construction-8580380New Yorkers pay the second highest motor fuel taxes in the country*, largely to finance a dedicated state fund that was created over 20 years ago to continuously pay for construction and rehab of highways and bridges. However, as the state comptroller reports today, the Dedicated Highway and Bridge Trust Fund “no longer serves its original purpose of assuring reliable, predictable investment in the future of the State’s transportation infrastructure.”

“The dollars from New York’s motor fuel tax and other dedicated revenue sources, ostensibly intended for new transportation-related capital investment, are instead going primarily to repayment of debt from prior years and current day-to-day operational expenses,” the report says.

This is not a new story — today’s report is an update of one the comptroller issued a few years ago — but the diversion has been getting worse. State Sen. Thomas Libous has repeatedly introduced legislation that would protect the fund against raids, but Governor Andrew Cuomo has not addressed the core transportation funding issue here.

The breakdown of the dedicated fund is particularly disturbing in light of another trend: the crowding out of transportation capital by other “investments” in other areas.

In 2006, as depicted below, 55 percent of the state’s capital disbursements went for transportation purposes, including mass transit as well as highways and bridges. This year, the transportation share comes to 47 percent, and by 2019 it is slated to drop to just 44 percent. The expansion in capital spending projected under Cuomo’s 2015 Executive Budget would instead be devoted mainly to “economic development” purposes and to a proposed $2 billion Smart Schools Bond Act.

fuel-tax-1069105

Under the 2014 enacted budget, capital expenditures on highways and bridges were projected to total $19.742 billion by 2018.  But under Cuomo’s latest budget proposal, the five-year total would come to $19,462, a decrease of $280 million from what was projected just a few months ago.

Federal, state and local fuel taxes in New York average a combined 68 cents per gallon. Only California, at just under 71 cents, is higher. The nationwide combined average is about 50 cents per gallon.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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