Two men — Assembly Speaker Sheldon Silver and State Senator John DeFrancisco — stand between Governor Andrew Cuomo and his plan to use the state’s clean water fund to finance construction of the Tappan Zee Bridge.
The $511 million low-interest loan for the Tappan Zee (stated goal: “keep tolls on the new bridge as low as possible”) uses money from the Clean Water State Revolving Fund reserved for New York City. Although the fund is meant to finance things like wastewater treatment plants, not highway construction, the loan was approved late last month by the Cuomo-controlled Environmental Facilities Corporation.
It still needs final sign-off from the Public Authorities Control Board, where three members each wield veto power over new debt issued by state authorities. The loan is on the agenda for the board’s meeting on Wednesday, and either Silver or DeFrancisco could stop, or at least delay, its approval. (The other member, state budget director Robert Menga, is a Cuomo appointee and supports the loan, according to Bloomberg.)
A coalition of environmental, transportation, and good-government groups — including the Regional Plan Association, which has generally supported the TZB project — are calling on control board members to use their veto power. “This loan could set a dangerous precedent and lead other states into using these funds for projects with little or no connection to the protection of water quality and water resources,” the advocates wrote in a letter to the board [PDF]. “At a minimum, we request that the Board delay a vote on the loan.”
“We don’t think this is a good idea,” RPA spokeswoman Wendy Pollack said. “Or a good precedent.”
The New York League of Conservation Voters is asking supporters to contact board members and urge them to vote against the loan.
Silver remains noncommittal, even though the Tappan Zee loan would use funds intended for New York City clean water projects. “We are reviewing the matter,” spokesperson Mike Whyland said in an email.
DeFrancisco, a Syracuse-area Republican, is giving a similar line. “He’s still examining the issue. He hasn’t made a decision yet,” said spokesperson Tiffany Latino.
Last week, DeFrancisco said that he wouldn’t hesitate to stop the loan without more answers from the Cuomo administration. “I have no compunction at all about voting ‘no’ if it’s not the proper use of money or there’s not a full financing plan, because the people should know how they’re paying for this thing,” he told Capital Tonight. “If I got a vote, I’m gonna use it.”
Cuomo is going after the clean water fund because the Thruway Authority, which is building the Tappan Zee, has seen its bond rating tumble as investors worry about how the state will pay for the $3.9 billion bridge. EFC’s high bond rating means it can offer better rates than the Thruway could get itself. In fact, half of the clean water loan will be interest-free. Moody’s said this week that while the loan is large, it isn’t expected to affect EFC’s top-notch credit rating, which has been built over years of funding local projects that have repaid loans on time.
But investors still worry about the larger picture for the Tappan Zee. “The thing we keep coming back to is we don’t know where the tolls are going to get to,” municipal bond fund manager Daniel Solender told Bloomberg. “Some things have to be made more clear.”
Republican gubernatorial candidate Rob Astorino, who supported the Tappan Zee project nearly two years ago in exchange for a still-missing toll study group from Cuomo, pounced on the bridge’s financing as a campaign issue on Tuesday. “It’s only going to mean that there is $500 million less for local communities… to change these wastewater treatment plants,” he said.
The Environmental Protection Agency provides 80 percent of the money in the state clean water fund. Regional administrator Judith Enck asked the state for more information on its “unconventional approach” and to explain how the highway project achieves the fund’s estuary protection goals. The state replied to the request nine days ago [PDF], but EPA’s regional office said it is still “currently reviewing” the letter.
The Tappan Zee, incidentally, is a priority for the Obama administration, which awarded the project a $1.6 billion Transportation Infrastructure Finance and Innovation Act loan, the largest ever. The financing plan required to secure that loan was never released to the public.