ALBANYThe Business Council of New York State today announced its support for the proposed $3.8 billion transportation bond act that will be put before voters across the state next month.
The decision reflects The Council's recognition that continued economic growth will require continued investments in the infrastructure that makes commerce in New York State possible.
Funds from the bond act would supplement money from other sources for projects identified under capital plans of the state Department of Transportation (DOT) and the Metropolitan Transportation Authority (MTA). The other funding sources for these capital plans include state, federal, and municipal governments and authorities.
A memorandum of understanding (MOU) released last month outlined how funds from the bond act would be spent. The MOU provides details on allocations of: $1.6 billion for the MTA capital plan; $1.8 billion for the DOT capital plan; and $400 million for canals, non-MTA transit projects, aviation projects, and rail and port projects.
The Council noted that rejection of the bond act would probably delay completion of some projects planned under the five-year DOT and MTA capital plans. Moreover, a decrease in state funding for transportation could hamper the state's ability to draw federal money under the federal Transportation Equity Act for the 21st Century (TEA-21) after its expected reauthorization in 2003.
The Council has frequently expressed concern about the state's high levels of debt, and has supported aggressive debt reform for New York State. New York State's debt was $4,030 per capita as of 1998, more than twice the national average. In addition, annual debt service on the state's debt has grown sharply in recent years, to $3.7 billion in the 1999-00 fiscal year. While New York's bond rating has been upgraded twice in recent years, the state's credit rating remains among the lowest in the nation.
The focus of The Council's concerns, however, is debt incurred by "back-door borrowing," which is not subject to voter approval and which is not backed by the full faith and credit of the state. If endorsed by voters, the proposed borrowing would likely carry a lower interest rate than much of the state's debt that was incurred without voter approval.
The Council reviewed the bond act with key government officials, with member companies, and with local and regional chambers of commerce across the state to evaluate the likely economic-development impact of projects to be funded by the bond act.
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