The deal, Hevesi said in a statement, “saves $1.3 billion in the short term by not paying any principal for five years while increasing costs by $1.77 billion in the remaining 15 years.” This, he asserted, represents “another case of the State using a public authority to do back door borrowing and impose huge costs on an unaware public.”

It’s hard to argue with the comptroller on this one.

In fact, the Governor and the Legislature should go back to the drawing board with their entire $36 billion, five-year transportation capital program. As it now stands, the package is far too dependent on backdoor borrowing and devotes far too much money to costly and overly ambitious mass transit expansion projects. State officials should give New Yorkers what they need and can afford — a leaner highway and transit capital program that concentrates on essential maintenance and modernization of antiquated facilities and equipment, such as New York City’s subway signals.

Unfortunately, there’s no reversing the bad decisions made by Albany at the end of the 1990s, when the state depleted its dedicated highway funds and paid for a previous mass transit capital program through an enormous and costly refinancing of the MTA’s outstanding debt. To help underwrite improvements in the years ahead, the Legislature and the Governor need to work much harder to come up with savings within the transportation system. This should include the kind of public-private partnerships already proposed by Pataki based on successful projects in other states, along with competitive contracting of transit operations.

The bond restructuring opposed by Hevesi isn’t the only questionable part of the transportation capital plan. Another key element of the package — this one supported by the comptroller — is a $2.9 billion bond issue up for approval by voters in November. If approved, how would the proceeds be spent? The answer to this question developed in typical back-room Albany fashion — pursuant to a “memorandum of understanding”, or MOU, that only emerged into the light of day in mid-July, more than two weeks after the end of the legislative session.

The MOU includes the stipulation that wages on all bonded projects — including those carried forward by private rail and transit operators — must be rigged to union scale. This will inflate costs and probably make some smaller projects completely unfeasible.