NEW YORK CITY-The opening sentence of Lt. Gov. Richard Ravitch’sreport on transportation infrastructure, released this pastThursday, spells out the problem in stark terms: “New York Statecurrently lacks the revenues necessary to maintain itstransportation system in a state of good repair, and the state hasno credible strategy for meeting future needs.” Developing thatstrategy will entail the state mapping out what Ravitch calls “along-term blueprint that explains how it will meet itstransportation needs. Otherwise, the state risks losing its abilityto deliver projects that are essential for preserving safety,improving quality of life and maintaining economiccompetitiveness.”

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It’s an argument with which Richard T. Anderson, president ofthe New York Building Congress, wholeheartedly concurs. “LieutenantGovernor Ravitch has produced a report that expertly lays out thechallenges and choices we must confront regarding New York’s vastnetwork of roads, bridges and mass transit,” Anderson says in astatement. “His report can serve as a blueprint for the Cuomoadministration and the State Legislature, which will need toquickly develop a set of priorities and financing options toreverse the recent declines in the condition of our highways,physically maintain the existing transit system, and continue withsuch major projects as the Second Avenue Subway and East SideAccess.”

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Although the issues Ravitch describes exist statewide, they’reespecially germane to New York City and its metropolitan area.Large-scale capital projects such as the Second Avenue Subway andEast Side Access, both under the aegis of the MetropolitanTransportation Authority, face funding shortfalls. These twoprojects alone account for $3.5 billion of the $10-billion gap inthe MTA’s current five-year plan.

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“The MTA is in the middle of its largest system expansion inmore than four decades, and there is now legitimate worry that theMTA will have great difficulty in finding resources sufficient tocomplete its current slate of mega-projects,” Ravitch writes.

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Then there are some of the largest state-of-good-repairheadaches, including the Kosciusko Bridge connecting Brooklyn andQueens over Newtown Creek and the Tappan Zee Bridge connecting thecity’s northwestern suburbs with its northern ones across theHudson River. Both have reached the end of their useful lives andshould be replaced, the Ravitch report states. The problem isactually paying for the jobs; the Tappan Zee project alone has beenestimated at $18 billion.

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Long-term bond sales represent the logical funding mechanism forcapital projects, Ravitch writes, while borrowing for operatingexpenses “can be disastrous because it constricts borrowingcapacity by driving up debt service costs. New York’s recurringrevenues to support its transportation-related debt are notincreasing at anywhere near the rate at which the debt itself isincreasing. As a result, the state confronts a crippling debtservice crisis.”

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While acknowledging that “underlying economic conditions” makeit difficult to plan for capital expenditures 20 years out, Ravitchsays the state needs a five-year blueprint “at the very least.” Headds, “Because of the constraints on the state’s resources, NewYork must refocus its transportation program to emphasizestate-of-good-repair, safety and security, more efficient andcost-effective project delivery, and better regional planning. Itsimply will not be possible for the state to fund every desirableproject. While politicians often speak of doing more with less, thefiscal reality of the next decade may dictate that New Yorkerslearn to do less with less.”

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Ravitch writes that making tough choices between “equallycompelling projects” will be necessary. He points out that both theincoming governor and the legislature will have to confront seriousquestions: “How large a transportation capital program can New Yorkafford at this time? How should the state prioritize and financeits slate of multi-billion-dollar mega-projects? How will New Yorkrespond if Washington fails to fulfill funding expectations?”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.