June 27, 2019

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Whose money is it anyway?

Federal and state government infrastructure policy legislations continue to get more interesting – or frustrating – each week
Whose money is it anyway?

You might take your pick, but the big question remains whether these would lead to the desired solution.

On Sunday, New York State Assembly and Senate members, voted upon various budget bills, including the controversial congestion pricing plan for New York City. This was passed by the assembly and the bill tabled to the governor. Once signed, it would make NYC the first US city ever to introduce such a measure.

While the plan would impose tolls on drivers who travel below 60th street, details of how congestion pricing would exactly work are still unclear. The deadline to implement the plan is December 2020, however it is understood that tolling might begin earlier.

In theory congestion pricing is a good move and has been successful elsewhere,  but a recent poll already shows that 54% of New Yorkers are not pleased by the plan.

It is being touted as essential for both funding and reform of the New York Metropolitan Transport Authority (MTA). An estimated $1.5bn in annual revenue generation from congestion-based tolling is expected to give the MTA bond financing capacity of $15bn, but this is not free money and could potentially have an adverse impact on MTA’s debt service and credit standing.

And all of this for the subway system, which may be bleak but is not the only large state infrastructure crying for attention. The estimated $12bn NY-NJ Gateway Tunnel still faces political gridlock and cannot potentially move forward with state funding alone. But federal funding for a large project in one part of the country may mean pulling funds away from another.

Political ambitions are often the motivation for large policy measures, but if all the load is to fall back on taxpayers after all, the funding could backfire.

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Federal and state government infrastructure policy legislations continue to get more interesting – or frustrating – each week

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