Transfers control of the New York state canal system to the department of transportation

Summary of provisions

Sections 1 through 101 provide for the transfer of responsibility for canal system operations and development to the Department of Transporta- tion from the Thruway Authority. Section 102 provides that if the Thruway Authority raises tolls faster than the change in the consumer price index, the entire amount of the toll increase must be used to pay installments on debt obligations or deposited in a fund used to buy back and retire debt issued at least two years prior. Section 103 provides for the transfer of employees from the Canal Corpo- ration and the Thruway Authority to the Department of Transportation. Section 104 is the severability clause. Section 105 provides that this act shall take effect immediately, with provisions.

Existing law

The Thruway Authority is responsible for canal system operations and development.

Justification

Recently the Thruway Authority has announced its intention to increase tolls on trucks with three or more axles by 45% in order to raise $90 million per year that it will need to cover canal expense and debt obli- gations going forward. While this decision has been much criticized and many have called on the Authority to look toward alternate routes of balancing its books, little in the way of legislative solutions have been advanced.

This bill is one such legislative solution to this problem, or at least a significant portion of the problem. In 1992, responsibility of the canal system was transferred to the Thruway Authority for the Department of Transportation. The stated intent of the 1992 bill was to achieve the objective of a more self-sufficient canal system. Unfortunately, that has not turned out to be the case. Instead of relying on direct govern-

ment funding the canal has become reliant on toll revenue to fund its operation and maintenance and has never approached self-sufficiency. According to the State Comptroller, the Canal System will become an ever larger drain on Thruway Authority resources in the coming years. In the decade from 2002-2011, the Canal System accounted for 8.3% of total Thruway Authority expenses. This is projected to grow to 9.9% of expenses during 2012-16. At the same time, the canal is bringing signif- icantly less revenue than required to meet its operating expenses, much less needed capital expenses It is clear that the objective of a self- sufficient canal system has failed to be realized.

Instead of continuing to saddle the Thruway Authority with responsibil- ity for an unprofitable canal system, it is time for New York State to once again bring responsibility for the Canal System back under the purview of the Department of Transportation. Doing so will free the Thruway Authority from a significant burden, and, when combined with much needed internal reforms, will allow the Thruway Authority to continue to balance its books without a toll increase.

Legislative history

New bill.

Fiscal implications

To be determined.

Local fiscal implications

None.

Effective date

Effective immediately.