FY 2017 Capital Program and Financing Plan

Transcription

1 FY 2017 Capital Program and Financing Plan Andrew M. Cuomo, Governor Mary Beth Labate, Budget Director

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3 Table of Contents Introduction... 1 Reporting on State Debt... 2 For More Information... 2 Executive Summary... 5 Capital and Debt At-A-Glance... 5 FY 2017 Capital Plan... 6 Capital Projects Spending Overview Debt Outstanding Debt Issuances Debt Retirements Debt Service Debt Affordability Measures Debt Reform Act Limit Capital Program and Financing Plan FY 2017 Capital Projects Spending Capital Project Appropriations Annual Capital Spending Disbursements and Debt Impacts Financing FY 2017 Capital Projects Spending...23 FY 2017 Debt Issuances...24 FY 2017 Debt Retirements FY 2017 Debt Outstanding FY 2017 Debt Service Five-Year Capital Plan Multi-Year Capital Projects Spending Transportation Parks and Environment...36 Economic Development and Government Oversight Health...39 Social Welfare Education Higher Education...42 Public Protection Mental Hygiene...45 General Government Other Financing Sources of Capital Projects Spending Authority Bond Financing General Obligation Bond Financing State and Federal PAYGO Sources and Uses... 51

4 Table of Contents Agency Capital Program Plans Transportation Parks and Environment Economic Development and Government Oversight...63 Health Social Welfare Education Higher Education Public Protection Mental Hygiene General Government Other Debt Affordability State Debt as a Percent of Personal Income State Debt Outstanding State Debt Per Capita...93 Debt Service Detailed Data Interest Rate Exchange Agreements and Variable Rate Exposure Interest Rate Exchange Agreements (Swaps) Variable Rate Exposure Bond Authorizations State and Federal Pay-As-You-Go Financing General Obligation and Authority Bond Financing Capital Projects Funds Financial Plan State Debt Detail Debt Outstanding Debt Service Debt Issuances Debt Retirements Debt Service Funds Financial Plan Agency Summary and Detail Tables Transportation Transportation, Department of Motor Vehicles, Department of Thruway Authority, New York State Metropolitan Transportation Authority Parks and Environment Environmental Conservation, Department of Hudson River Park Trust Parks, Recreation and Historic Preservation, Office of Adirondack Park Agency

5 Table of Contents Economic Development and Government Oversight Agriculture and Markets, Department of Empire State Development Corporation Economic Development Capital Strategic Investment Program Economic Development Program, New York State Jacob Javits Convention Center High Technology and Development Program Regional Economic Development Program Energy Research and Development Authority, New York State Olympic Regional Development Authority Community Enhancement Facilities Assistance Power Authority Health Health, Department of Social Welfare Children and Family Services, Office of Housing and Community Renewal, Division of Temporary and Disability Assistance, Office of Nonprofit Infrastructure Capital Investment Program Education Education Department, State Higher Education State University of New York City University of New York Higher Education Facilities Capital Matching Grants Program Public Protection Corrections and Community Supervision, Department of State Police, Division of Military and Naval Affairs, Division of Homeland Security and Emergency Services Public Security & Emergency Response Mental Hygiene Mental Health, Office of People with Developmental Disabilities, Office for Alcoholism and Substance Abuse Services, Office of

6 Table of Contents General Government General Services, Office of State, Department of Information Technology Services, Office of Workers Compensation Board Other Judiciary Law, Department of World Trade Center State Equipment Finance Program State and Municipal Facilities Program Core Capital Projects Special Infrastructure Account Audit and Control Summary of Projected Appropriations, All Funds, All Programs by Fund Type and Major Fund, FY 2017 through Dedicated Highway and Bridge Trust Fund Detail Increasing Opportunity for Minority and Women-Owned Business Enterprises Glossary of Acronyms

