Comptroller Edward V. Regan of New York on Friday blasted as "bizarre" and "fiscal gimmickry" state budget legislation that calls for almost $500 million of bonding for highway rehabilitation.
Legislation pending before Gov. Mario M. Cuomo would authorize the New York State Thruway Authority to sell up to $177 million of "pothole" bonds for state highway projects, the comptroller said in a statement.
And up to $294 million of local highway aid would be authorized through bonds secured by service contracts with the state's budget director, subject to appropriation by the Legislature. The proposed bonding program is part of a $1.2 billion highway and mass transit fund included in the fiscal 1992 budget the Legislature passed last week.
The comptroller noted that the state would then pay debt service to the authority, creating additional taxpayer-supported debt without voter approval. The comptroller's remarks and his review of the bills have been transmitted to the governor.
Mr. Regan, warning against the state's practice of using bond sales to provide budget relief, said in a statement, "Legislative actions to finance, through the issuance of non-voter approved debt, state highways, and local highway assistance payments, have risen to new heights in fiscal gimmickry."
"These actions not only continue the very unwise practice of bonding out state highway maintenance by the thruway authority instead of using general operating revenues, they create an unprecedented and bizarre new gimmick -- the financing of local highway aid payments from bonds of the same authority," he continued.
Lawmakers who sponsored the bill could not be reached for comment.
The comptroller's office has also begun an audit of the Thruway Authority to review its adherence to the authority's original mission, its decision-making process, and its use of taxpayer dollars.
The comptroller is criticizing a bill passed last week by the state Legislature that calls for the creation of a fund that would allocate close to $1.2 billion each year for roads and mass transit and that is slated to begin gathering money in 1993.
The plan is an alternative to one proposed by Gov. Cuomo that would have sent funds collected from a 10 cents increase in the state's gas tax to a dedicated highway fund. Mr. Cuomo's plan called for a $500 million revenue bond program to finance local bridge and highway rehabilitation secured with gas tax revenues earmarked for the fund.
Lawmakers oppose the gas tax increase and instead offered a controversial package of fees and taxes to finance road and mass transit projects. The new proposed dedicated trust funds would be partially funded by revenues from the 1990 increase in the highway use tax, which is estimated to bring in $60 million. An additional $50 million will be raised by a 15% increase in motor vehicle registration fees.
Revenues generated from an increase in the petroleum business tax would provide the largest share of the fund's revenues and would be diverted into them beginning in 1993. The money is currently earmarked to help plug the state budget deficit.
Previous transportation repairs were funded by the $3 billion Rebuild New York Bond Act of 1988, which will expire in December, 1992. The trust funds would then take effect April 1, 1993. The bond act was supported by voters at the ballot box.
The bond sales for the highway repair program would not be placed on the ballot, Mr. Regan said. "These back-door financings are allowed to flourish because of legislative unwillingness to impose the same type of discipline on the longterm borrowing process as it did last year on short-term borrowing pr ctices," he observed.
Mr. Regan also took aim at another bill that would permit the Thruway Authority to sell bonds to buy Interstate 84, a highway owned by the state's Department of Transportation. The financing would provide budget relief to the state in fiscal 1992, which began April 1 without a budget in place.
"The irony here is that the thruway authority would maintain a road it doesn't even own. One could say facetiously that this is the beginning of the state Department of Transportation becoming a wholly owned subsidiary of the thuway authority," he said.
A similar bond financing was used in March, when the authority sold $30 million of revenue bonds to buy Interstate 287 from the Department of Transportation. The bulk of the proceeds from the sale were turned over to the state to provide budget relief for fiscal 1991, which ended March 31.
