New York is getting a new Tappan Zee Bridge, finally — and Gov. Cuomo is rightly getting the credit. But, in five years or so, the Thruway Authority could get the blame.
Cuomo has made building the bridge the centerpiece of the second half of this term — and that’s a good thing. The existing rickety structure is past its lifespan and way over planned traffic capacity.
The project is long overdue — but state leaders for a decade failed to take it on. To get it done, as Cuomo told Post State Editor Fredric U. Dicker on the radio Friday, “You have to generate positive energy to overcome . . . the negative energy.”
That’s what Cuomo’s doing, hiring a popular suburban news anchor to be his public face and holding public meetings in Rockland and Westchester — the counties the bridge connects — to assuage noise and dirt fears.
But what can “positive energy” do about the cost — at least $4.6 billion, maybe $5.6 billion?
Yes, it’s better than keeping the old bridge ($1.3 billion for added maintenance and repair over the next decade) or a full rehab ($3.4 billion, and the bridge still wouldn’t meet modern standards).
Last month, the Thruway proposed much higher tolls to pay for the new bridge. The round-trip EZPass fare for a car could go from $4.75 now to $12.50 by 2017 (with the cash toll at $14). The highest-volume discount rate, used by locals, would rise from $3 to $8.40.
On Friday, Cuomo offered some “positive energy” to save voters from this crushing burden: He wrote Thruway chiefs Howard Milstein and Thomas Madison saying that while parts of their plan “pleased him,” he had ideas “to do even better.” His biggest idea? The toll hike is “too high.”
Cuomo directed the Thruway to spend the next five years, as it builds the bridge, finding “alternatives, revenue generators and cost reductions.”
As he told Dicker, “I want to put together a task force.” A task force — what could be more energetic?
But energy can’t do much about math.
Say Cuomo can keep costs under $5 billion. After all, construction firms are desperate for work. And bids are already in; the governor would hardly be talking about cutting costs below estimates if the bids were way over.
(On the other hand, Cuomo also said Friday that he wants “historians” and “regular citizens” to weigh in on a design. That’s odd at this late date — design changes push costs up.)
Let’s also assume Cuomo gets $1 billion from the feds in grants, not loans. He’d still have to borrow $4 billion. If the Thruway can raise that at 4.19 percent (the going rate) it would cost $227.2 million annually over 30 years.
Problem: The Tappan Zee only makes about $122 million a year in toll revenue. And that money is already spoken for — the Thruway has debt and regular costs.
Double overall toll revenue, and you have $122 million a year for the new-bridge debt — half what you need.
Hence the move to triple the toll, which would provide the right amount of money.
Can Cuomo triple toll revenues without tripling the tolls for high-volume commuters and EZPass customers? (They’re ones who should pay more, anyway, since the bridge benefits them most.)
Well, he could hit cash travelers hard — but cash tolls may not even exist in five years.
Truckers? With EZPass, they already pay $16 to $49, and that only provides about 19 percent of the Tap’s revenues. How much more can we bleed them? (Cuomo’s already showing signs of backing off of a plan to charge truck drivers more on the rest of the Thruway.)
He could gouge EZPass drivers who don’t use the heaviest-volume discount hard. But if the Tappan Zee toll shoots too high, they’ll just head south to the George Washington Bridge, or stay off the roads altogether.
Maybe the feds will come through with more cash. But it’s just as likely that the bridge will cost more than expected. There are uncontrollable factors, too — like inflation.
There is one thing Cuomo clearly can do: Structure the debt so that the bill doesn’t come due for a while. This may be what he meant when he urged the Thruway chiefs to seek “financial mechanisms that lower the cost of credit and borrowing.”
Bond markets permitting, Cuomo could borrow with back-loaded repayment terms — paying less in the early years, but even more later on. Then the toll hikes would be someone else’s problem — and Cuomo’s successor could blame Thruway “waste, fraud,and abuse” while promising to do better.
Politically, that could work: Look at how Cuomo and New Jersey Gov. Christie blamed the Port Authority last year for raising tolls to pay for work it had to do — rebuilding the World Trade Center.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s
City Journal.