From Buffalo to Brooklyn, from New York City’s subway to the state Thruway, New Yorkers have inherited sturdy transportation infrastructure. Yet the state has lost its way over the past two decades — and Gov. Kathy Hochul, newly elected, must find it again in her first full term.
The state has long diverted scarce transportation funding to multibillion-dollar “signature” megaprojects — such as the new terminal for the Long Island Rail Road underneath Grand Central and the Tappan Zee Bridge’s replacement — at the expense of safeguarding the long-term condition of existing transportation and transit assets.
New York also faces new challenges. The proliferation of electric vehicles, encouraged by federal and state subsidies, presages an eventual decline in fuel-tax revenues, following years of erosion due to greater fuel efficiency. The persistence of the work-from-home phenomenon also heralds a long-term drop in transit-fare revenues.
The governor should reassert key principles.
First, major new transportation and transit projects should pay for themselves (after federal grant money): if not entirely through direct user revenues such as tolls or fares, then through voter-approved bonds and dedicated tax revenues, such as gas taxes.
Currently, by contrast, New York approves major projects with no way to pay for them. So it relies on borrowing. As the state comptroller has noted, rather than using $2 billion in dedicated annual gas-tax and other transportation revenues to fund capital projects directly, the state borrowed against those future revenues, leaving little money for maintenance and repairs.
If the state wants to build a multibillion-dollar bridge, as it did with the Tappan Zee replacement, for example, it should identify specific revenues in advance, such as a bridge-toll hike or the regional gas tax, to pay for it.
New York has several such pending projects, including the state contribution to the multibillion-dollar Brooklyn-Queens Expressway replacement.
Second, the state must prioritize repair and maintenance of existing assets. Despite billions of dollars in past and projected spending, New York’s road conditions are little better than two decades ago.
Third, the state must control costs. At the Metropolitan Transportation Authority, transit operating costs doubled between 2003 and 2019, before the pandemic, far outpacing inflation (39% growth). With growth in operating costs outpacing revenues, the MTA has also seen massive growth in its capital budget for infrastructure.
As the MTA’s Permanent Citizens Advisory Committee has written, the authority’s first capital plan, in 1981, totaled nearly $8 billion, or $24 billion in today’s dollars; the current five-year capital plan, which runs through 2024, projects spending $52 billion, more than twice as much in real terms.
Costs haven’t grown just because the MTA has embarked on ambitious projects, like the Second Avenue Subway. As the Engineering News Record reports, New York City’s construction-cost index is 67% above the 20-city national average.
A 2018 study also put the state’s highway-construction costs at $65,712 per mile, fifth-highest in the nation and nearly twice the national average. New York subway-construction costs are multiples of those in the rest of the developed world.
Fourth, Hochul should prepare to replace fuel-tax revenues as vehicles become more fuel-efficient.
The state should launch a voluntary pilot for drivers to test a fee based on miles traveled and such travel’s wear and tear on the roads, rather than on gas purchased.
The Eastern Transportation Coalition, of which New York is a member state, has worked with four states — Delaware, New Jersey, North Carolina and Pennsylvania — in testing pilots.
Last, the state and federal government must make a fast, final decision on congestion pricing — slated to start in 2021 and now delayed to at least 2024.
Part of the delay is due to huge pitfalls in the details: Congestion pricing would add hundreds of trucks daily to the Cross Bronx Expressway.
It’s past time to either do congestion pricing or abandon it — and find a different revenue source. A large-scale replacement for congestion pricing might include a pilot test of fees for loading and idling within core Manhattan, with the money to be shared between the MTA and the city.
New York’s transportation assets were once the envy of the nation. With the right policies, they can be so again.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal. Adapted from “The Next New York: Renewing and Reforming the Empire State,” a project of the Empire Center at NextNewYork.net.