The document discusses the uncertain fiscal future for transportation infrastructure in New York State. It notes that the state currently lacks sufficient revenue to maintain its transportation system and has no credible strategy for meeting future needs. The session then discusses topics such as the current federal and state budget climates, the role of the federal government, and how best to generate required revenue for investment. It provides details on funding sources and commitments, declining federal shares for New York, increasing debt burdens, and the broken financial backbone of current transportation funding models. Overall, the document outlines serious challenges and uncertainties facing transportation infrastructure finance in New York.

1. State Transportation Infrastructure
Finance Context & Issues
Uncertain Fiscal Future
New York Public Transit Association
Fall Conference and Trade Show
November 19, 2010

2. “New York State currently lacks the revenue
necessary to maintain its transportation system in
a state-of-good-repair, and the State has no
credible strategy for meeting future needs.”
Lieutenant Governor Ravitch
November 17, 2010

3. Session Discussion Topics
 New York and the nation are at a crossroads in transportation
 The current climate
– FederalState budgets are driving force in future investment decisions
– Congress is stalled and is not moving forward
– The financial backbone of the surface transportation programs is all but broken
– Administration is focused on climate change, livability and performance based
planning
 What is the Federal government’s role going to be in the future?
 How will the State/nation best generate the required revenue for investment?

4. NYSDOT Capital Program Commitments/
Funding Shares

5. The Current Climate

6. The Current Climate
 The bad news
 The Administration and the Congress have not put a high priority on
reauthorization
 The Highway Trust Fund (and Stated Dedicated Fund) has all but gone
broke
– There is no support for increasing user fees
– There are many competing goals at the national level
 Difficult to develop multi-year plan at State level

7. Administration’s Direction
 The long-term proposals postponed/Up front Investment of $50 billion
 Some key features will likely include:
– Livable communities
– Major emphasis on transit
– Congestion reduction
– Passenger rail revitalization
– Climate change
– Performance based programming/planning (Discretionary?)
– No user fee increases in the immediate future

8. The Congress
 Facing difficult choices
– The House of Representatives -Transportation and Infrastructure
Committee - has developed a bill
– The Senate counterpart (EPW, Banking, ET AL) has not taken
action but started work
– The Congress passed and extension through December 31st.
– Funding is in critical condition
 The road ahead is bumpy/no clear path forward

10. Mid-term Election Impacts
 Results may have a significant and lasting impact on future
surface transportation legislation/New York
 New Congress will be more conservative/less likely to consider
increase taxes and/or expenditures
 Future of Oberstar’s proposed $500 billion program

11. House Transportation and Infrastructure
Committee
 Committee that will write next transportation bill in House
 State may lose up to 4 of 5 seats on T&I (Bishop?)
 Nadler Remaining member
 Five (possibly six) new members of Congress. Encourage them to
seek a seat on T&I
 Congressman Mica (R-FL) expected to become next Chair
– “…do more with less”

12. Senate Environment and Public Works
Committee (EPW)
 Writes highway title of the bill
 Senate Democrat margin reduced
 May result in reduced democratic committee slots
 Senator Gillibrand - junior committee member – could lose
EPW seat

13. Senate Banking, Housing and Urban Affairs
 Writes transit title of the bill
 Senator Dodd (D-CT) retired
 Leadership will likely pass to Senator Johnson (D-SD) and Senator
Shelby (R-AL) as ranking member
 Shift to rural states may have further adverse implications for transit
intensive states
 Senator Schumer, however, remains second most senior Democrat

14. Declining Federal Share…

15. Steady Growth for New York
Total $B $11.77 $13.79 $16.55
ISTEA TEA-21 SAFETEA-LU
$6.20
$5.57
$10.07
$6.48
$8.49
$5.30
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$billions
Transit
Highways

16. NY’s Share Eroding
Highways Transit
ISTEA
92-97
5.63% 21.2%
TEA-21
98-20
5.16% 19.7%
SAFETEA-LU
04-09
4.63% 17.6%

17. “Equity” Bonus
Rate of Return
ISTEA 90.0
TEA-21 90.5
SAFETEA-LU
– 2005 90.5
– 2006 90.5
– 2007 91.5
– 2008 92.0
– 2009 92.0

