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The Thruway way: spend, spend, spend Politicians dump unrelated expenses on system while authority jacks up costs

You've seen the sign: "Your Thruway Tolls at Work."

Then you drive past a crew resurfacing a stretch of road or painting the underside of an overpass.

But there are a lot of other ways your toll dollars are spent.

Like the $14 million used last year to maintain toll-free highways north of New York City.

And the $16 million paid to provide health insurance to retired Thruway Authority employees, to go along with their free lifetime E-ZPasses.

And the $75 million earmarked this year to operate and upgrade the state's canal system, which holds as much red ink as water.

Because of this kind of spending, your tolls keep going up.

They went up in 2005, will do so again in January for those who pay tolls with cash. And, if the Thruway Authority has its way, they'll go up again in 2009 and 2010.

Many motorists and truckers are upset with the Thruway Authority, and a Buffalo News analysis finds they have good reason.

The authority insists on sticking with a record $2.7 billion capital spending program despite a recent assessment from its consultants that the system is in good shape. And it plans to increase operating costs about 2.5 times faster than the growth in toll revenues generated by the 2005 and 2008 increases. The growth in operating costs is largely the byproduct of the generous labor contracts they have bargained over the years.

How generous?

There's a toll collector in Albany who made almost $72,000 last year.

The News found another set of culprits beyond the Thruway Authority.

Governors and state legislators over the past two decades have saddled the authority with expenses not related to the operation of the Thruway and siphoned off revenue that could have at least partly eased the financial pressures that prompted recent toll increases.

"We see a pattern with both the state Power Authority and the Thruway Authority. They become cash cows, and when they're flush with cash, the state uses them to finance the traditional responsibilities of state government, which is fundamentally wrong," said Rep. Brian Higgins, a former Democratic assemblyman who now represents Buffalo in Congress.

The Thruway was built in the 1950s with the promise that tolls would be eliminated in 1996, when the last of the bonds used to finance construction were paid off. State leaders in the early 1980s restated that commitment when the federal government agreed to provide aid based on Thruway mileage, reversing a ban on assistance.

But in the early 1990s, state government, under Gov. Mario M. Cuomo, reneged on its commitment and opted to keep the tolls. The state then began borrowing billions of dollars for Thruway work, assuring the tolls will remain in place for another 30 years, at least.

It adds up. Motorists and truckers already fork over more than half a billion dollars in tolls along the Thruway's 641 miles. With the longest toll-road system in the nation -- and few alternatives, particularly upstate -- motorists and truckers probably pay more tolls here than anywhere in the nation.

Toll revenues more than cover the cost of operating the Thruway. Last year, for example, the authority collected $554 million in tolls and spent $331 million operating the system.

The surplus was eaten up by the increasing cost of upgrading and rehabilitating the system, now a half-century old, and all the unrelated expenses that state politicians have tacked on.

>Series of increases

Unlike the other 12 states that have at least 100 miles of toll roads, the New York State Thruway also doubles as the primary interstate highway network for most of the state. Motorists and truckers don't have a lot of options but to drive the Thruway, and pay tolls at its bridges, barriers and interchanges.

Western New York is home to four of the 11 highest-yield collection points in the state.

The Tappan Zee Bridge, which crosses the Hudson River just north of New York City, is the system's biggest moneymaker. The Williamsville toll barrier, the western terminus of the Thruway's mainline, ranks second. Other major collection points in Western New York include the Lackawanna barrier, the Grand Island bridges and the barrier in Ripley near the Pennsylvania state line.

Barriers along the Niagara section of the Thruway near the Peace Bridge and Ogden Street also ranked among the system's largest moneymakers until they closed a year ago in the face of a lawsuit challenging the tolls collected there.

The authority has raised tolls six times since 1959. The norm has been long stretches between increases, and big ones when enacted. They've come closer together of late.

Still, authority officials maintain toll rates are reasonable.

"We remain, and will remain, among the least-expensive toll roads out there," said Michael Fleischer, the authority's executive director.

The News found Thruway rates in the middle of the pack in comparison with toll roads in Ohio, Illinois, Massachusetts, Pennsylvania and New Jersey.

New York tolls average 3.9 cents per mile for a car and 19.7 cents for a tractor-trailer. That's a bargain compared with Pennsylvania, but pricey compared with Massachusetts, whose turnpike authority has undergone reform in recent years.

Toll rates went up by one-third in 1988, and Fleischer noted that they remained unchanged until 2005. As a result, he said, tolls since the late '80s have increased less than the rate of inflation. There's been an upward spiral in recent years, which Fleischer attributed to several factors, including the need to make major capital improvements to the 50-year-old system.

>Politicians add costs

State leaders recommitted to eliminating tolls in 1982, when they accepted federal aid for the Thruway. The authority followed up by raising tolls in 1988 to finance rehabilitation work to ensure the Thruway was in good shape when turned over to the state DOT in 1996.

A commission appointed by Cuomo recommended in 1991 that the tolls remain, however. It was tolls or taxes, they argued. Cuomo and the State Legislature went for the tolls.

That wasn't the end of it. Cuomo and the Legislature also saddled the authority with expenses that continue to this day.

Following voter approval of a constitutional amendment, state officials in 1992 transferred responsibility for the state's canal system from the Department of Transportation to the Thruway Authority. The 524-mile canal system, which has the Erie Canal as its backbone, is a big operation, with 544 employees. It's also a big money-loser.

