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No Plan, No Problem: NYSTA Board Authorizes $500 Million in Borrowing for New TZB Construction

The proposed Tappan Zee Bridge still lacks a financing plan. (Source: Transportation Nation)

Last Thursday, the NYS Thruway Authority announced that it will be borrowing $500 million to pay for the initial construction phases of the Tappan Zee Bridge replacement project. Unfortunately, the state still has not outlined a plan to pay back this half a billion dollars in borrowing, or any of the $4 billion it needs to borrow for the project, an issue flagged by the Newsday editorial board today.

The Thruway Authority recently gave itself a little financial wiggle room by offloading state police and other operating costs onto the state, but the authority’s ability to pay for the project remains limited. And without a financial plan, there is no way to know what assumptions about funding have been made and what will happen if those assumptions are wrong. Even New York State Comptroller Thomas DiNapoli, when signing off on the bridge project contract between the state and Tappan Zee Constructors, issued a warning that the project must have a financial plan.

The Thruway Authority has said all along that it anticipates receiving a TIFIA loan to help keep project costs down. But what if the loan amount is less than expected? Or what if it doesn’t come through at all – there are 27 other projects totaling over $35 billion competing with the bridge replacement project for a limited amount of funds. (Note also that TIFIA requirements very explicitly state a financing plan is necessary.) A decrease or absence of TIFIA financing means more money must be borrowed from the private sector, possibly leading to an increase in borrowing costs.

In the face of this uncertainty, the Thruway Authority continues to assert that the money borrowed will be paid back through related toll increases but has not been forthcoming with a proposed toll price. Toll revenue plays a big part in financing the new bridge.  Calls against tolls that are too high or for toll discounts, and even for scrapping the toll all together, will ultimately impact the state’s ability to meet the financial obligations of borrowing or put the funding of other transportation projects in jeopardy. The Thruway Authority should not rush to borrow money without a financial plan.  At this point, any haste should be focused on meeting the financial obligations of the TIFIA process rather than putting the state into more debt without a plan for how to pay that debt off.

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[…] With No Payback Plan in Sight, Thruway Authority to Borrow $500M for Tappan Zee (MTR) […]

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[…] With No Payback Plan in Sight, Thruway Authority to Borrow $500M for Tappan Zee (MTR) […]

dave bonan
dave bonan
11 years ago

this wasn’t thought of 50 years ago
now flash forward 50 years. it will get even more expensive with hopefully folks driving less.

Douglas Willinger
11 years ago

What about the toll money which about %5 goes towards maintenance?

It is obvious that drivers are being shortchanged, as is transit with the unjustified deletion of the proposed lower deck.

Again- where is the TSTC law suit on the decision to delete the lower deck?

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[…] York State Thruway Authority – Despite lacking a plan to pay for a new Tappan Zee Bridge, the Thruway Authority endorsed the idea of all-electronic tolling this […]

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[…] According to Brian Conybeare, Governor Cuomo’s special advisor for the project, there are many more months of design work to be done before construction begins, which allows time for the State to come up with a financing plan. Although it’s “big, bold and beautiful,” as Governor Cuomo contends in the video, the bridge is also not paid-for. […]

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[…] Thruway Authority — The State is planning to borrow $700 million to repay $500 million it borrowed to fund up-front costs for the new Tappan Zee Bridge. This kind of borrowing […]

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