In his combined State of the State and budget message last week, Gov. Cuomo officially unveiled $100 billion in “transformative” infrastructure projects — enough to “make Governor [Nelson] Rockefeller jealous.”
That wouldn’t be easy, even if it were desirable.
To finance a 15-year building binge that included most of the State University system — not to mention countless other capital projects capped by Albany’s monstrously modernist Empire State Plaza — New York’s legendary Republican governor from 1959 to 1973 quintupled state debt.
Cuomo within the next few years will have almost completely exhausted the state’s borrowing capacity under a debt cap first installed in 2000.
Cuomo clearly hopes his plans will be perceived as Rockefeller-esque in scope. So how does he plan to pay for it all?
The answer: for the most part, he doesn’t.
Nearly three-quarters of the money would come from the federal government; from public authorities dependent on their own user and passenger revenues; and from the private sector, including airlines using LaGuardia airport.
The state government’s share would come to $29 billion. But barely two-thirds of that was actually appropriated and lined out in Cuomo’s proposed Executive Budget and its accompanying multi-year state capital plans. And a lot of that money was already in the capital pipeline under previous budgets.
The disparity between Cuomo’s rhetoric and financial reality was particularly striking when it comes to the $26 billion five-year capital plan of the Metropolitan Transportation Authority.
Last October, Cuomo promised the state would contribute $8.3 billion to the MTA plan. But only $1 billion is actually included in the state’s new multi-year capital budget. Rather than tacking on another $7.3 billion in state debt, Cuomo apparently expects the MTA to fill much of that funding gap by issuing more bonds of its own, on which the state will pay the interest and principal.
Why? Because, as made clear elsewhere in the capital plan, Cuomo within the next few years will have almost completely exhausted the state’s borrowing capacity under a debt cap first installed in 2000. He could seek to amend the law, but apparently would prefer not to go down in history as the first governor to raise the cap.
Meanwhile, there’s at least $20 billion in Cuomo’s long-term capital budget to finance the Transportation Department’s five-year highway and bridge construction plan. That’s a relatively modest $2.2 billion more than the state was planning to spend over five years under the previous version of the capital budget. Another $2 billion is earmarked for the state Thruway in the name of holding down tolls.
While Albany’s highway and bridge plan at least is backed by more state funding than the MTA’s, the total outlay falls $6 billion short of the traditional “parity” between the total DOT and MTA plans. Anticipating this, Senate Republicans began pledging last fall to seek more money for highways and bridges.
But rather than raising or borrowing more, state legislators should stretch their dollars much further by reforming the way the state applies its constitutional “prevailing wage” provision, which adds significantly to construction costs; ruling out the use of similarly costly collective-bargaining agreements that favor unions; and permitting broader use of the efficient “design-build” approach, which is far more restricted in New York than in other states.
In addition, they should enact a law permitting public-private partnerships on transportation projects, and repeal the Scaffold Law, New York’s exorbitantly expensive liability rules that burden property owners and contractors.
Legislators also should re-direct the $1.1 billion “State and Municipal Facilities” pork-barrel slush fund they and the governor have been building up over the past few years. That money would be far better spent on high-priority needs.
New York will be better off if its current governor popped fewer corks and did a better job of keeping up with the tab.
And they should challenge Cuomo’s politically self-serving allocation of New York’s latest $2.3 billion windfall from fines and penalties paid by New York-chartered financial institutions — starting with the $340 million that Cuomo wants to give away as temporary “toll credits” to Thruway drivers.
For his part, Cuomo should keep in mind the experience of another former governor, Democrat Hugh Carey, who had to clean up the fiscal mess Rockefeller left behind.
As Rocky himself put it, “I drank the champagne, and Hugh got the hangover.” On the whole, New York will be better off if its current governor popped fewer corks and did a better job of keeping up with the tab.
This piece originally appeared in New York Post
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