In Depth: New York state's gas tax profits
October 09, 2017 01:21 PM
New York state has one of the highest gas taxes in the nation. The money you pay at the pump is supposed to be helping to keep the state's road and bridges in good shape.
However, a NewsChannel 13 Waste Watchers investigation has found that's not happening. In fact, the way the system works now may be costing you money.
In 1991, lawmakers created a fund to pay for road and bridge work. Your gas taxes go into that fund. However, today only a small portion pays for actual work. The rest is for paying off debt and that's costing you interest.
Let's break it down. According to the comptroller's office, you pay about 33 cents in state tax on each gallon of gas. That's just state tax. That money goes into the dedicated highway and bridge trust fund. When the fund was first created, the majority paid for road and bridge work. Two years later, lawmakers allowed the Thruway Authority to take some of the money to issue bonds. Eight years after that, they let DMV take some to cover operating expenses and DOT got a slice of the pie for snow and ice removal. So what does that leave for road and bridge work?
"So this year, only approximately one dollar in five of the dedicated fund will go to new capital investments," explained Robert Ward, the Deputy Comptroller for Budget and Policy Analysis.
Let's be clear, work is still getting done, but with borrowed money. That means you are paying interest. NewsChannel 13 has been trying for weeks now to find out how much, but the Division of Budget hasn't been able to come up with a number. They did send us a statement making it clear they don't have a problem with incurring debt for road and bridge work. They said:
"We sell bonds to pay for the construction costs of most major capital assets. This is how municipal construction works."
However, Governor Cuomo had a much different opinion when he ran for office in 2010. His campaign released a policy book that year saying:
"New York used to fund routine maintenance costs on roads and bridges on a pay as you go basis."
Now it is almost entirely funded with state borrowing - hiding the cost in the short run while increasing the cost in the long run.
"The governor himself has talked about the fact that we've got about 60 percent of our major roads and 6,000 bridges in New York that are in need of repair," pointed out Mike Elmendorf with Associated General Contractors NYS.
He says half of their members do the heavy highway construction.
"I don't think that's news to any of your viewers. As they travel around, they're dodging potholes or looking at bridges that look like they've seen better days. It's pretty clear that we need more investment," he explained.
We should also note when the trust fund was created it was not supposed to be used as a debt service. NewsChannel 13 tracked down a copy of the law.
"Moneys in the dedicated highway and bridge trust fund shall be utilized for reconstruction, replacement, reconditioning and preservation of highways and bridges."
There is no mention of allowing the payment of debt service or operating expenses. However, almost immediately, amendments started pulling on the fund and opened the door to debt service payments.
As NewsChannel 13 researched this story, the state Division of Budget asked us to let you know that the state debt has declined by more than $5 billion over the last five years. Those are their calculations. However, the folks in the Budget Office still can't say how much you are paying in interest on the debt associated with this fund.
NewsChannel 13 will keep pushing for answers and share information as we get it.
Updated: October 09, 2017 01:21 PM
Created: May 01, 2017 01:35 PM
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