Even Fairy Tales have to come to an end

In Columns by Hal Peterson0 Comments

Peter Pan, in the musical “Finding Neverland,” sprinkled stardust across a number of imaginative stages. Governor Cuomo is now on stage (wand in hand) focusing on revamping our infrastructure to 21st century standards, spending some $100 billion in construction costs. Central to this plan is the $20 billion Gateway Project that will connect travelers from across the Northeast with New York City and Long Island using a new Hudson Tunnel, $5.6 billion to reconstruct the Jamaica station and 39 other depots and rail crossings’, $1.6 billion for the new Penn-Farley Complex featuring a new Moynihan Train Hall, and a new West End Concourse etc.

There are good, bad and ugly implications imbedded in the above aurora.  Yes, our infrastructure is obviously in need of updating and the plans announced by the governor appear to have, in the perfect world, value. The bad, little concrete evidence exists on how to pay for all of this. The ugly, capital spending in New York is already the second highest in the nation, and to quote E.J. McMahon, from the Manhattan Institute “Cuomo within the next few years will have completely exhausted the state’s borrowing capacity under current debt cap legislation limitations.” For the year ending 2015, we are already in hock for $137,369,089,000. That amount encompasses financial obligations the state may not have paid such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees.

Three additional concerns surface. One, any number of reports issued by good government groups seriously question the adequacy and effectiveness of the current capital planning and financing process. Two, using the MTA Penn Station melee, or the 2nd Avenue subway project as example’s, words are easier to deal with than deeds. Three, to quote Thomas P. DiNapoli, our state comptroller, it’s no secret that many of the authorities and agencies in operation today “borrow and spend billions with limited transparency and accountability.” That’s not good. Too many ifs’ seem more than evident. Proceed with caution.

In the way of good news, the new Tappan Zee Bridge will open in August. One-half of the $4.8 billion cost will be paid with Peter Pan like stardust money gleamed from Wall Street settlements, the rest from tolls.

Go figure.

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