7 Introduction

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9 Introduction The DOB 1 publishes the Capital Program and Financing Plan twice a year, with the Executive Budget and the Enacted Budget. It describes the State s multi-year capital program, the way it will be financed, and the impact of debt on the State s Financial Plan. The Executive Budget Capital Program and Financing Plan (the Executive Capital Plan or the Plan ) reflects capital spending and debt issuances in the FY 2017 Executive Capital Plan. The Executive Capital Plan consists of seven major sections as follows: The Executive Summary summarizes the State s capital initiatives, multi-year planning projections, debt issuance plans, limitations on State debt, overall capital spending, and projected levels of debt service costs, debt outstanding, new debt issuances, and debt retirements. FY 2017 Capital Program and Financing Plan provides estimates of annual capital spending and debt by program area and financing source. Multi-Year Capital Plan provides a summary of the multi-year impact of the FY 2017 Capital Program and Financing Plan and describes agency capital goals, objectives, and capital maintenance efforts. Agency Capital Program Plans provide a narrative description of the capital investment recommendations of agencies for the FY 2017 through period. Debt Affordability includes information related to the State s actual and projected debt levels and debt service costs, as well as comparisons to objective affordability measures. Detailed Data explains various State debt limitations and provides detailed tables on capital projects financing, State-related debt, and debt service costs. Agency Summary and Detail Tables provide a summary of projected appropriations, commitments, and disbursements for each agency on both a comprehensive construction program and capital projects fund basis. Terminology used throughout the Executive Capital Plan includes commitment(s), meaning the amount an agency expects to place under contract for a given fiscal year; and appropriation(s), referring to the statutory authorization against which expenditures (liability) and disbursements (cash) may be made during a specific State fiscal year. In general, this legal authority allows State agencies to spend money. Agency appropriations, commitments, and disbursements data can be found in the Agency Summary and Detail Tables section. 1 Please see Glossary of Acronyms at the end of this document for the definitions of commonly used acronyms and abbreviations that appear in the text. FY 2017 Capital Program and Financing Plan 1

10 Introduction Reporting On State Debt The Plan provides information on State-supported debt and the broader measure of State-related debt: State-supported debt represents obligations of the State that are paid from traditional State resources (i.e., tax revenue) and have a budgetary impact. It includes both General Obligation debt approved directly by the voters, and debt authorized by the Legislature, acting on behalf of the people, and issued on behalf of the State by public authorities, where the State is contractually obligated to pay debt service, subject to appropriation. All debt authorized by the Legislature must be approved by the Public Authorities Control Board, and the board of the issuing authority, with the exception of General Obligation Bonds. The State s debt reform caps on debt outstanding and debt service apply to State-supported debt. State-related debt is a broader measure that includes State-supported debt, State-guaranteed debt, moral obligation financings, and certain contingent-contractual obligation financings, where debt service is paid from non-state sources in the first instance, and State appropriations are available, but typically not expected to be needed, to make payments. State debt is reported in the Plan on a cash basis and includes all debt issued by the State and public authorities acting on its behalf for government activities and business-type activities as defined in the CAFR. State debt does not include debt that is issued by State public authorities for which the State has no financial obligation (i.e., conduit debt ), or debt issued by or on behalf of local governments and secured (in whole or in part) by State local assistance aid payments. For example, certain school districts and New York City have pledged State aid to help pay debt service for locally sponsored and locally determined financings. Additionally, certain of the State s public authorities issue debt supported by non-state resources (i.e., NYSTA toll revenue bonds, TBTA or MTA revenue bonds, or DASNY dormitory facilities revenue bonds) or issue debt on behalf of private clients (i.e., DASNY hospital revenue bonds). Because this debt was not issued by the State (nor on behalf of the State), it does not result in a State obligation to pay debt service, and is not considered State debt in the CAFR, therefore it is not included in the Plan. Instead, this debt is accounted for in the respective financial statements of the local governments responsible for the issuance of such debt. For More Information Additional information on the State s debt portfolio is available on DOB s public website (New York State Division of the Budget). The Investor s Guide section of the site contains detailed information on New York State bonds including: swap and variable rate capacity reports, PIT and Sales Tax Revenue Bond debt service and debt outstanding, credit ratings on New York State bonds, and the State s bond issuance schedule. In addition, the State s public website (New York Bonds) is tailored to potential investors of New York State bonds. The site provides specific information on the types of credits that New York State offers as well as the process for purchasing bonds. 2 FY 2017 Capital Program and Financing Plan

