Albany, NY – In New York, Trump Infrastructure Plan Prompts Questions

Albany, NY – If President Donald Trump needs help in picking projects for his $1.5 trillion infrastructure program, he needs only to look to his home state of New York, where the list of mega projects needing billions of dollars has been piling up for years.

It’s unclear however just how much — if any — new money New York can expect for its two most pressing transportation needs. The beleaguered New York City subway system needs extensive upgrades and repairs following decades of underinvestment. And a long-awaited Hudson River rail tunnel to New Jersey, critical for service throughout the Northeast Corridor, will require at least $13 billion.

Of the $1.5 trillion, Trump’s plan has relatively few new federal dollars — some $200 billion over 10 years. Cities and states that apply for grants could use the money for no more than 20 percent of cost of a project, using local taxes, fees, tolls or private investment to make up the rest.

“Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private-sector investment,” Trump said during Wednesday’s State of the Union address.

While that might make sense for smaller projects, transportation experts and state officials say New York doesn’t have the resources to foot most of the bill for projects like the rail tunnel, known as Gateway, a decades-old proposal to relieve congestion and eliminate a chokepoint that is hurting the country’s entire eastern rail corridor.

The plan offers little help for the city’s subways either.

“I am, if anything, less optimistic,” said Nick Sifuentes, executive director of Tri-State Transportation Campaign, an organization that advocates for investments in transit in the New York region. “We should be very concerned that the federal government has said ‘we’re not interested in doing real infrastructure development.’ You would think a president from New York would understand the importance.”

The federal government typically provides 80 percent of the funding for capital expenditures on highways, with state and local governments coming up with the rest. On transit projects, the federal share typically ranges from 50 percent to 80 percent, according to the American Association of State Highway and Transportation Officials.

Under Democratic Gov. Andrew Cuomo, New York has used public-private partnerships to spur big renovations at Kennedy and LaGuardia airports and at Manhattan’s Penn Station. In some cases, private investors get the rights to develop onsite or nearby commercial and retail space in exchange for their investment. In other examples elsewhere in the U.S., private investors financed roads or bridges in exchange for tolls or fees.

Public-private partnerships could hold promise for the Gateway tunnel project too, according to Chris Roux, a Los Angeles and Washington-D.C.-based attorney and infrastructure financing expert with the firm of Alston and Bird. He said a private group of investors could finance the construction of the tunnel in exchange for a long-term contract to operate and maintain it for several decades. But he cautioned that investors would want a good return.

“Gateway is so critical, not just for New York but for the whole country,” he said, adding that Trump’s proposal could be the start of a negotiation with states and Congress. “Read his book on how to negotiate. He throws these things out there and you don’t know where it’s going to end up.”

Under an agreement with then-President Barack Obama, a Democrat, New Jersey and New York agreed to pay for half of the tunnel, with the federal government picking up the rest. But the Trump administration has criticized the project’s cost and, in a letter to the states last December, a top federal transportation official referred to the deal as a “non-existent ‘agreement.'”

To state officials eager to start the tunnel project, the letter was a stinging disappointment. In a response, state Budget Director Robert Mujica wrote that New York looked forward to the details of Trump’s plan with the hope that “any national program with the ambition to improving our infrastructure must begin with Gateway.”