Investors to fund NY bridge, road repairs

Gov. Andrew M. Cuomo is preparing a $1 billion fund, seeded with investments from pension funds, private investors and the Port Authority, to repair the state's bridges and roads.

A major impetus behind the idea is the state's concern about bumping up against its statutory cap, which would prevent it from borrowing the money it needs for the projects. The state, thanks to a weak economy and years of borrowing, is close to that threshold.

"We're running out of room," said Division of Budget spokesman Morris Peters.

Given the political capital expended to raise income taxes on high earners this week, it seems unlikely that increasing gas and motor taxes to finance more road work would be popular.

In less than two years, the state's debt capacity will have fallen to $726 million from $4.76 billion last year, according to budget projections.

"It is a challenge that limits their flexibility to fund future capital projects," said Moody's Investors Service analyst Baye Larsen.

The debt cap, established in 2000, limits the amount of state-supported debt that could be borrowed after the cap was put in place, based on a percentage of personal income earned in the state. The state has $32.83 billion in debt that currently falls under the cap, according to budget documents. As the weak economy has reduced employment and salaries, the state's debt ceiling has lowered as well.

The infrastructure bank would "allow the state not to increase its debt on a short-term basis and move forward on important projects," said Sen. Charles Fuschillo Jr. (R-Merrick). Fuschillo, who chairs the Senate transportation committee, has been pushing for legislation to allow for public private partnerships for transportation projects and an infrastructure bank.

Other states including South Carolina, Florida and Ohio have established infrastructure banks for transportation projects. The governor's office has given few details about how the state's infrastructure bank would work, but in general, they lend money to a municipality or public authority at low interest rates. When the money is repaid, it can be lent out again for more projects.

Funding for transportation infrastructure has been a long brewing problem in the state. In 2008 the state's transportation commissioner said New York needed to invest $175 billion in its transportation assets over 20 years. The following year, former Gov. David A. Paterson rejected the DOT's $25.8 billion five-year capital plan as being unaffordable and settled on a smaller short-term plan.

State gas taxes and motor vehicle fees currently go into a fund to operate and maintain bridges and roads and to pay transportation-related debt. But lately it hasn't been enough. This year the state will transfer $449.9 million into the fund from the state's general fund to keep it solvent.