Over the past 10 years, New York spent an estimated $81.7 billion – including tax dollars, federal aid and long-term borrowing proceeds – to support its capital program, with another $9.6 billion proposed for the upcoming fiscal year, according to a report released today by State Comptroller Thomas P. DiNapoli. The report, which reviews New York's capital spending over the past decade and plans for the coming years, concludes that reforms are needed to ensure that New York State is spending its billions of capital project dollars wisely.
"Much of New York's infrastructure was built decades ago and is heavily used. It is in need of ongoing maintenance, repair or replacement, but the full scope of need is still unclear," DiNapoli said. "The Governor and Legislature deserve credit for creating a task force to coordinate New York's infrastructure needs but more reforms are recommended.
"New York state should have a comprehensive assessment of the condition of the state's capital assets and infrastructure needs to better assist policy makers to determine our most pressing needs and how much money is required to meet them."
The New York Works Task Force released its Ten-Year State of New York Statewide Capital Plan in June 2013. DiNapoli said the plan provides a broader, more coordinated picture of planned capital spending across the state. It includes spending in the State Capital Plan as well as for a number of public authorities, and covers ten years instead of the five currently required. However, the plan included minimal detail about individual projects, existing assets and their condition, and potential financing arrangements, including the potential use of private resources and public-private partnerships (P3).
To improve New York's capital planning process, DiNapoli recommends:
- Establishing a statewide capital asset condition and needs assessment and criteria for new capital initiatives;
- Ending off-budget capital spending;
- Enhancing capital needs reporting by individual agencies;
- Integrating legislative capital budget changes into the Capital Plan; and
- Ensuring that any legislation to authorize P3s provides public oversight to guard against the associated financial risks.
The report's findings also include:
- From SFY 2004-05 through SFY 2013-14, capital spending increased on an average of 6.3 percent annually, compared to an average annual increase of 3.6 percent over the same period in spending from other governmental funds.
- $41 billion of the $81.7 billion in capital spending from SFY 2004-05 to SFY 2013-14 was used for transportation purposes, more than all other categories of capital spending combined.
- The state is slowing the pace of its capital investments. Such spending is projected to decline by an annual average of 1.1 percent from SFY 2014-15 through SFY 2018-19, while spending from other governmental funds is projected to increase by an average of 3.5 percent annually during the same period.
- In recent years, financing for capital purposes has increasingly come from bonds, especially from bonds issued by public authorities. The proportion of capital spending financed with authority bonds rose to 50.8 percent over the last five years, compared to 47.9 percent between SFY 2004-05 and SFY 2008-09.
- The state continues to experience limited debt capacity as measured by the statutory cap on debt outstanding established in the Debt Reform Act of 2000. Despite this, more than 60 percent of the $47.6 billion projected to be spent over the next five years, including planned spending for SUNY dorms, is expected to be funded through the issuance of bonds.
- The Ten-Year Statewide Plan indicates that an average of 65 percent of capital spending identified by the New York Works Task Force will be for transportation. Of that, nearly 80 percent is projected to be needed to maintain a state of good repair.
For a copy of the report visit: http://www.osc.state.ny.us/reports/capital_report_030514.pdf