When Gov. Andrew M. Cuomo tapped Robert L. Megna last week to head the New York State Thruway Authority, the appointment was widely recognized as a Capitol veteran wise in the ways of Albany.
But Megna – who enjoys Cuomo’s confidence as his longtime budget director – may be inheriting problems too daunting even for an Albany wizard. Not only must he manage the 570-mile Thruway, he also is saddled with paying for the biggest construction project in the state – a new $4 billion Tappan Zee Bridge – and an ancient and expensive canal system. Then there are these challenges for 60-year-old Thruway.
• A $26 million gap that Thruway trustees never addressed when they essentially adopted a deficit budget in December.
• The resignation of the authority’s chairman and its top two administrators in recent weeks amid reports that the state inspector general will soon issue a critical report on Thruway operations.
• Questions on how to pay for the new Tappan Zee over the lower Hudson River, especially since the governor promised during the fall campaign that he would not back a toll hike.
• Continuing criticism of the Thruway’s response to dozens of stranded motorists in the Buffalo area during the epic November snowstorm, leaving local officials unsatisfied.
• New barbs aimed at the authority’s reaction to a routine snowstorm on Jan. 9 when Lt. Gov. Kathleen C. Hochul took command of an “emergency operations center” and closure of the local Thruway system and other major state roads even after they were cleared and the weather improved.
• Speculation that the Thruway Authority and state Department of Transportation may share services and possibly merge.
It all baffles longtime Thruway students, especially since a steady stream of travelers paying tolls had kept the Thruway operating in the black for decades.
“For the first time in its history, the Thruway Authority is no longer self-sustaining,” said E.J. McMahon, president of the Empire Center for Public Policy. “We’ve lost something here.”
Megna declined an interview to discuss his plans and vision for the embattled agency he inherits. But even Thruway critics like Assemblyman Robin L. Schimminger, D-Kenmore, view him as ideal for the job.
“There is no question that the Thruway Authority has seen better times,” Schimminger said. “With the appointment of the highly regarded Bob Megna and others to the Thruway staff, I would hope for the good of the state and the authority that things will get better.”
For now, a $2 billion annual operation with a revenue stream guaranteed by the tolls of millions of vehicles each year suddenly finds itself foundering. Many blame the state canals after the Thruway inherited the system in 1992.
The idea at time of the canals’ transfer from DOT was to use the Thruway’s bonding power for extensive repairs needed throughout the 525-mile system. Now some say it is time for the Thruway to shed $80 million in canal expenses and return to its primary mission of running the interstate.
“It makes much more sense to return it to the entire state budget and citizens across the state, as opposed to subsidizing it by users of the Thruway,” State Sen. Patrick M. Gallivan, R-Elma, said last month of the canal.
“I would love to see that,” added Donna J. Luh, Western New York’s representative on the Thruway Authority.
But it is not the canal presenting the biggest costs.
The staggering price tag of building an engineering marvel across the Hudson’s widest expanse between Westchester and Rockland counties mainly contributes to the Thruway Authority’s problems. The U.S. Environmental Protection Agency in 2013 nixed $482 million in federal clean water funds planned for the Tappan Zee Bridge replacement, denying a sizable chunk of the $4 billion price tag.
And when Albany first proposed and then backed off a commercial toll hike for the entire system in 2013, operating funds for the Thruway grew scarcer – despite layoffs and major cutbacks.
“They’re building a $4 billion bridge without a plan to pay for it,” said McMahon of the Empire Center think thank. “And the rest of the system used to be subsidized in part by the [tolls from the] bridge they are now rebuilding.”
Paying for itself
The whole idea of an independent authority is to rely on dedicated revenue that allows the entity to “pay for itself,” McMahon explained.
“That’s what it did for almost 60 years until two years ago when they did not get the toll increase they wanted,” he said.
