Gov. Cuomo is going to have to find some new tricks to plug the projected $14.5 billion hole in the state budget: The $60 billion he’s begging Congress for is unlikely to materialize any time soon.
One example of the needed creativity comes from the Reason Foundation, which reports that leasing the Thruway could net the state between $1 billion and $4.5 billion.
Reason’s Bob Poole, one of the nation’s top transit wonks, looked at leases under long-term private-public partnerships in America, Europe, Australia and Asia and estimated the medium-range profit to the state would be $2.8 billion for a 50-year lease — and that’s after paying off billions in outstanding Thruway bonds.
The Chicago Skyway lease let the Windy City pay down debt, while the Indiana Toll Road lease provided that state with money for major capital infrastructure investment.
Reason suggests doing something similar here with the proceeds: Fund capital infrastructure projects, pay down debt (which would reduce interest payments and could increase the state’s bond rating) or bring the underfunded pension system closer to solvency.
The Thruway should attract plenty of bidders. “Despite the pandemic and recession, car usage is nearly back to normal levels in some areas and there continues to be great interest in long-term investing in U.S. toll roads,” Poole says. “With today’s low interest rates, these types of acquisitions are still attractive to global toll road companies, infrastructure investment funds and pension funds.”
New Jersey drivers were outraged when Gov. Jon Corzine sought to lease Garden States toll roads in 2007, but that’s because his plan promised heavy hikes — four 50 percent increases over the agreement’s duration. Today, Poole notes, “most toll road leases limit annual toll rate increases to the rate of inflation, so drivers and truckers are protected.”
Such imaginative thinking is desperately needed in Albany right now; the state’s traditional, politics-driven “creativity” continues to fail.
For example, State Comptroller Tom DiNapoli this month released a scathing audit of Cuomo’s signature, scandal-plagued “Buffalo Billion” program, which aimed to boost the city’s economy: “Despite millions of dollars of state funding, selected high-tech projects have yet to create the expected number of jobs,” the report stated. And oversight failures allowed cash to flow to barely vetted companies, the audit found.
Government has never proved adept at investing wisely. Better to unlock assets and let the private-sector take over — with oversight — in exchange for money that the cash-strapped state so desperately needs.
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