11 Executive Summary

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13 Executive Summary Capital and Debt At-A-Glance CAPITAL SPENDING AND DEBT MEASURES AT-A-GLANCE (millions of dollars) Results Estimated Projections FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Capital Spending 8,287 10,769 11,857 12,756 12,614 12,263 11,223 Annual Growth -9.0% 29.9% 10.1% 7.6% -1.1% -2.8% -8.5% Financing Source Pay-As-You-Go (Federal and State) 4,022 5,496 5,609 5,798 5,622 5,278 4,847 Annual Growth -6.7% 36.6% 2.1% 3.4% -3.0% -6.1% -8.2% Bonded Capital Spending 4,265 5,273 6,248 6,958 6,992 6,985 6,376 Annual Growth -11.0% 23.6% 18.5% 11.4% 0.5% -0.1% -8.7% Capital Spending Category Capital Spending in State Financial Plan 7,548 10,010 11,004 11,893 11,818 11,492 10,453 Annual Growth -2.6% 32.6% 9.9% 8.1% -0.6% -2.8% -9.0% Capital Spending Directly from Bond Proceeds Annual Growth -45.4% 2.7% 12.4% 1.2% -7.7% -3.2% -0.1% Capital Spending by Program Transportation (1) 4,424 5,358 4,872 4,761 4,911 5,072 4,636 Annual Growth -1.9% 21.1% -9.1% -2.3% 3.1% 3.3% -8.6% Education Annual Growth -25.9% 351.8% 53.9% 64.8% -25.1% -14.0% -96.0% Higher Education 1,462 1,492 1,536 1,530 1,496 1,490 1,465 Annual Growth -15.1% 2.0% 3.0% -0.4% -2.3% -0.4% -1.7% Economic Development and Government Oversight ,120 1,319 1,328 1,381 1,300 Annual Growth -0.5% 40.0% 57.0% 17.8% 0.7% 4.0% -5.9% Mental Hygiene Annual Growth -5.0% 12.1% 7.4% 2.4% -10.7% 0.2% 0.0% Parks and Environment Annual Growth -21.9% 10.5% 12.5% 12.8% 1.9% -6.5% -10.2% Health Annual Growth -73.3% 23.0% 96.7% 131.9% 31.2% -50.9% 30.6% Social Welfare Annual Growth -3.3% 19.4% 70.4% 61.2% 47.0% 2.8% -14.8% Public Protection Annual Growth 16.1% 36.5% 0.8% -11.4% -10.6% -2.7% -1.4% All Other 226 1,043 1,647 1,592 1,159 1,162 1,145 Annual Growth 17.3% 360.8% 58.0% -3.4% -27.2% 0.2% -1.4% Debt Measures State-Related Debt Outstanding 54,190 52,751 54,693 56,706 58,366 60,362 61,007 Annual Growth -1.8% -2.7% 3.7% 3.7% 2.9% 3.4% 1.1% State-Related Debt Service 6,652 5,981 5,923 6,779 7,104 7,303 7,515 Annual Growth -3.4% -10.1% -1.0% 14.5% 4.8% 2.8% 2.9% Debt Issuances 3,246 3,605 5,989 6,369 6,305 6,096 5,484 Annual Growth -14.9% 11.0% 66.1% 6.4% -1.0% -3.3% -10.0% Debt Outstanding as a % of Personal Income 4.9% 4.6% 4.6% 4.5% 4.4% 4.4% 4.2% Debt Service as a % of All Funds Receipts 4.5% 3.9% 3.9% 4.3% 4.4% 4.5% 4.4% Debt per Capita 2,744 2,664 2,756 2,852 2,931 3,027 3,055 Debt Reform Act - Debt Capacity (Cumulative) 3,560 4,371 3,025 1, (1) Acceleration of Federal transportation spending causing a year-over-year decline in FY State and Federal appropriation levels for DOT increase by over $500 million in FY 2017 to support a $22.1 billion five-year transportation program. FY 2017 Capital Program and Financing Plan 5

14 Executive Summary FY 2017 Capital Plan Summary The FY 2017 Executive Budget Capital Plan funds the capital needs of State agencies, increases support for new statewide initiatives, and maintains affordable levels of debt. Capital spending is projected to increase from $10.8 billion in FY 2016 to $11.9 billion in FY 2017, an increase of $1.1 billion, or 10 percent. This increased spending is, in part, due to new initiatives funded with monetary settlements. The Plan includes substantial new investments for the preservation and improvement of roadways, bridges, and transit systems; affordable and supportive housing units; capital grants to foster further economic growth; and environmental protection and infrastructure. Additionally, the Plan includes continued funding for State parks, and educational, mental health, health care, and correctional facilities. Debt issuances for five-year capital projections are sized to fit within the limits established by the State s statutory debt cap. With the proposed capital initiatives in the FY 2017 Executive Capital Plan, the State will continue to experience steady improvement in common debt affordability measures over the next five-year period. Debt outstanding is projected to decline from $55.7 billion in FY 2011 to $52.8 billion in FY For the first time in over 50 years, debt outstanding declined for three consecutive years (FY 2013 through FY 2015) and is expected to decline for a fourth consecutive year in FY Executive Capital Initiatives The FY 2017 Executive Budget recommends funding the following initiatives: Transportation and Transit: The FY 2017 Executive Budget includes a $22.1 billion capital plan to preserve and upgrade roads, bridges, and other vital transportation infrastructure throughout the State. Furthermore, the Budget proposes a Thruway Toll Reduction and Protection Plan that would freeze tolls for all drivers until 2020 and would provide a tax credit to passenger, business, and farm vehicles for a three-year period beginning January 1, MTA Capital Commitment. The Executive Budget also reflects the Governor's commitment of $8.3 billion in State resources toward funding the MTA's $26.1 billion transit capital plan. The Budget includes legislation, known as the Metropolitan Transportation Capital Financing Act of 2016, that commits the State and the City of New York to fund, over a multi-year period, $10.8 billion in capital costs related to projects contained in the MTA s capital program. The State share of $8.3 billion will consist of $1 billion in appropriations first enacted in the FY 2016 State budget and additional funds sufficient for MTA to pay $7.3 billion of capital costs as provided in the FY 2017 Executive Budget. The City share of $2.5 billion will consist of $657 million to be provided by the City from 2015 through 2019, and additional funds sufficient for MTA to pay $1.8 billion of capital costs for the MTA capital program. 6 FY 2017 Capital Program and Financing Plan

