The unveiling of a financing plan for the Tappan Zee Bridge is becoming a classic chicken and egg scenario. New York State says it cannot project the toll increase for the new bridge until it knows whether it has been approved for a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan. But, the TIFIA application process has stringent criteria for a financing plan which has not yet been provided in detail in the State’s request. And, to top it all off, the State has not yet submitted a formal application for the TIFIA loan, despite insinuations that a loan approval process is underway.
State Thruway Authority Executive Director Tom Madison said in December that he is confident the State will secure a low-interest loan to fund at least a third of the project. — Newsday, Jan. 16, 2013
“We have been receiving very encouraging news for TIFIA and we are confident that the new bridge project will receive TIFIA support.” (New York State Thruway Authority spokesman Dan Weiller) — The Journal News, Jan. 24, 2013
Thruway officials said the bonds would be repaid with proceeds from a federal loan that the authority is confident it will secure from the U.S. Department of Transportation. — The Journal News, Feb. 7, 2013
Yesterday’s Newsday article confirms that the State did not yet officially apply for TIFIA financing. Indeed, the Federal Highway Authority’s TIFIA application submission page does not list the New York State Thruway Authority as a program applicant. The State has only submitted a Letter of Interest, an action undertaken in a grandiose press event in August 2012. But nearly six months later, the Federal Highway Administration (FHWA), which administers the TIFIA loan program, has not yet requested a formal application from New York State for the TZB project. Is it because the State has still not yet convinced FHWA that it has the financial means to finance this project? NYS Comptroller DiNapoli noted, “At this point, the authority has no definitive financing plan for the project, or for its overall capital program.”
The TIFIA statute clearly states that the TIFIA loan shall be repayable with “tolls, user fees, special assessments, tax increment financing, and any portion of a tax or fee that produces revenues that are pledged for the purpose of retiring debt on the project.” NYSTA is clearly having a difficult time getting its financial outlook in order. To help balance the books, the Authority transferred $85 million in annual costs to New York State and is laying off 234 people. Those are not actions that help instill financial confidence in the project. With 28 projects, including transit projects, competing for $17 billion ($1.75 billion is the total appropriation for FY2013 and FY2014, leveraging $17 billion in credit assistance), the State’s eligibility is sinking. Could a transit component have made the new bridge project a more attractive candidate? The lists of invited, and funded projects, will tell.