Ravitch and Volcker weigh in on New York's 'staggering' infrastructure needs
New York State's infrastructure is woefully underfinanced, and if investment in it lags, so will the state's economy.
That's the politically problematic, if not surprising, conclusion of a new report from the State Budget Crisis Task Force, chaired by Richard Ravitch, the former New York lieutenant governor who is credited with rescuing the M.T.A., and Paul Volcker, the former chairman of the Federal Reserve.
Ravitch and Volcker formed the task force in 2011 to better "understand the extent of the fiscal problems faced by the states of this nation in the aftermath of the global financial crisis."
The report, available here, focused on New York, California, Illinois, New Jersey, Texas and Virginia, and a good portion of the New York-specific portion focused on infrastructure and how inadequately it's funded in New York City, especially in light of Hurricane Sandy.
The costs to better protect New York's coastline and harden mass transit systems "could be overwhelming," according to the task force, but, "[e]ven before the storm, New York’s infrastructure needs far outstripped available resources."
Not only does it remain unclear how the state plans to finance the more than $4 billion Tappan Zee Bridge replacement, but the state has also yet to find "adequate, dependable funding for the capital needs of the Metropolitan Transportation Authority (M.T.A.), which has been undergoing a thirty-year rebuilding and currently cannot meet future needs."
The M.T.A.'s revenue stream, which is reliant on fluctuating tax revenue, is "volatile," and the authority has been forced into a reliance on debt, the sum total of which may well hit $40 billion in 2016.
That debt must be serviced, which is bound to have a damaging effect on the M.T.A.'s budget.
Also at issue is the payroll mobility tax, which provides more than $1 billion a year to the M.T.A., but which was recently deemed unconstitutional by a state court. The M.T.A. is appealing that ruling, but, "if it is upheld, alternative permanent revenues will be required."
The report also faults the state for its failure "to enact legislation to generate revenues for the M.T.A. from congestion or cordon pricing to the Manhattan central business district or from tolls on the East River and Harlem River bridges."
"In sum, the infrastructure investment needs in the state are staggering," notes the report.
Following the failure of Mayor Michael Bloomberg to get a congestion pricing scheme passed in 2008, discussion of charging drivers to enter the city's central business district as a way to prop up the M.T.A.'s finances has been muted.