15 Executive Summary Affordable and Homeless Housing: The Executive Budget includes a $20 billion comprehensive multi-year investment in affordable housing and services for individuals and families who are homeless or at risk of homelessness. Funding will be used to expand efforts to create, improve, and preserve homeless and affordable housing opportunities through a statewide multiagency housing and community development program, promote efforts to revitalize neighborhoods across the State, and support the State s emergency homeless response. Environmental Protection and Clean Water Infrastructure: The Plan proposes increasing the EPF to $300 million, which would be the highest level in the State's history. Additionally, the Plan includes $100 million to reinforce the State's clean water and sewer infrastructure. Economic Development: The FY 2017 Executive Budget continues to provide statewide economic development grants, including $200 million for the Upstate Revitalization Initiative, $180 million to continue developing high-tech industries, and over $100 million for other economic development initiatives. Additionally, the Plan maintains $150 million for a sixth round of Regional Economic Development Council grants and $110 million for NYSUNY 2020 and NYCUNY 2020 grants. FY 2017 Capital Program and Financing Plan 7

16 Executive Summary Monetary Settlements The State expects to receive a total of $8.3 billion from monetary settlements reached by the Department of Financial Services, Department of Law, and Manhattan District Attorney s Office with financial institutions in FYs 2015, 2016, and The following table outlines the proposed uses: USE OF MONETARY SETTLEMENTS FY 2016 Enacted Budget FY 2017 Executive Budget Two-Year Capital Purpose 4,550,000 1,960,000 6,510,000 Thruway Stabilization Program 1,285, ,000 1,985,000 Upstate Revitalization Initiative 1,500, ,000 1,670,000 Affordable and Homeless Housing 0 590, ,000 Broadband Initiative 500, ,000 Health Care 355, ,000 MTA Capital Plan (Penn Station Access) 250, ,000 DOT Capital Plan Contribution 0 200, ,000 Municipal Restructuring and Consolidation 150,000 20, ,000 Security and Emergency Response 150, ,000 Long Island Transformative Projects 150, ,000 Environmental Protection Fund 0 120, ,000 Upstate Infrastructure and State Fair 115, ,000 Other Economic Development Projects 0 85,000 85,000 Southern Tier & Hudson Valley Farmland 50, ,000 Emergency Homeless Housing Response 0 50,000 50,000 Empire State Poverty Reduction Initiative 0 25,000 25,000 Community Health Care Revolving Loans 19, ,500 Roswell Park Cancer Institute 15, ,500 Behavioral Health Care Grants 10, ,000 Non-Capital Purposes 1,482, ,000 1,822,000 Federal Audit Disallowance 850, ,000 Thruway Toll Credit 0 340, ,000 Financial Plan/Budgetary Relief 1 627, ,000 OASAS Services 5, ,000 6,032,000 2,300,000 8,332,000 1 This spends out as $275 million in FY 2015, $250 million in FY 2016, and $102 million in FY FY 2017 Capital Program and Financing Plan

