Pataki Pushes Transportation Bond Act

Gov. Pataki is pushing a $2.9 billion transportation bond act. The last time that a bond act was put before the public, voters turned it down in an overwhelming fashion.

Transportation infrastructure is woefully underfunded around the country, and it is crucial for infrastructure to be adequate in order to deal with natural disasters as well as everyday use. New Jersey's transportation trust fund will run out of sufficient funding to deal with anything other than debt payments unless New Jersey does something.

Planned projects include the conversion of state Route 17 into Interstate 86 across the Southern Tier, construction of the U.S. Route 219 freeway in Erie and Cattaraugus counties, construction of a four-lane connector roadway that will link Interstate 81 to Fort Drum and improvements to Interstate 287 in Westchester County.

Voters will decide whether to approve the borrowing in November.

"Making investments in our transportation infrastructure today is a critical part of our effort to ensure New York's competitive edge for the future," Pataki said in a statement.

An advisory panel to the state Department of Transportation last November issued a report warning of the consequences if more isn't done to shore up the state's highways, railroads, airports and mass-transit systems.

You can be sure that the same kind of warnings have been presented to legislatures around the country.

However, there is a significant problem with issuing debt to cover this kind of infrastructure repair. Paying as you go should be the order of the day, and all states pad their budgets with pork instead of dealing with necessary items. The bond issues turn out to saddle future taxpayers with debt, which is often refinanced to stretch out the payments even further. So, while costs for a given project might be $100 million in present dollars, the bonding of that project may end up costing taxpayers two or three times that amount because the bond act gets refinanced or other legislative tricks are used to balance the budget for an individual year.

Maintaining a dedicated cashflow for transportation programs is the best way to insure that transportation is funded, though the taxes or fees must be indexed for inflation.