When Albany floated the commercial tolls balloon and then retreated amid howls from the trucking industry, several budget innovations – some labeled them gimmicks – have sustained the Thruway operation. One included saving $80 million by assigning Troop T – the State Police unit that patrols the Thruway – to the general budget.
Authority officials emphasize that, as they address a gigantic capital project at Tappan Zee, they are also launching unprecedented cost-cutting moves. By 2016, the Thruway will reduce operating costs by 30 percent – $150 million – versus pre-2011 estimates, the officials note.
But without a toll hike, McMahon pointed out, the authority is relying on more exotic methods of finance.
“There was a direct payment of $24 million to the Thruway Authority out of the general fund,” McMahon said, “and now we’re at the point where the Thruway is short again.”
In addition, McMahon and his government watchdog group describe as “astounding” the governor’s recent suggestion that more state money will be found – and possibly mentioned in next week’s State of the State and budget messages – for the current budget gap.
“Their situation is pretty plain from their financial documents,” he said. “Something’s got to give here.”
Other problems plague the system, such as the authority’s refusal to discuss in detail the travelers stranded in the November lake-effect storm that dumped as much as 7 feet of snow on parts of Erie County.
Schimminger and State Sen. Michael H. Ranzenhofer, R-Clarence, both criticized the authority for requiring an internal report before attending their storm review session as they did following a similar event in 2010.
“That’s all we wanted to do; we weren’t interested in a witch hunt,” Schimminger said. “But for whatever reason, the Thruway Authority backed out.”
And new criticism followed the delayed opening of the mainline and Niagara Thruway from Buffalo to the Pennsylania state line following a Jan. 9 snow fall that by Western New York standards was unremarkable – about 10-12 inches of snow.
Trucks traveling from Ontario to New York State were barred from the Peace Bridge as a result, while traffic piled up at other locations, too. Peace Bridge officials said trucks by the hundreds were stranded along the Queen Elizabeth Way toward Toronto, and truckers are still steaming.
“Everybody is up in arms because it cost everybody a boatload of money,” said one local trucking executive who asked not to be identified. “Buffalo is the last place to be shut down for 10 inches of snow.”
The trucker said his customers understood when snow measuring several feet paralyzed the area, but they were furious over the delays stemming from closures managed directly by the governor’s team and not local officials.
“Nobody could believe it,” he said. “This is Buffalo.”
An “emergency operations center” was set up at the Thruway’s Buffalo offices and Hochul and the state commander of the National Guard addressed a situation that consisted of clear skies and bare roads.
Thruway insiders complain that they get rapped for closing the road and rapped for keeping it open, labeling it a “no-win” situation. And Hochul emphasized throughout the Jan. 9 event that the state would rather err on the side of caution.
But critics now wonder if Albany’s top echelons will continue to make such local decisions. Schimminger said the Jan. 9 reaction contradicts earlier resolve to determine closures “on the ground here by local people who know the lay of the land.”
“That does not appear to have happened on Friday, Jan. 9,” he said.
Now it appears Megna will turn his immediate attention to even larger problems, and his assignment to the authority may underscore Cuomo’s concern.
In October, the governor proposed the concept of an infrastructure bank from the approximately $5 billion windfall the state expects from several lawsuit settlements with financial institutions. Some say such a fund could help address the road’s capital needs, including the Tappan Zee.
“The infrastructure bank will be a new financing and project management vehicle empowered to deploy alternative project delivery methods,” the Governor’s Office said in a news release.
In the process, the bank also would “leverage private investment to deliver large-scale, complex, strategic infrastructure projects vital to the state’s future success.”
Some predict the governor will outline more cooperation between DOT and authority – possibly even a merger – in his State of the State and budget speech Wednesday.
McMahon said construction industry reports already list $90 million for a new joint DOT-Thruway “transportation resource center” for suburban Albany. He warned that a Thruway-DOT merger would give state government access to toll revenue now proving insufficient even for the Thruway.
“There is great potential for blurring things,” he said. “The state will now have its hooks into something with a revenue stream.”
© 2015 The Buffalo News