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The Most Important Fiscal and Economic Issues Facing New York State

Infrastructure Policy

December 2018

Source: New York State Thruway Authority

HR&A Advisors, Inc. NY State Infrastructure Policy | 2

DEFINING INFRASTRUCTURE

HR&A examined New York State-owned, operated, and supported infrastructure, including roads, bridges, transit, aviation and energy assets, and broadband.

These assets are the foundational elements that enable cities to grow and economic development to occur.


NEW YORK STATE INFRASTRUCTURE TODAY

JOB CREATION


Investment in infrastructure offers broad benefits and lasting impacts.

COMMUNITY REVITALIZATION

ECONOMIC GROWTH

AND TRADESOCIAL MOBILITY

ENVIRONMENTAL SUSTAINABILITY AND RESILIENCY

NY State Infrastructure Policy | 5

New York State’s current infrastructure network is failing, preventing the statefrom achieving its potential.

Source: New York Times; City Journal, New York Post, Wall Street Journal, Business Insider

HR&A Advisors, Inc.


Today, New York State infrastructure is delivered through over 50 agencies and authorities, with limited cooperation or coordination among them.

TRANSPORTATION ENERGYWATER


Within the transportation sector, the MTA, DOT, Port Authority, and Thruway are the “Big Four” whose spending accounts for over 90% of total infrastructure spending in the State.

40%of state infrastructure spending

9%of state infrastructure spending

29%

of state infrastructure spending

17%

of state infrastructure spending


KEY FINDINGS


KEY FINDINGS

Funding currently identified infrastructure needs across the state will require over $100 billion in new investment.

Current capital investment is not sufficient to meet future needs or ongoing projects.


GATEWAY PROGRAM /

TRANS-HUDSON CAPACITY

CLIMATE RESILIENCY

POWER GRID MODERNIZATION

MTA FAST FORWARD

NYS THRUWAY


KEY FINDINGS

New York State lacks a comprehensive and coordinated capital planning process for infrastructure investment.

Agencies and authorities operate in silos today, without a statewide comprehensive effort to guide infrastructure investment.


The New York Works 2013 State of New York Statewide Capital Plan was a good start, but lacked momentum or authority.

New York Works laid out recommendations for capital planning that were largely not followed.

Entities today have inconsistent processes for developing capital plans, limiting the ability to comprehensively plan across asset classes.


20-year needs assessment feeds into 5-year capital plan

MTA NYS DOT

Irregular capital needs assessments conducted; no transparently-developed capital program

?


KEY FINDINGS

Priorities for new initiatives are announced ad hoc or in response to crises, as opposed to strategically developed.

While many of the State’s recent priorities reflect genuine needs, they areannounced, and often funded, outside of normal capital planning processes.


Source: Governor Andrew M. Cuomo Pressroom

HR&A Advisors, Inc.

AIRPORT MODERNIZATION

SUBWAY ACTION PLAN

STATEWIDE BROADBAND

IMPLEMENTATION

CLEAN WATER INFRASTRUCTURE

AIRTRAIN EXPANSION


KEY FINDINGS

Projects – both expansion and state of good repair – are not uniformly assessed based on alignment with statewide goals.


The following statewide goals are not consistently used to assess and prioritize infrastructure investment.

ECONOMIC GROWTH AND VITALITY

LONG-TERM RESILIENCY EQUITY LIFECYCLE COSTS


KEY FINDINGS

Infrastructure projects in New York are often significantly moreexpensive than in peer cities, exceed their original budget, andare delayed.

HR&A Advisors, Inc. NY Infrastructure Investments | 19

MTA FULTON CENTER MTA EAST SIDE ACCESS LONDON CROSSRAIL

Project Delivery: Design-bid-build Start Date: 2004Original Completion: 2007Actual Completion: 2014 Original Cost: $847 million Actual Cost: $1.4 billion

Project Delivery: Design-bid-build Start Date: 2006Original Completion: 2013 Actual Completion: 2022 (est.) Original Cost: $4.3 billion Actual Cost: $11.1 billion (est.)

Project Delivery: Special project delivery corp. Start Date: 2009Original Completion: 2018 Actual Completion: 2019 (est.) Original Cost: $19.4 billion Actual Cost: $20.2 billion (est.)

Many New York infrastructure projects take longer and exceed their budgets at a higher rate than similar projects in other global cities.


KEY FINDINGS

Existing funding sources for infrastructure investment are uncertain to continue at current levels.

Gas tax revenues may decrease as vehicles continue to become more fuel-efficient and federal programs, including New Starts, have an uncertain future.


Sources: Data.ny.gov, Streets Blog USA, The Hill, Eno Center for Transportation

HR&A Advisors, Inc.

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Motor Gasoline Consumption in NYS

Series…

What Next For the Mass Transit New Starts Program?


KEY FINDINGS

Financing is limited by the state debt cap, meaning that financing available for infrastructure is likely to decrease in the coming years.


State and infrastructure authorities’ debt is growing, limiting the ability to financecritical projects.

New York has the second highest outstanding debt of any state at $51B, behind California.

Currently projections estimate state-supported debt to grow by 25% in the next 5 years.

The amount of outstanding debt at the MTA is projected to increase by more than 20% by 2022 (from 2017 levels).


RECOMMENDATIONS


RECOMMENDATION #1

Establish a State Office of Infrastructure to lead statewide infrastructure planning.

• Housed in Executive branch• Led by professional executive with infrastructure experience


RECOMMENDATION #2

The Office of Infrastructure should articulate set of criteria to prioritize infrastructure investment, aligned with statewide policy objectives and needs.

• All statewide investment should be assessed comprehensively• Link investment to goals including economic growth, improving

equity, enhancing resiliency for communities


RECOMMENDATION #3

Balance maintaining a State of Good Repair with capacity expansion/transformative projects.

• Conduct analytic assessments to prioritize appropriate investment,including the development of metrics and a consistent assessmentapproach

• Assessments should guide investment between SOGR projects vs new capacity expansion projects


RECOMMENDATION #4Create a Center of Excellence to tackle cost drivers, assess andrecommend project delivery methods, and facilitate knowledgesharing.

• Address systemic cost drivers across entities• Assess and recommend the appropriate project delivery method for

certain projects above a monetary threshold• Encourage and facilitate knowledge sharing across agencies and

authorities• Support the introduction of new technologies


RECOMMENDATION #5Provide a public clearinghouse for project transparency and reporting.

• Provide public with a “one-stop shop” for infrastructure investmentinformation

• Develop and maintain publicly available dashboards to track project metrics such as cost and schedule across all agencies and authorities


RECOMMENDATION #6

Pursue alternative funding sources to increase infrastructure investment and account for future uncertainty in traditional sources.

• Assess and pilot new funding sources, including congestion pricing, vehicle miles traveled taxes, value capture, and dedicated taxes to support infrastructure


Q&A SESSION

The Most Important Fiscal and Economic Issues Facing New York State

Infrastructure Policy

December 2018

Source: New York State Thruway Authority

Documents

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