With Tolls Projected to Nearly Triple, New TZB Risks Financial Death Spiral

Well, this explains why the Cuomo administration has been so reluctant to discuss how to pay for the new Tappan Zee Bridge. At a public meeting last night, Secretary to the Governor Larry Schwartz told the crowd that cash tolls would rise to $14 on the replacement bridge, with a slight discount for E-ZPass holders ($13.40) and a deeper discount for regular commuters ($8.40), the Journal News reports.

Governor Andrew Cuomo could be looking at a financial "death spiral" for the new Tappan Zee Bridge. Photo: ##http://www.newsday.com/opinion/keep-up-tappan-zee-pressure-1.3243937##Angel Franco/Newsday##

Those tolls would nearly triple current rates — $5 cash toll, $4.75 E-ZPass, and $3 for commuters — confirming the analysis by Charles Komanoff published on Streetsblog back in January.

Of course, the new, double-span bridge, which would be twice as wide as the current one, may not even provide rush-hour bus lanes for commuters who want a more affordable option.

At least Schwartz has now come clean about what it would take to pay for the bridge, but it is remarkable that the Cuomo administration is only now putting this figure before the public, after final bids have been submitted to construct the $5 billion project. The ballpark cost of $5 billion has been the standard reference point since the Cuomo administration ditched the transit components of the bridge last fall.

Komanoff was out in front on this one, and his warning from January is especially resonant in light of this new information. If tolls rise, trips across the bridge will fall, possibly to the point where revenue would not be sufficient to cover the carrying costs of the bridge. Komanoff referred to this scenario as a “death spiral” in which the new bridge simply can’t pay for itself.

According to the state’s Final Environmental Impact Statement (chapter 4, page 16 [PDF]), Tappan Zee tolls equivalent to those on the George Washington Bridge (slated to rise to $14 late in 2014), would result in an 8.3 percent decline in trips across the new bridge in 2017 compared to the present volume. That figure is very close to the average 8 percent drop in traffic forecast by Komanoff’s model [XLS].

We don’t quite have enough information to say whether this would set off a death spiral, but it’s worth a second look at what it would mean if the traffic and toll equation doesn’t add up. Komanoff wrote in January:

Is there a way out of a Tappan Zee “death spiral” in which no toll can generate enough revenue to pay bondholders? I see two possibilities. Either the Thruway Authority offloads some of the project’s carrying costs to other parts of its system or onto the State DOT’s budget. Or the powers-that-be trim the cost by shrinking the bridge. (Or some combination of the two.)

Offloading merely shifts costs to drivers elsewhere, or to taxpayers in general. A particularly worrying downside is that to come up with the funds, Albany might be forced to starve roads and bridges in other parts of the state, or even transit in and around NYC — not in a “one-shot,” but year in and year out.

As for shrinking the bridge, trimming the cost to $3.5 billion — a number pulled out of a hat — could keep the required toll hike low enough that daily bridge crossings would be as likely to rise as fall. This would avert cascading toll hikes and allow the full cost to be covered with a toll between $5 and $12.

Of course, getting the cost down that far would probably require slimming the lane configuration to something close to the current one. Could traffic be accommodated? Yes, for the time being; and almost certainly over the long haul, by charging premium tolls during the relatively brief daily peaks.

The Cuomo administration filled in a major unknown about how the TZB would be paid for last night, but that is leading to even more questions about whether the region can afford the governor’s vision of a gold-plated bridge for cars with no equivalent provision for transit.

  • You keep posting that same picture of Cuomo. He’s looking forcefully at the bridge, grand vision in his eyes. A look of determination and hope for the progress of mankind. And with each TZB setback, the picture becomes more and more ridiculous.

  • I’m the furthest thing from a Robert Moses fan, but Cuomo is trying to look like Moses there. And failing pretty ridiculously.

  • Rob

    Really, you think so?  It looks like he hates that bridge.  He’s going to ruin it for everybody. 

  • Anonymous

    Great post. Glad to see Komanoff’s analysis confirmed. Would love to hear more from Streetsblog on “slimming” or scaled back alternatives. Any engineers in NY not involved in the TZ project willing to be interviewed?

    Also, it seems odd that nobody is talking about moving “people” instead of “cars” the way NYC-DOT is.

  • Larry Littlefield

    The toll may have to triple from current levels, but the current level is pretty low compared with the Port Authority/TBTA crossings.  I had believed they were similar.

