The Mayor proposes spending $35 billion between 2014-2017 on capital programs, an increase of $2.6 billion from last year’s Plan, reversing a downward trend that began during the financial crisis. The Mayor’s $51 billion Ten Year, 2014-2023 Capital Strategy also increases spending from the last Ten Year Strategy, though it remains well below pre-recession highs.
“The Mayor’s final budget demonstrates that this Administration remains committed to maintaining the City’s core infrastructure for the future. Mayor Bloomberg leaves the infrastructure of this City in a better state than when he arrived and sets an important example for the next Mayor to follow.” Richard Anderson, Building Congress president, said in a statement.
“The budget also begins to reveal the devastating impact Superstorm Sandy had on our infrastructure. The City is going to spend billions of dollars in the coming years to return parks, hospitals and other public facilities to service. The Storm is an important reminder that we must rebuild thoughtfully, and ensure that critical roads, bridges, parks, hospitals and schools are able to withstand the next weather emergency.”
Since the Building Congress’s June report on the capital plan, the City boosted 2013 spending by $800 million to almost $9.6 billion. In 2014 the increase is even more significant, jumping to $10.1 billion from the $8.5 billion predicted last year.
Much of the increase comes from growth in the flow of outside dollars, likely attributable to emergency Federal aid for the City’s Superstorm Sandy recovery efforts. Of the $800 million in increased spending for FY 2013, $530 million is projected to come from sources outside City government; almost $800 million of the projected FY 2014 increase also comes from non-City sources.
Among the beneficiaries of this growth are:
– The Department of Transportation. In 2013, capital spending is estimated to rise to $2.1 billion from $1.5 billion. 2014 spending more than doubles from last year’s plan, from $770 million to $1.8 billion.
– The Department of Education. 2013 capital spending grows to $2.6 billion from $2 billion.
– Housing and Economic Development. Spending grows to $2.5 billion in 2013 from $1.5 projected last June.
– Health and Hospitals. Capital spending in 2013 is now estimated to be $1.2 billion compared to a forecast of only $265 million last June.
– Parks. In 2013, Parks Department capital spending is expected to grow to $1.38 billion from $339 million forecast last June. In 2014 Parks will spend $365 million, when last year’s Plan forecast a mere $74 million in capital spending. Much of this is likely to be spent repairing the City’s beaches and boardwalks damaged by Superstorm Sandy.
The City, which finances its capital program largely with debt, will see total debt grow from $68 billion this year to $75 billion in 2017. By 2017, debt service will also take 14.9 % of the City’s tax revenue, up from 13.6% this year. To control the debt-to-tax revenue ratio, future capital spending will dip by almost $1 billion a year, to $9.2 billion in 2015, and then to $8.2 billion in 2016.
Ten Year Strategy
At $51 billion, the Preliminary Ten-Year Strategy aims to manage a growing population which is expected to reach more than 9 million by 2030, and preserve core services. Funding for the Strategy remains well off the peak years of the mid-2000s, when it reached as high as $84 billion, but has grown modestly since the last Preliminary Strategy in 2011 proposed a $47 billion spending plan.
A full 39% of the 2014-2023 Strategy – or $20 billion – goes to education, including $8 billion for new public schools. 26% – or $13 billion – of the Strategy is dedicated to what it categorizes as “expansion” projects – including schools, work on the Third Water Tunnel, new housing, and waterfront development.
The City dedicates only $500 million to mass transit in its Ten Year Strategy, but $7.4 billion to bridges and highways. The City is also planning to expand its green infrastructure plan over the coming decade, investing $200 million on blue belt projects to divert storm water from sewers to natural filtration systems. However, the Strategy does not directly address the City’s response to Superstorm Sandy. The Strategy was also released prior to the federal budget sequester, which may shrink the budget presented last month.
The Building Congress encourages its members to ask mayoral candidates for their position on the capital budget. At fundraisers, mayoral forums and other public engagements, ask candidates if they will continue annual capital spending at $10 billion, a level equal in constant dollars to spending of the last five years.