Troubling Trends for City Infrastructure
June 20, 2012
Around Town – By Neal Tepel
The New York City Fiscal Year 2013 Capital Commitment Plan released in May shows strong but slowly decreasing levels of investment through the conclusion of the Mayor’s term in 2013. By 2016, however, the Mayor’s budget forecasts investment declining more rapidly to levels last seen more than a decade earlier. According to an analysis by the New York Building Congress, 2010 was the capital investment peak of the Bloomberg Administration, with spending at $10.5 billion. Spending remained strong in 2011, with City outlays of $9.5 billion. And in the current 2012 fiscal year, which concludes June 30, the City is on target to spend $9.1 billion.
After small declines in 2013 and 2014, spending is projected to fall $1.3 billion over the 2 year period from 2015-16. The $7.2 billion of projected spending in 2016 is a reduction of almost $2 billion from this year and $3.3 billion down from the 2010 peak.
City-funded capital commitments are at levels last seen in 2004. Commitments represent new registered contracts, an indicator of future construction and spending. While commitment forecasts change considerably from year to year, the Building Congress analyzed the five-year outlook from each of the Administration’s proposed budgets going back to 2002 and found several troubling indications. Several agencies are facing deep cuts including the City’s Departments of Transportation, Education and Environmental Protection.
· The City’s five-year Commitment Plan – at $37.6 billion – is at its lowest point since 2004.
· The City-funded portion of the five-year capital commitment plan is $29.5 million, also the lowest since 2004.
· Years four and five of the five-year Commitment Plan are the lowest of any Executive Budget of the Bloomberg Administration; more than $1 billion lower than any previous Budget.
· Adjusted for inflation, the City’s Commitment Plan is $7 billion less than it was in 2002; inflation-adjusted City-funded commitments for years four and five are only 52% of what was forecast in 2002.
A key factor limiting future City investment is growing debt service costs. As it assumes more debt than it is retiring, the City predicts debt will take up a greater share of overall expenditures. Annual debt service is forecast to grow from $5.7 billion this year to $7.5 billion in 2016, when debt service will make up about 13% of City expenditures, a high water mark for the Bloomberg Administration.
Building Congress President Richard T. Anderson observed, “During his tenure, Mayor Bloomberg has made an historic commitment to capital investment. These investments have helped ensure a higher quality of life and private investment in New York. The City’s civic leadership must be united in reminding the Mayor, and the candidates who seek to succeed him, that we must continue to invest to protect the gains made in schools, housing, parks and transportation.” The Building Congress is mounting a “Keep Building New York” infrastructure campaign to remind elected officials and the public of the importance of maintaining strong levels of investment in core infrastructure. The organization is urging government leaders to look closely at future capital needs and make sure there is adequate support to pay for them.
Anderson said, “Building the City’s vital infrastructure requires planning and investment well before the first shovel is put in the ground. For the City to be able to reverse the trends this budget shows for the later years, additional funding must be available and agencies must be permitted to begin planning and design for the next wave of infrastructure projects.”