2009-10 Enacted Budget Gap-closing Plan – Transportation

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Transportation Initiatives

The Enacted Budget funds a significantly enhanced DOT capital program for State and Local highways and bridges, and related engineering, due in large part to additional Federal aid provided through the American Recovery and Reinvestment Act of 2009 (ARRA).  ARRA funding will add over $1.1 billion of aid to the highway and bridge capital program.  The Enacted Budget also includes appropriations available for additional federal aid that will be awarded on a competitive basis for supplemental highway grants, high speed rail corridor and intercity passenger rail service assistance, and state-owned aviation facilities. 

Aid to transit systems will total $2.7 billion, reflecting a year-to-year reduction of $265 million.  The vast majority of the reduction is the result of lower revenues available from dedicated transit funds and a one-time accelerated aid payout of existing balances of dedicated revenues to the MTA in 2008-09.  The Enacted Budget provides a partial aid restoration of $20 million above the Executive Budget level.

The Enacted Budget  includes a $112 million addition to Consolidated Local Street and Highway Improvement Program (CHIPS) funding,  that brings total CHIPS aid to the 2008-09 level of $363.1 million.  This includes an increase of $96.5 million proposed by Governor Paterson subsequent to the Executive Budget to provide additional funding to localities that may not directly benefit from transportation funding available under ARRA. The Enacted Budget also includes a restoration of $20 million to the State’s mass transit systems.

Extraordinary Federal Aid

The Enacted Budget includes almost $3.7 billion in appropriations to accommodate transportation funding anticipated under the American Recovery and Reinvestment Act of 2009. This includes both formula aid and competitive/discretionary programs, as follows:

• State and Local Highways and Bridges: Capital funding designated for State and Local Highway systems, including related engineering, made available through Federal formula aid of $1.121 billion. 
• Rail Capital: Capital assistance for high speed rail corridors and intercity passenger rail service within New York supported by future competitive grants.
• Competitive Transportation Grants: Supplemental discretionary capital grants for transportation projects.
• Aviation Aid:  Capital assistance State-owned aviation facilities.
• Transit Capital Assistance: Capital funding designated for rural transit systems, made available through Federal formula aid of $26.3 million.

Gap-closing and Other Actions

The table and discussion below describes significant Enacted Budget actions.  The actual impact of some of these reductions may be mitigated by funding awarded by the federal government during the course of the state fiscal year.

*Savings represent reductions in General Fund subsidies to the Dedicated Highway and Bridge Trust Fund. In addition to displayed savings, associated bonding reductions will produce recurring debt service savings over many future years.

• Reduce Highway Construction. The annual core construction contract level for state-owned roads and bridges is reduced by $274 million, from the planned level of $1.891 billion to $1.617 billion. Savings include reduced debt service, which will grow substantially over time. (2009-10 Savings: $16 million; 2010-11 Savings: $45 million)
• Reduce Engineering and Administration. Commensurate with construction reductions, core engineering, program management and administrative levels are reduced by $108 million from planned levels of $815 million to $707 million. This reduction includes $73 million of consultant engineering contracts and $27 million of state engineering and administration. An additional reduction of $8.4 million reflects resources for traffic signal control activities transferred to DOT maintenance and operations. (2009-10 Savings: $18.6 million; 2010-11 Savings: $42.9 million)
• Reduce Rail and Aviation Programs. Core rail capital appropriations are reduced by $10 million from planned levels of $42 million to $32 million, and a rail operating subsidy is reduced by $2.5 million from planned levels of $5 million to $2.5 million. Core aviation capital funding is reduced by $4 million from planned levels of $24 million to $20 million. (2009-10 Savings: $8 million; 2010-11 Savings: $9 million)
• Re-estimate Maintenance Costs. The budget adjusts funding levels for core maintenance activities to reflect recent price declines in commodities such as diesel fuel. Even after this adjustment, year-to-year spending for highway and bridge maintenance increases by nearly $57 million, or 10 percent. (2009-10 Savings: $11.6 million; 2010-11 Savings: $27.3 million)
• Multi-Modal Program Restoration. Proposed elimination of $100 million in multi-modal program allocations ($50m from 2008-09; $50m from 2009-10) is fully restored. (2009-10 Costs: $0 million; 2010-11 Costs: $1 million)
• Increase CHIPS Authorization. Capital aid to local governments for highway and bridge projects under the Consolidated Local Street and Highway Improvement Program (CHIPS) is increased by $112.2 million over Executive Budget levels to $363.1 million, equivalent to 2008-09 funding levels. This includes an increase of $96.5 million proposed by the Governor subsequent to the Executive Budget, in part, to provide additional funding to localities that may not directly benefit from transportation funding available under the American Recovery and Reinvestment Act. (2009-10 Costs: $5.4 million; 2010-11 Costs: $14.0 million)
• Reduce Transit Aid. A General Fund transfer to the upstate transit account is reduced by reduced by $4 million. (2009-10 General Fund Savings: $4 million; 2010-11 General Fund Savings: $0)
• DMV Savings Actions. These actions include several small administrative actions, which save the Department $1 million annually. (2009-10 Savings: $1 million; 2010-11 Savings: $1 million)
• Various Fee Increases. The budget enacts a 25 percent increase in most vehicle registration and licensing fees. In addition, the Auto Rental Tax is increased from 5 percent to 6 percent and the Highway Use Tax Renewal Fee is increased from $4 to $15. These additional revenues will be deposited to the Dedicated Highway and Bridge Trust Fund to support DOT and DMV activities. (2009-10 Savings: $95 million; 2010-11 Savings: $ 151 million)