    The Tappan Zee isn’t carrying mass transit costs like the downstate bridges and tunnels, but I had no idea the gap was that wide.

    The GWB is $7.50 off peak and $9.50 peak with EZ Pass, and $12.00 with cash.  The Tappan Zee toll should be increased to that amount immediately to help pay for the new bridge, and increased as other tolls increase.

    Federal money will cover some of the cost of the bridge.  And as for the rest of it, the whole state should pay, since debt was loaded onto the Thruway Authority in the early 1990s to solve a short term budget crisis (by the current Governor’s father), similar to the way debt was dumped on the MTA.

  • Teger Lynn

    The bottom line:

  • “Death Spiral” is really the perfect way to describe it. Unfortunately, Cuomo will raid as much as he can raid and pillage for this thing. He’s already decided to. Pensions, upstate roads, the MTA, etc. Nothing is safe. 

  • I wonder just how much it would cost to do this:

    1. Forget bridging across the Tappan Zee. Demolish the current bridge when it becomes unsound. 

    2. Build a far shorter bridge on the nearest narrowing of the Hudson south of the Zee.

    3. Build a far shorter bridge on the nearest narrowing of the Hudson north of the Zee.

    And how much New York State would gain from having a beautiful quiet wide lake there. 

  • JamesR

    IRMO, you’re neglecting the issue of jurisdiction. The TZB is where it is because it is just barely outside Port Authority of NY/NJ jurisdiction. The Bear Mountain bridge is 20 miles north and the GW is 20 miles south. The takings costs to build the bridge in another footprint would be staggering, so any new bridge will be in the existing footprint. 

  • Anonymous

    @Ben and @HamTech87:disqus — Thanks for the references to my January post in this space. I updated that analysis in March. Here’s link: .

  • Anonymous

    Oops, the link in my just-now comment looks mangled. Try this?
    http://komanoff.net/cars_II/Bridge_Too_Big.pdf

  • Reader

    $14 is a lowball estimate. I think you’re easily looking at $20 tolls if this idiotic plan moves forward. 

  • Rockland Ron

    20 years ago, Gov Mario Cuomo  signed  a law making Thruway tolls subsidize I-684, I-84, the Cross-Westchester Expressway and created the Canal Corp as a subsidiary of the Thruway which to date has drained  well over $1 Billion from the Thruway. Every year the Canal Corp swipes $75 million from Thruway drivers to maintain its unused system for the 100 or so canoes and pleasure boats that use the system. That cash can be used to pay for the new TZ bridge, lower borrowing and thus the tolls.

  • Miles Bader

    @d6297adf19be608d8f9739f29833cbec:disqus  I thought they used that pic ’cause besides having a bridge in it, (1) the “look of determination” is actually very creepy, and (2) it really emphasizes Cuomo’s enormous schnozz… :]

    It’s decidedly unflattering anyway, so it fits Cuomo’s actions well…

  • Ian Turner

    @aec617c1f53f5c6a49f6292cfbefbf5c:disqus: Trust me, this bridge is gonna need a lot more than $75 million a year.

  • This is what happens when you try to put off something for too long—planning for a replacement bridge should have been completed under Cuomo’s FATHER. If the tolls are going to have to be that high, it has to be wondered if perhaps the Thruway should be leased to a private entity who could get it done more cheaply. A new Tappan-Zee Bridge is needed.

    @aec617c1f53f5c6a49f6292cfbefbf5c:disqus – I-684 and I-84 (minus the part controlled by the NY State Bridge Authority) are no longer part of the Thruway system, but the Cross-Westchester Expresway is.

  • Bob

    Is this possibly the reason the administration does not want mass transit on the bridge? They need the car tolls to pay for the construction.

    gov. Cuomo should agree to congestion pricing in NYC and take some of the funds to pay for the Bridge’s construction with mass transit.

  • Anonymous

    This funding scheme is great/ finally a road entirely paid by its users! Haven’t we been in favor of this for a while? 
    Yes we know it will not work, but failure could lead  to success: the way I see it , the more expensive it is, the less people will use cars (congestion pricing principle) or will car share, there will be more space for transportation alternatives and the same people will ask for more and more transit options. Seems like a perfect plan. 

  • John

    Maybe this is why they can’t let people take transit over the bridge.  It would decrease the number of toll payers.