17 Executive Summary Use of Monetary Settlements The Executive Budget proposes to use the majority of available monetary settlement resources to fund new capital investments. PROPOSED USE/RESERVE OF AVAILABLE SETTLEMENTS (millions of dollars) TOTAL SETTLEMENTS (FY FY 2017) (8,332) Financial Plan - Purposes (FY FY 2017) (627) FY 2016 Enacted Budget Initiatives (5,405) FY 2017 Executive Budget Prosed Uses (2,300) Transfer to Dedicated Infrastructure Investment Fund (1,840) New York State Thruway Toll Credit (340) Transfer to Environmental Protection Fund (120) The FY 2017 Executive Budget recommends the allocation of $2.3 billion of remaining settlement funds such that $2.0 billion goes towards capital projects ($1.84 billion from the DIIF and $120 million from the EPF) and $340 million funds the three-year Thruway Toll Reduction Plan. Specific investments include: Capital Spending from Monetary Settlement Funds: Thruway Stabilization Plan ($700 million): The Budget invests $700 million in Thruway infrastructure, in addition to last year s appropriation of $1.285 billion. This two-year investment, of nearly $2 billion, will support both the New NY Bridge project and other core transportation infrastructure needs. This investment is expected to allow the Thruway to freeze tolls for all drivers until at least Transportation Capital Plan ($200 million): The Executive Budget proposes $200 million in monetary settlement funds towards transportation infrastructure projects across the State, consistent with the $22.1 billion five-year State transportation capital plan. This Plan will improve roads, bridges, airports, rail facilities, ports and transit systems funded through the DOT budget and make State-funded investments in the Thruway. FY 2017 Capital Program and Financing Plan 9

18 Executive Summary Homeless and Affordable Housing ($640 million): The Executive Budget includes a $20 billion comprehensive multi-year investment in affordable housing and services for individuals and families who are homeless or at risk of homelessness. Funding will be used to expand efforts to create, improve, and preserve homeless and affordable housing opportunities through a statewide, multi-agency, housing and community development program, and to promote efforts to revitalize neighborhoods across the State. Additionally, the Plan supports the State s emergency homeless response. The Budget provides $640 million in settlement funds to support these efforts. Environmental Protection ($120 million): The Executive Budget increases funding for the EPF to $300 million the highest amount ever for the fund and more than twice the fund s level when the Governor first took office. The EPF offers wide ranging benefits to communities throughout the State and plays an important role in preserving the State s natural resources and habitats. It funds land acquisition, farmland protection, waterfront revitalization, municipal recycling, and local government assistance to improve wastewater treatment plants and municipal parks. It supports the stewardship of public lands, including State parks and millions of acres of public lands throughout the State. Beginning in FY 2017, the EPF will also support programs for greenhouse gas management and resiliency. The Budget recommends $120 million of monetary settlement funds be made available to support capital projects within the EPF. Economic Development ($255 million): The Budget supports economic development purposes that will continue driving growth throughout State. This includes $170 million in monetary settlement funds to support the Upstate Revitalization Initiative. An additional $30 million is provided through ESD, for a total of $200 million. Modeled on the Buffalo Billion initiative, and the existing structure of the Regional Economic Development Councils, this initiative targets investment to economically-distressed Upstate regions on a competitive basis. These additional funds are available to the four regions (North Country, Capital District, Mohawk Valley and Mid-Hudson) that were eligible for the first round of the Upstate Revitalization Initiative but were not a 2015 Best Plan Awardee. An additional $85 million of monetary settlement funds will support other transformative economic development and infrastructure projects. Empire State Poverty Reduction Initiative ($25 million): The Budget includes $25 million of new funding to significantly expand the anti-poverty initiative begun in Planning grants totaling $5 million will be available in ten communities with high concentrations of poverty. In addition, $20 million will be available for grants to match private sector and foundation funding. Municipal Consolidation ($20 million): To help lower the cost of government and reduce the burden placed on property taxpayers, the Budget includes $20 million to advance and enhance programs that encourage local municipal government consolidations through a competitive process. 10 FY 2017 Capital Program and Financing Plan

19 Executive Summary General Fund Reserve to Offset Costs: Thruway Toll Reduction Plan ($340 million): The Budget also cuts tolls in half for the New York residents and businesses who utilize the State Thruway system most often by creating a three-year nonrefundable credit for Thruway tolls paid electronically. The toll reduction would impact nearly one million passenger, business, and farm vehicles. Drivers of passenger vehicles who spend at least $50 annually, and businesses and commercial account holders who spend between $100 and $9,999 annually, in Thruway tolls, would receive a tax credit worth 50 percent of tolls paid. For farmers, the Executive Budget provides a 100 percent nonrefundable credit for farm vehicle use on the Thruway. The program would begin on January 1, 2016 and sunset December 31, Over the three years, it is estimated that drivers will save a total of $340 million. FY 2017 Capital Program and Financing Plan 11

