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.
JOB CREATION
HR&A Advisors, Inc. NY State Infrastructure Policy | 4
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.
HR&A Advisors, Inc. NY State Infrastructure Policy | 6
Today, New York State infrastructure is delivered through over 50 agencies and authorities, with limited cooperation or coordination among them.
TRANSPORTATION ENERGYWATER
HR&A Advisors, Inc. NY State Infrastructure Policy | 7
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
HR&A Advisors, Inc. NY State Infrastructure Policy | 9
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.
HR&A Advisors, Inc. NY State Infrastructure Policy | 10
GATEWAY PROGRAM /
TRANS-HUDSON CAPACITY
CLIMATE RESILIENCY
POWER GRID MODERNIZATION
MTA FAST FORWARD
NYS THRUWAY
HR&A Advisors, Inc. NY State Infrastructure Policy | 11
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.
HR&A Advisors, Inc. NY State Infrastructure Policy | 12
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.
HR&A Advisors, Inc. NY State Infrastructure Policy | 13
20-year needs assessment feeds into 5-year capital plan
MTA NYS DOT
Irregular capital needs assessments conducted; no transparently-developed capital program
?
HR&A Advisors, Inc. NY State Infrastructure Policy | 14
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.
NY State Infrastructure Policy | 15
Source: Governor Andrew M. Cuomo Pressroom
HR&A Advisors, Inc.
AIRPORT MODERNIZATION
SUBWAY ACTION PLAN
STATEWIDE BROADBAND
IMPLEMENTATION
CLEAN WATER INFRASTRUCTURE
AIRTRAIN EXPANSION
HR&A Advisors, Inc. NY State Infrastructure Policy | 16
KEY FINDINGS
Projects – both expansion and state of good repair – are not uniformly assessed based on alignment with statewide goals.
HR&A Advisors, Inc. NY State Infrastructure Policy | 17
The following statewide goals are not consistently used to assess and prioritize infrastructure investment.
ECONOMIC GROWTH AND VITALITY
LONG-TERM RESILIENCY EQUITY LIFECYCLE COSTS
HR&A Advisors, Inc. NY State Infrastructure Policy | 18
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.
HR&A Advisors, Inc. NY State Infrastructure Policy | 20
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.
NY State Infrastructure Policy | 21
Sources: Data.ny.gov, Streets Blog USA, The Hill, Eno Center for Transportation
HR&A Advisors, Inc.
Mill
ion
s o
fb
arr
els
0
160
140
120
100
80
60
40
20
19
60 1
96
2 19
64 1
96
6 19
68 1
97
0 19
72 1
97
4 19
76 1
97
8 19
80 1
98
2 19
84 1
98
6 19
88 1
99
0 19
92 1
99
4 19
96 1
99
8 20
00 2
00
2 20
04 2
00
6 20
08 2
01
0 20
12 2
01
4 20
16
Motor Gasoline Consumption in NYS
Series…
What Next For the Mass Transit New Starts Program?
HR&A Advisors, Inc. NY State Infrastructure Policy | 22
KEY FINDINGS
Financing is limited by the state debt cap, meaning that financing available for infrastructure is likely to decrease in the coming years.
HR&A Advisors, Inc. NY State Infrastructure Policy | 23
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).
HR&A Advisors, Inc. NY State Infrastructure Policy | 25
RECOMMENDATION #1
Establish a State Office of Infrastructure to lead statewide infrastructure planning.
• Housed in Executive branch• Led by professional executive with infrastructure experience
HR&A Advisors, Inc. NY State Infrastructure Policy | 26
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
HR&A Advisors, Inc. NY State Infrastructure Policy | 27
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
HR&A Advisors, Inc. NY State Infrastructure Policy | 28
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
HR&A Advisors, Inc. NY State Infrastructure Policy | 29
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
HR&A Advisors, Inc. NY State Infrastructure Policy | 30
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
The Most Important Fiscal and Economic Issues Facing New York State
Infrastructure Policy
December 2018
Source: New York State Thruway Authority