The state took a $54 million loss on the canal system operations and capital upgrades last year, and losses are projected at $75 million this year and $82 million next year. That spending, coincidentally, is about the size of the budget gap the authority is trying to close through toll increases in 2009 and 2010.

The legislation that put the Thruway Authority into the canal business also obligated it to help fund other projects not directly tied to the canal, often in the name of economic development. Almost $26 million was spent to help develop the Syracuse inner harbor and a bus station there. Buffalo's ongoing inner harbor project has gotten a piece of the $15 million earmarked for projects in Erie and Niagara counties.

Lobbyists for both motorists and truckers say the state should resume responsibility for the canal system.

"What drives us nuts is all these toll increases could be avoided if they simply put the canal system back in the state budget, where it belongs," said William Joyce, president of the New York State Motor Truck Association.

John Corlett, director of government affairs of the American Automobile Association of New York, added: "A lot of drivers are questioning the subsidy of canal operations, a project they see as having no connection to modern mobility needs."

Fleischer said the authority would not object to a transfer of the canal to the state.

"It would have a major impact on our finances," he said.

>Other road obligations

The canal system is not the only expense state lawmakers have foisted on the authority.

A year before the canal was transferred to the authority, the state "sold" the Cross Westchester Expressway, also known as I-287, to the authority for $20 million. The authority took on the cost of operating and maintaining the 11-mile stretch of highway just north of New York City, but was prohibited from collecting tolls to cover its overhead. The highway costs about $2 million a year to maintain.

Also in 1991, the state transferred responsibility for operating and maintaining I-84, a 71-mile stretch of highway about 40 miles north of New York City, to the authority while again prohibiting tolls. The highway cost the authority about $11.5 million to maintain last year. The tab since the early '90s is in the neighborhood of $175 million in present-day dollars.

"They transferred the burdens with no benefits," said Buffalo developer Carl Paladino, whose lawsuit against the authority was a catalyst for removal of the Breckenridge and Ogden toll barriers a year ago.

The state this month will start covering I-84's expenses, part of a deal tied to the elimination of the toll barriers in Buffalo last year. The loss of toll revenue will be made up by the shedding of I-84 expenses.

While the politicians dumped state operating expenses on the authority, they have kept vast sums in federal transportation aid received because of the Thruway's existence.

New York received $1.4 billion in such assistance last year, which must be used for capital projects, as opposed to operations. About $50 million of that assistance is generated by Thruway facilities.

Use of federal money to help pay for a portion of the authority's ongoing $2.7 billion capital improvement plan could reduce the need for a toll increase. As it now stands, the program has pushed the authority's debt to a record $2.4 billion, which will grow and require that tolls remain in place until at least 2037.

Fleischer said he "understood" the state's decision to stop passing along a portion of federal aid in 2004, leaving the impression the authority didn't strenuously object. But he added that the "state highway system needs a lot more revenue to address the state highway needs."

Consultants noted the "overall good condition of the entire Thruway plant," in a report this September, but Fleischer insisted that all of the $2.7 million of work is necessary and will only get more costly if delayed.

>Authority spending

While the authority has made some economies over the past decade, largely by reducing staff, The News analysis did not reveal a lean operation.

In fact, without further toll increases, the authority's current long-range spending plan envisions operating costs going up more than twice anticipated revenues from 2006 through 2011. Coupled with the huge increase in capital spending, the authority's budget is projected to grow from $762 million in 2006 to $1.1 billion in 2008 -- a jump of 44 percent.

Much of that is tied to payroll. A News analysis of the 2006 authority payroll found full-time employees earned an average of $55,336.

Some 103 employees, or 4 percent, made over $100,000. Another 10 percent earned over $75,000, most of them managers and engineers.

Toll collectors account for one in every four full-time jobs, and virtually all part-time positions. Full-time toll collectors earned an average of $45,335 a year, with the best paid toll taker hauling in $71,995. Part-timers make $11 to $13 an hour.

Authority employees get the same pension and health insurance benefits as most state workers. That means a pension worth up to 75 percent of pay.

The authority also picks up 100 percent of the cost of a baseline health insurance plan for veteran employees, although recent hires pay as much as a quarter of their premium costs.

It's not just employees who get health insurance; the authority also picks up most of the cost of the bill for retirees. The cost this year for 1,880 retirees is $16.4 million, and it has grown steadily in recent years.

Employees are entitled to a minimum of three weeks of paid holidays and personal days.

Other spending has symbolic as well as financial consequences.

For starters, authority employees get to travel the Thruway free once they have been on the job for four or five years, depending on when they were hired.

Union-represented workers get $5.50 in meal money whenever they work overtime. The cost last year: $195,641.

And the authority covers 90 percent of college tuition costs. Last year, 85 employees were reimbursed $169,570.

While officials are quick to note the authority has cut 453 full-time positions since 1995, most of those jobs were eliminated in the mid-1990s. The authority has continued a more-measured downsizing in recent years, using attrition rather than layoffs. Employment has dropped 4 percent, or 127 jobs, in the past five years. It plans on cutting 10 jobs each of the next three years.

That would still leave the authority with nearly 3,400 jobs.

Paladino said there's plenty of room for belt-tightening before the authority attempts to impose further toll increases, which he said would be an "insult" to motorists.

"Right now, it's not about the Thruway," he said. "It's all about three men in a room who have done all this conniving and concocting to perpetuate this indirect and unfair tax."


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