20 Executive Summary Statewide Capital Spending Statewide capital spending for FY 2017 is estimated to total approximately $22.6 billion, including $11.9 billion of State spending and $10.8 billion of public authority spending (not captured in the State budget). The following table shows the capital spending projections for State agencies and public authorities in FY It is compiled based on several sources and assumptions. (The projections are for fiscal years ending in 2017, except where noted.) For more information on capital spending, please refer to the Five-Year and Agency Capital Plans sections of this report. ESTIMATED CAPITAL SPENDING INCLUDED IN STATE BUDGET State Disbursements State Agencies FY 2017 Public Authorities 3 City University of New York 535,000 Albany Port District Commission 3,899 Department of Agriculture and Markets 4,001 Battery Park City Authority 58,394 Department of Correctional Services 298,088 Buffalo and Fort Erie Public Bridge Authority 35,906 Department of Environmental Conservation 659,251 Capital District Transportation Authority 5,000 Department of Health 285,289 Central New York Regional Transportation Authority 12,949 Department of Law 5,000 Development Authority of the North Country 5,281 Department of Motor Vehicles 204,488 Homes and Community Renewal 1 1,256,644 Department of Transportation 4,173,965 Job Development Authority 27,000 Division of Housing and Community Renewal 1 176,227 Long Island Power Authority 508,578 Division of Military and Naval Affairs 72,707 Metropolitan Transportation Authority 1 & 4 3,309,600 Division of State Police 32,141 New York Power Authority 478,601 Empire State Development Corporation 1,073,915 New York State Bridge Authority 14,729 Energy Research and Development Authority 23,450 Niagara Frontier Transportation Authority 74,437 Higher Education Facilities Capital Matching Grants 20,000 Ogdensburg Bridge and Port Authority 36,098 Homeland Security and Emergency Services 47,500 Port Authority of New York and New Jersey 3,499,925 Judiciary 5,100 Port of Oswego Authority 27,181 Metropolitan Transportation Authority 1 493,229 Rochester-Genesee Transportation Authority 8,876 NYS Economic Development Programs 8,433 Thousand Islands Bridge Authority 4,555 Non Profit Capital Investment Program 13,000 Thruway Authority 2 1,395,673 Office for People with Developmental Disabilities 86,099 United Nations Development Corporation 10,784 Office of Alcoholism and Substance Abuse Services 64,523 Office of Children and Family Services 20,931 - Public Authorities 10,774,110 Office of General Services 129,883 Office of Information Technology 155,250 1 These agencies have both state and authority disbursements. Office of Mental Health 319,610 2 Thruway Authority has both state and authority disbursements. On the state side Office of Parks, Recreation and Historic Preservation 133,150 they are captured in the Special Infrastructure agency. Office of State Comptroller 4,600 3 Authority numbers are from the NY Works Statewide Capital Plan. Excludes conduit Office of Temporary and Disability Assistance 63,400 financing entities: DASNY and EFC. Olympic Regional Development Authority 7,500 4 MTA authority disbursement number is for FY Power Authority of New York 2,500 Special Infrastructure 2 1,101,448 State and Municipal Capital Facilities 160,000 State Education Department 411,923 State Equipment Financing 50,000 State University of New York 980,999 - State Budgeted Capital Spending 11,856,600 Workers Compensation Board 10,000 - Public Authorities (Not in State Budget) 10,774,110 World Trade Center 24,000 22,630,710 - State Agencies 11,856,600 ESTIMATED CAPITAL SPENDING BY AUTHORITIES NOT INCLUDED IN STATE BUDGET TOTAL ESTIMATED CAPITAL SPENDING IN FY 2017 Authority Disbursements FY These agencies have both state and authority disbursements. 2 Thruway Authority has both state and authority disbursements. On the state side they are captured in the Special Infrastructure agency. 12 FY 2017 Capital Program and Financing Plan

21 Executive Summary Capital and Debt Management Reforms The Executive Capital Plan includes statutory and administrative reforms that are expected to enhance the State s capital and debt management practices, and generate savings for FY 2017 and beyond. The reforms include: Continuing to advance economic refunding opportunities to lower the State s debt service costs. The State will continue to pursue opportunities to efficiently refund its debt, taking advantage of the current low interest rate environment. Continuing to utilize the State s new Sales Tax Revenue Bond credit to reduce interest costs and streamline debt issuance. The new credit is secured by one penny of the State sales tax, and replicates the strong credit features of the PIT Bond program. This will continue to diversify the State's credit offerings, and enable greater investor participation, resulting in lower debt service costs. Continuing to prohibit borrowing to finance State administrative personnel. These costs will be funded from annual operating revenue. Including a transfer and the ability to spend up to $500 million from DRRF that could be used to reduce the State s debt burden and maintain bond capacity under the State s debt caps. Potential DRRF uses include paying down existing debt, and cash financing capital projects that would otherwise be funded with debt. Continuing the State s policy goal of selling at least 50 percent of new debt issuances on a competitive basis in FY 2017, market conditions permitting. As of December 31, 2015, the State has issued $3.2 billion, or 55 percent, in debt on a competitive basis in FY Factoring in the remaining bond sales in FY 2016, the State plans to sell about 50 percent of total issuances competitively. Continuing to pursue options to improve oversight and management of State-supported bond transactions. The State (DOB) has centralized procurement for Financial Advisor Services, whereby DOB and its State debt issuers use one financial advisor for all bond transactions to be executed in FY 2017 and beyond. This ensures consistent and highquality advice across State bond transactions. DOB will continue to explore other opportunities to consolidate and streamline management of the State debt portfolio. FY 2017 Capital Program and Financing Plan 13

