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Government Affairs Albany Update

January 30, 2004

Transportation Budget Hearing

On January 27th the Senate Finance and Assembly Ways & Means Committees, along with members of the Senate and Assembly Transportation committees, heard testimony on the Governor's proposed 2004-2005 budget. Testifying were Department of Transportation (DOT) Commissioner Joseph Boardman, the Metropolitan Transportation Authority (MTA) Executive Director Katherine Lapp, and the New York Roadway Improvement Coalition (NYRIC) as represented by its secretary, Steve Morgan. Testimony was also submitted by the NYS Transportation Engineering Alliance.

Commissioner Boardman outlined general funding levels, the transportation and trade routes in New York State, the DOT's efforts to make New York part of global trade routes, the recent efforts to forge stronger coordination between the various state transportation authorities and the DOT, and ongoing technology implementations. The Commissioner discussed the funding levels proposed by the budget in both 2003-2004 and the upcoming fiscal year. Commissioner Boardman also discussed other funding sources including the soon to expire TEA-21 extension. TEA-21 expired on September 30, 2003 but was extended by Congress for five months and is due to end on February 29, 2004. In his discussion of funding levels the Commissioner commented on the level of bridge deficiency which currently stands at 27.8% and the aging bridge infrastructure - the majority having been constructed between 1960 and 1974. The Commissioner took questions from Legislators which generally centered on the funding levels. Last year the legislature increased the DOT funding levels by $100 million bringing it to a total of $1.75 billion however that funding was not appropriated. This year the Governor's proposed budget is again at $1.65 billion. Legislators were concerned that the level of funding is again to small and generally favored a larger funding level to address deficiency concerns and low letting levels.

The MTA's testimony outlined the recent events at the MTA including the aversion of a strike by its employees in 2002, the 2003 toll increase, and the development of a number of fiscal problems over the last two years. The MTA currently boasts of a ridership of over 2.3 billion people and services routes throughout the greater New York metropolitan region stretching as far as Metro North and the Long Island Rail Road. Ms. Lapp detailed the recent upgrades to the systems and the investments made - exceeding $1 billion for the Fulton Transit Center and the South Ferry Terminal alone. Under new fiscal procedures adopted in 2003, the MTA board adopted a 2004 budget that projects operating expenses of $8 billion with a $36 million cash balance. However, under its four year plan, gaps are projected of $688 million in 2005 and in the billion dollar range by 2006 and 2007. In this regard, it is crucial that the Congress reauthorize TEA-21 in a manner that favors continued support for mass transit and "new start" monies for such projects as the Second Avenue Subway and East Side Access.

Formal testimonies from representatives of the building and engineering trades ended the hearing. NYRIC's main points centered on the overall level of transportation construction funding over the last ten years. While the state budget has increased by over 60 % during this time, the state DOT capital plan funding has remained constant. Also, last year the Legislature restored $100 million in construction letting and $37 million in engineering services cut from the budget. This was treated as a one-time unfunded legislative addition and was not included in the 2003-2004 construction program. NYRIC also stated that with the Dedicated Fund running dry, recapitalization and other funding sources must be identified for the capital program to move forward. TEA-21 reauthorization also remains a key to New York State's transportation infrastructure and it is hoped that federal highway funding, usually averaged at $1.4 billion, is realized at the level of $1.7 billion.

For copies of the testimonies contact the Assembly (518) 455-4218 or Senate (518) 455-2558 public information offices.

Outsourcing Legislation Introduced

Assemblyman Brodsky has introduced legislation (A.9567) which would prohibit the outsourcing of jobs by business entities receiving state developmental assistance. If an entity is found to have moved employment, jobs or positions outside of New York State, it would require the entity to reimburse the state any assistance received to date and bars them from receiving future assistance for five years.

The bill defines developmental assistance as "including tax expenditures made for the purpose of stimulating economic development of a corporation, industry, geographic jurisdiction or any other sector of the state's economy, including but not limited to industrial development bonds, training grants, loans, loan guarantees, enterprise zones, empowerment zones, tax increment financing, fee waivers, land price subsidies, infrastructure whose principal beneficiary is a single business or defined group of businesses at the time it is built or improved, matching funds, tax abatements, tax credits and tax discounts of every kind, including corporate franchise, personal income, sales and compensating use, raw materials, real property, job creation, individual investment, excise, utility, inventory, accelerated depreciation, and research and development tax credits and discounts."

The Business Council strongly opposes this legislation.