The Capital Question: Financing New York City's Future Infrastructure
All Public Investment in New York City
2002 Total: $15 Billion*
New York City: The Single Biggest Player
Historically, the City’s capital spending has ebbed and flowed, with its ability to borrow (severely restricted in the period from 1975-1985) and its ability to pay debt service. During the recent economic boom (FY1998-FY2002), the City spent more than $25 billion on capital projects – averaging about $5 billion/year.
Transportation: Majority of Capital Spending
Transportation amounts to almost 60% of all public capital spending in the City. It is the entire mission of the MTA and the PANYNJ. More than half of the State’s direct spending goes to transportation. Of the non-federal players, City government in FY2002 spent the smallest share on transportation – just under $1 billion or 14% of its capital budget.
* This is a best estimate. Neither the federal nor state government can apportion fully their capital projects to the City jurisdiction . Our apportionment of State capital spending, from a variety of data sources, is based on historic patterns. Federal direct spending captures the major, large and obvious projects in the City, but it is likely incomplete. We have made every effort to avoid double-counting in the case of intergovernmental aid.
Rebuilding from the Terrorist Attacks
Much of this decade will be dominated by the need to rebuild lower manhattan. The Lower Manhattan Development Corporation (LMDC) is serving as the coordinator for the federal recovery funds appropriated to New York City after the terrorist attacks.
The LMDC is not a capital spending entity; rather it facilitates the planning and tracks the availability of funds to the spending entities – the MTA, the PANYNJ, the State and
the City of New York and private developers. This effort illustrates the number of players involved on the City’s turf, the overlapping jurisdictions, difficulties inherent in these processes, and the need for formal agreements.
The federal government is administering all funds through a single agency – the Federal Transit Administration – and has placed a special team in the City devoted exclusively to these projects. The Governor has a list of priorities recommended by a Transportation Working Group, composed of representatives of the State, City, MTA, PANYNJ, and the State DOT.
Already identified is $4.55 billion to reconstruct transportation in lower manhattan. Three major projects are in various states of readiness: $750 million is expected to be spent by the MTA to rebuild the Fulton Street Station, beginning in 2003. $2 billion is expected to be spent by the Port Authority to rebuild the PATH Station. The temporary station was completed and placed in operation in November 2003. $400 million is expected to be spent by the MTA for renovation of the South Ferry terminal, including some State DOT repair of West Street.
All of these projects will take a number of years. No agreement has been reached on the disposition of a remaining $1.5 billion of promised federal aid. In addition, the LMDC has authority to parcel out about $1.2 billion in federal Housing and Urban Development money, which has yet to be allocated.
Federal resources, added to the traditional City players, increase significantly the funds available for capital projects in the City in the near future, even if some substitution for local funds occurs.
The lesson of the LMDC has underscored the many actors who shape the look and functioning of the City and demonstrated the need to gain cooperation among them, to focus and set priorities, and to proceed through cooperation and consensus.