22 Executive Summary Capital Projects Spending Overview State capital projects spending is projected to total $11.9 billion in FY This includes $11.0 billion in spending that appears in the State s Financial Plan and $853 million in off-budget spending that is financed directly from bond proceeds. Capital spending in FY 2017 is expected to be financed with State-supported debt ($6.3 billion, 53 percent); State cash resources ($4.0 billion, 33 percent); and Federal aid ($1.6 billion, 14 percent). Capital spending over the next five years is expected to average approximately $12.1 billion annually. In FY 2017, capital spending growth is projected to increase by 10 percent on a year-over-year basis. Debt Outstanding State-related debt outstanding is projected to total $54.7 billion in FY 2017, an increase of $1.9 billion (3.7 percent) from FY New debt issuances are expected to total $6.0 billion in FY 2017, offset by $4.0 billion in debt retirements. The annual increase in debt outstanding includes $1.2 billion for education facilities, $625 million for transportation, $452 million for health and mental hygiene, and $150 million for economic development and housing. Over the period of the Plan, State-related debt outstanding is projected to increase from $52.8 billion in FY 2016 to $61.0 billion in, or an average increase of 3.0 percent annually. Debt Issuances Debt issuances totaling $6.0 billion are planned to finance new capital project spending in FY 2017, an increase of $2.4 billion (66 percent) from FY The bond issuances will finance capital commitments for education ($1.9 billion), transportation ($1.7 billion), economic development ($793 million), health and mental hygiene ($810 million), State facilities and equipment ($412 million), and the environment ($371 million). Over the period of the Plan, new debt issuances are projected to total $30.2 billion. New issuances are for education facilities ($9.4 billion), transportation infrastructure ($8.8 billion), economic development ($4.0 billion), mental hygiene and health care facilities ($4.1 billion), State facilities and equipment ($2.1 billion), and the environment ($1.9 billion). 14 FY 2017 Capital Program and Financing Plan

23 Executive Summary Debt Retirements The State expects to retire $4.0 billion of debt in FY 2017, approximately $137 million (3.3 percent) less than in FY The majority of the decrease in retirements is for transportation, and relates to the refunding of prior Dedicated Highway bonds. This is offset by increases in retirements for economic development and housing ($56 million), health and mental hygiene ($39 million), and LGAC ($14 million). Additional retirements are possible through debt management actions, including the use of DRRF. Debt retirements are projected to increase to $4.8 billion in. Debt Service State-related debt service is projected at $5.9 billion in FY 2017, a decrease of 58 million (1.0 percent) from FY This is due, in large part, to $550 million in debt prepayments in FY State-supported debt service, which is the better measure of State resources needed to pay annual debt service, is projected at $5.4 billion in FY 2017, essentially flat from FY State-related debt service is projected to increase from $6.0 billion in FY 2016 to $7.5 billion in, an average rate of 4.7 percent annually. Debt Affordability Measures Overall debt affordability measures from FY 2016 through show: State-supported debt outstanding is projected to remain under the statutory debt cap over the Plan period, declining to an estimated low point of about $206 million in excess capacity in FY State-related debt service as a share of All Funds Receipts is projected to stay flat at 3.9 percent in FYs 2016 and 2017, and then increase to 4.4 percent in. State-related debt outstanding as a percentage of personal income is expected to decrease from 4.6 percent in FY 2016 to 4.2 percent in. FY 2017 Capital Program and Financing Plan 15

