and insurers. According to the state’s Division of the Budget (DOB), New York State received a total of $8.3 billion in fiscal years 2015 and 2016, well beyond typical levels.

The state will put these funds to work “for capital projects to support economic development and bolster some of the state’s most vital infrastructure”.

Of the $27.14 billion dedicated to DOT and Thruway programmes, $700 million will be invested in Thruway infrastructure, adding to the $1.3 billion committed last year. The two-year investment of nearly $2 billion will support the infrastructure needs on the Thruway system – which extends 426 miles, making it one of the oldest components of the National Interstate Highway System and one of the longest toll roads in the country – and enable the Thruway Authority to freeze tolls across its network at least through 2020. It will also support the New NY Bridge project, which is under construction and will replace the existing Tappan Zee Bridge.

The majority of the $27.14 billion allocation will go towards improving highways, bridges, rail, aviation infrastructure and DOT facilities throughout the state. The DOT plan also includes $200 million for an Upstate competition to accelerate investments in commercial passenger and cargo service airports. Seventy-two airports are eligible to compete for five grants of around $40 million each. According to Cuomo, who announced this initiative as part of his 2016 agenda, successful proposals will create jobs, incorporate sustainable “green” building techniques, use renewable energy, and leverage private investments.

The $27 billion that is being channeled into the MTA Capital Programme will go towards improvements of the Long Island and Metro-North railroads, MTA Bus and capital facilities operated by the New York City Transit Authority.

However, in addition to the unprecedented amount of capital dedicated to the state’s transportation sector, the budget also invests in SUNY and CUNY, New York’s state and community university systems, both of which are funded by the state, while the CUNY system also receives funding from the City of New York.

“My view is that it’s very important that the budget includes money for SUNY and CUNY,” Likosky says. “It’s a key part of how the governor is re-making the state, which is by using the SUNY and CUNY campuses as economic development agencies, essentially. With regard to public-private partnerships, the SUNY and CUNY campuses are a perfect example of making clear that in New York you can place private equity in infrastructure.”

He added: “I think SUNY and CUNY are at the heart of the governor’s approach to public-private partnerships outside of the Port Authority,” Likosky remarked. “What he’s doing with the budget is he’s injecting capital and partnership between the state and the SUNY/CUNY systems and he’s using that partnership to attract private capital.

“This is not an earmark budget and it’s not a ‘we’re going to fund everything’ budget,” Likosky explained. “It’s a public-private partnership budget which means he’ll put something in but he expects other people to put something in too,” Likosky added, referring to Cuomo.

The budget also benefits non-transport related infrastructure sectors, by including appropriations of $300 million for the Environmental Protection Fund, the highest level of funding in the programme’s history, for investment in improving wastewater treatment plants, improving water quality and launching a new climate change mitigation and adaptation programme.