18. CT: $1.28
DE: $1.64
NJ:$0.92
RI: $2.18
MA: $0.92
CA
$0.92
VT: $2.06
NH: $1.00
WA
$0.92
OR
$1.02 ID
$1.44
NV
$0.94
AZ
$0.92
UT
$0.94
NM
$1.14
TX
$0.92
MT
$2.27
ND
$2.07
SD
$1.98WY
$1.52
MN
$0.92
OK
$0.92
CO
$0.92
NE
$0.99
KS
$0.96
IA
$0.92
MO
$0.98
AR
$1.05
LA
$0.95
WI
$1.03 MI
$0.92
IL
$0.92
IN
$0.92
OH
$0.92
AK
$5.27 FL
$0.92
GA
$0.92
SC
$0.92
ME
$0.96
NC
$0.92
AL
$1.07
MS
$0.95
TN
$0.92
KY
$0.96
WV
$1.69
NY
$1.10
PA
$1.13
VA
$0.92
MD$0.92
DC$4.25
Donor/Donee
Legend
Donee
Donor
HI $1.75

19. Prospects of New York getting a larger share
of federal funding…
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
$0
$500
$1,000
$1,500
$2,000
$2,500
$inmillions
Year
NYS Apportionments/Allocations NYS Percent Share/National Total

20. Message to Congressional Delegation
 Transportation matters!
 Need a “clean” long-term extension
– Allows states to plan for larger projects
– With new Congress – struggle to get better deal than
current law

21. The Financial Backbone
is All But Broken…

22. -$10.3
$41.9
$31.6
-15
-10
-5
0
5
10
15
0
5
10
15
20
25
30
35
40
45
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
($billions)
Federal Highway Account of the Highway Trust
Fund: Receiptsand Outlay Discrepancy
Negative Annual Cash Flow Highway Account Outlays Highway Account Receipts
*Excludes $8.017 billion transfer from General Fund to Highway Account of HTF in September 2008.
**Excludes $7 billion transfer from General Fund to Highway Account of HTF in July 2009.
Actual Estimated

23. Decline in Purchasing Power of Motor Fuel Taxes
(Based on Inflation since 1993)
0
10
20
30
40
50
60
70
80
90
100
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Year
Percentage

24. NYS General Fund Transfers into the DHBTF
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
$inmillions

25. “Debt service for MTA and DOT by 2014 will be
over $3.6 billion annually.”
Mary Ann Crotty
November 16, 2010
NYS Business Council

26. State Revenues Available for Infrastructure Investment
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
$inmillions
Debt Service/DHBTF Revenue
Debt Service Revenue Available for Investment

27. “Thus, State is, in effect, spending more than ever
before on its transportation program but getting
less.”
Lieutenant Governor Ravitch
November 17, 2010

28. Trust Fund Spending
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
$inmillions
Debt Service Revenue Available for Investment General Fund Transfers

29. “New York’s recurring revenues to support its
transportation related debt are not increasing at
anywhere near the rate at which debt itself is
increasing. As a result, the state confronts a
crippling debt service crisis.”
Lieutenant Governor Ravitch
November 17, 2010

30. Low Hanging Fruit…

31. Revenue
 The current federal/State system relies on fuel taxes
 We have seen a marked decline in revenues
 Two National Transportation Commissions/one Debt Commission have called
for an increase in gas tax (short-term)
 In the mid- to long-term, study the feasibility of alternatives, such as Vehicle
Miles Traveled Fee

32. Deficit Reduction Commission
 Report Released November 10
 Recommended increasing gas tax by 15 cents/gallon
 Gradual increase beginning in 2013
 Revenue exclusive for transportation/not deficit reduction
 Recommends change in budgetary treatment/mandatory
spending
 Relieve general fund transfers
 Enough to support a six-year $450 billion bill

33. In The Interim…
 Without longer-term action/infusion of funding
– Short-term extensions limit opportunity to plan/make longer-term
investment decisions
– Uncertainty is increasing the costs for transportation-related
projects
– Jobs in the transportation sector will be lost without an infusion of
funds and longer-term predictability

34. QUESTIONS ?
Ron Epstein
Chief Financial Officer
New York State Department of Transportation
50 Wolf Road
Albany, New York 12232
(518) 457-8362
repstein@dot.state.ny.us