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Infrastructure Spending Imperiled by Lack of Funding and Coordination
n a new report, The Capital Question: Financing New York City’s Future Infrastructure, the New York Building Congress warns that lack of dedicated funding sources and inter-governmental coordination threatens the vast and growing infrastructure maintenance and expansion programs underway in New York City.
The report, which lays out for the first time all public infrastructure spending in New York City, identified $15 billion in total spending in 2002 by a multitude of
government agencies functioning in the City. These include the City of New York ($6.3 billion), the Metropolitan Transportation Authority ($5.7 billion), the Port Authority of New York and New Jersey (more than $1 billion) and New York State agencies (more than $1 billion), as well as the federal government ($600 million in direct spending).
According to the Building Congress report, a growing and potentially unsustainable proportion of infrastructure spending is supported through borrowing. In FY 2002,
the City, State, MTA and PA combined for $125 billion in outstanding debt, a number that is destined to grow with each successive capital budget.
“There is an obvious role and rationale for debt in the financing of long-lived assets,” said Building Congress Chairman Frank J. Sciame. “But there are real constraints, including the ultimate constraint – the ability to pay while continuing to fund ongoing general budget obligations.”
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| * 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. |
Building Congress President Richard T. Anderson added, “To meet the needs of a growing economy, the City and the various entities that work within it will have to look beyond traditional debt financing. Without new dedicated funding sources, we have
little chance of realizing some critical infrastructure plans, especially in the areas of mass transit and education.”
The report illustrates a series of potential measures to reduce the City’s reliance on debt. These include tolling the East River and Harlem River Bridges, achieving fair and adequate federal transportation aid, and increasing the use of public-private
partnerships to provide additional space for City schools.
A second issue raised in the report is the need for greater coordination in the planning and implementation of the broad spectrum of infrastructure spending in New York City.
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