Bad banks could mean good news for drivers
WHITE PLAINS, N.Y. — In an unlikely twist, Tappan Zee Bridge drivers may owe a big thank you to banks accused of wrongdoing in the nation's fiscal crisis for saving them from what could have been a hefty toll hike on the span in the coming years.
Earlier this year, the state Thruway Authority modified its own budget and announced that that it would divert some $750 million in bank settlement money to the $4 billion bridge replacement project. Tucked deep in the new budget is a sizable recalculation in just how much toll revenue the Thruway will need by 2018, when both four-lane spans are expected to open to traffic, a Journal News analysis shows.
Thruway officials estimated that, instead of the $990 million they said they would need in December, they'd need just $689 million by 2018, thanks in large part to cost cutting and an infusion of cash from New York's share of the bank settlement negotiated by the U.S. Justice Department, state figures show.
The $1.9 billion budget, approved in May, identified some $66 million in spending cuts and reduced debt service costs.
The bank settlement money meant the Thruway did not have to issue bonds this year, state officials say. The $300 million reduction in needed revenues by 2018, coupled with plunging gas prices, could translate to a lower-than-expected toll at least for the next few years and provide some political cover for Gov. Andrew Cuomo, whose commitment to proving New York can still build big things propelled the project, according to economists and political observers.
Three years ago, transportation economist Charles Komanoff, who has made a study of the bridge financing plan, predicted that the toll for a new bridge would come in around $11 or more. He now thinks it will be considerably less but is reluctant to pin down a precise figure until more details of the financing plan come out.
"He's a lucky guy," Komanoff said of Cuomo. "The financial-settlement money plowed into the Thruway Authority will enable him to reduce the amount of debt from building the bridge. And the plunge in gas prices is going to bump up the volume of cars on the Tappan Zee. Both changes shrink the toll hike."
Some 138,000 cars cross the Tappan Zee every day, contributing nearly 20% of the Thruway's annual toll revenue. As of the end of August, traffic totals on the bridge were up 1% over the same period last year, from 16,736,326 to 16,929,776, Thruway figures show.
Just how high will the toll go and when will it go up? And will it increase incrementally in the coming years?
"TBD," a Thruway Authority spokeswoman wrote in response to a Journal News query about when the state anticipates revealing what the new toll will be.
Efforts by a new Thruway management team to "take the blade to the fat" is a signal that officials are committed to cutting costs and keeping tolls low, said Ken Girardin, a policy analyst for the Empire Center for Public Policy. But, Girardin said, he's still not convinced they can pull it off because their future budget projections factor in deficits.
"They're going to try their darndest but, at this point, they're projecting deficits within two years," he said.
State officials have acknowledged that a toll hike will be needed to repay bonds the Thruway Authority issued to aid in its financing. All they will say is that tolls won't be raised this year on the bridge or across the Thruway, and there are no plans to increase tolls across the Thruway to pay for the bridge.
Much is on the line for the region's economy, as well as the political fortunes of a governor who pushed a bridge project that bogged down in cost concerns during prior administrations.
"The Tappan Zee Bridge is the lifeblood of our community," said state Sen. David Carlucci, D-New City. "We were born out of the TZB."A higher toll could affect the economies of Westchester and Rockland counties and the residents whose daily lives are intertwined with a bridge that, when it opened in 1955, transformed a region, turning Rockland from a farming community to a bustling New York City suburb whose population has more than tripled since 1950 to approximately 330,000.
At $5 per round trip, less with an E-ZPass discount, the toll for the Tappan Zee Bridge is still a relative bargain compared to the $14 hit drivers take to cross the Hudson 20 miles to the south at the George Washington Bridge.
But a toll that's too high might force some to think twice about that drive from Pearl River to catch a movie in Tarrytown, or that trip from White Plains to catch a Rockland Boulders game.
In August 2012, the governor vowed to create a task force that would offer suggestions to keep the toll low and investigate other financing sources for the bridge. That hasn't happened yet.
The task force's work has been put on hold while the state tries to come up with financing alternatives.
It's been a predictable, don't-show-your-cards strategy from a second-generation governor who knows his way around the political poker table, observers say. And tolls, like taxes, have a way of turning the public against you very quickly, they add.
"A toll is in your face every day," said Philip Plotch, the author of Politics Across the Hudson, a critical look at the Cuomo administration's effort to build a replacement for the aging bridge. "Every single day drivers are going to see it."