New York could benefit from a more comprehensive assessment on the billions allocated yearly for capital projects, according to State Comptroller Thomas DiNapoli.
An Aug. 29 report released by DiNapoli showed that the Empire State expects to spend an average of $13.4 billion in each of the next five years on infrastructure initiatives. New York’s chief fiscal watchdog found that planning and financing of capital needs, including from public authorities, is not fully integrated or coordinated with no public reporting of the state’s assets.
“Effective planning will help ensure that public resources are put to good use and that critical assets are well-maintained," DiNapoli said in a statement. "New York needs to develop a better strategy and a clear roadmap for its infrastructure investments."
The comptroller’s report noted that five-year assessments of capital needs now required by state agencies is inadequate for assets that have “significantly longer” lifespans such as bridges, roads and buildings. DiNapoli recommends the creation of a new council that would be charged with developing a more comprehensive infrastructure planning process that includes preparing a 20-year strategic plan that would be updated every two years.
The 2020 fiscal year capital plan projects $66.8 billion in spending through 2024 marking a $14.2 billion, or 27%, increase from the previous five-year period. While transportation comprises the largest share of total projected spending over the next five years at $27.5 billion, DiNapoli noted that its 38.4% share represents a decline from 47.5% over the past 10 years. Around $9 billion is targeted at economic development projects, which would mark a “significant” rise from 8.8% of spending to an estimated 13.5% in the current five-year plan.
DiNapoli’s analysis said that bonds issued by public authorities are expected to finance 54.2% in the current capital plan, up from 48.5% over the last five years. When factoring in general obligation debt approved by voters, 57.4% of capital spending is projected to be funded through borrowing over the next five years.
The New York Division of Budget expects to spend $4 billion from monetary settlements for capital purposes over the course of the five-year plan. Since 2014, New York has received more than $12.7 billion in financial settlements from various financial and other institutions, according to DiNapoli. The state spent $4.1 billion of these funds for capital expenditures between the 2016 and 2019 fiscal years.
New York's GO bonds are rated Aaa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.
