NY state robs its fund for highways, bridges: report

NEW YORK (Reuters) - New York state has spent one-third of the money in its highway and bridge trust fund on transportation and "siphoned off" the rest for other purposes, including repaying debt that voters never approved, the state comptroller said on Thursday.

In a report entitled "Highway Robbery," Comptroller Thomas DiNapoli said the trend will worsen.

The state will be obliged to put $4 billion back into the trust fund over the next five years unless Democratic Governor David Paterson and the legislature address the issue, he said.

New York's Department of Transportation in mid-October said it was forced to shut a "critical" link with Vermont, the Lake Champlain Bridge, to fix structural problems. DiNapoli said that underscored the importance of using the trust fund for the purpose for which it was intended.

"I think outrage and anger is certainly appropriate; we need to channel that into thoughtful public policy," the Democratic comptroller told reporters.

New York is far from the only state that has fallen behind in repairing and improving transportation, even after the alarm was raised by a fatal bridge collapse in Minnesota in 2007. A government-backed commission last year estimated that the country needed to invest $210 billion a year in infrastructure.

The trust fund, created under former Democratic Governor Mario Cuomo in 1991, has backstopped $10.5 billion of debt issued by the Thruway Authority and the Department of Transportation, DiNapoli told reporters.

Authorities do not need voter approval for revenue bond issues, referred to by critics as "backdoor borrowing," a term DiNapoli used. The trust fund is also used to help fund the Department of Motor Vehicles and the transportation department, he said.

New York's transportation department has proposed a nearly $26 billion capital plan for the next five years, but the state's rising deficits could require it to settle for less.

DiNapoli, a former assemblyman who said he had approved spending the trust fund's dollars for other purposes as part of the state budget accords, said no one person was to blame.

"That's a collective responsibility; it should be our collective responsibility to get it back in the right direction," he said.

The use of the fund for other programs rose sharply under former Republican Governor George Pataki during previous economic downturns, according to DiNapoli's report. The comptroller said New York had a history of using "creative financing" during fiscal crises instead of making difficult choices about what it could afford.

(Reporting by Joan Gralla; Editing by James Dalgleish)