24 Executive Summary Debt Reform Act Limit The Debt Reform Act of 2000 ( Debt Reform Act ) restricts the issuance of State-supported debt to capital purposes only, and for maximum terms of 30 years. The Debt Reform Act limits the amount of new State-supported debt to 4 percent of State personal income, and new Statesupported debt service costs to 5 percent of All Funds receipts. The restrictions apply to all new State-supported debt issued since April 1, The cap on new State-supported debt outstanding began at 0.75 percent of personal income in FY 2001, and was fully phased in at 4 percent of personal income during FY The cap on new State-supported debt service costs began at 0.75 percent of All Funds receipts in FY 2001, and was fully phased in at 5 percent during FY The State was found to be in compliance with the statutory caps in the most recent calculation period (FY 2015). Current projections anticipate that debt outstanding and debt service will continue to remain below the limits imposed by the Debt Reform Act. Based on the most recent personal income and debt outstanding forecasts, the available room under the debt outstanding cap is expected to decline from $4.4 billion in FY 2016 to $206 million in FY This includes the estimated impact of the bond-financed portion of proposed increased capital commitment levels. Debt outstanding and debt service caps continue to include the existing SUNY Dormitory Facilities lease revenue bonds, which are backed by a general obligation pledge of SUNY. Bonds issued under the new SUNY Dormitory Facilities Revenue credit are not included in the State s calculation of debt caps. Capital spending priorities and debt financing practices may be adjusted from time to time to preserve available debt capacity and stay within the statutory limits, as events warrant. DEBT OUTSTANDING SUBJECT TO CAP TOTAL STATE-SUPPORTED DEBT (millions of dollars) (millions of dollars) Personal Debt Outstanding $ Remaining Debt as a % Remaining Debt Outstanding State-Supported Year Income Cap % Cap $ Since April 1, 2000 Capacity % of PI Capacity Prior to April 1, 2000 Debt Outstanding FY ,141, % 45,659 41,288 4, % 0.38% 9,590 50,878 FY ,199, % 47,969 44,944 3, % 0.25% 8,285 53,230 FY ,258, % 50,342 48,738 1, % 0.13% 6,922 55,660 FY ,321, % 52,842 52, % 0.05% 5,870 58,063 FY ,384, % 55,380 55, % 0.01% 4,948 60,123 1,449, % 57,960 57, % 0.04% 3,477 60,835 DEBT SERVICE SUBJECT TO CAP TOTAL STATE-SUPPORTED DEBT (millions of dollars) (millions of dollars) All Funds Debt Service $ Remaining DS as a % Remaining Debt Service State-Supported Year Receipts Cap % Cap $ Since April 1, 2000 Capacity % of Revenue Capacity Prior to April 1, 2000 Debt Service FY , % 7,672 4,087 3, % 2.34% 1,339 5,426 FY , % 7,649 4,439 3, % 2.10% 990 5,429 FY , % 7,862 4,901 2, % 1.88% 1,397 6,298 FY , % 7,995 5,405 2, % 1.62% 1,372 6,776 FY , % 8,198 5,868 2, % 1.42% 1,356 7, , % 8,548 6,244 2, % 1.35% 1,192 7, FY 2017 Capital Program and Financing Plan

25 Capital Program and Financing Plan

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27 Capital Program and Financing Plan FY 2017 Capital Projects Spending The Executive Capital Plan balances the need to preserve the State s assets, invest in new initiatives, and maintain a plan that is affordable. The Plan limits debt issuances to a level that allows the State to remain in compliance with its statutorily imposed debt limits and maintains sufficient capital spending for core capital projects. Also, the Plan recommends substantial new investments in transportation and transit infrastructure, affordable and homeless housing, economic development, and environmental protection and infrastructure. Spending on capital projects is projected to total $11.9 billion in FY 2017, which includes $853 million in off-budget spending. Overall, capital spending in FY 2017 is projected to increase by $1.1 million or 10 percent from FY CAPITAL SPENDING BY FUNCTION AND FINANCING SOURCE CAPITAL PROGRAM AND FINANCING PLAN FY 2016 AND FY 2017 Annual Change Annual % Change FY 2016 FY 2017 Spending Transportation (1) 5,357,524 4,871,682 (485,842) -9% Education 267, , ,191 54% Higher Education 1,491,691 1,535,999 44,308 3% Economic Development & Gov't. Oversight 713,308 1,119, ,491 57% Parks and Environment 704, ,401 88,111 13% Mental Hygiene 437, ,232 32,594 7% Health 144, , ,789 97% Social Welfare 160, , ,996 70% Public Protection 447, ,436 3,403 1% General Government 158, , ,455 86% All Other 886,070 1,350, ,078 52% 10,769,026 11,856,600 1,087,574 10% Off-Budget Spending (2) (758,750) (852,504) (93,754) Financial Plan Capital Spending 10,010,276 11,004, ,820 10% FY 2016 FY 2017 Change Change Financing Source Authority Bonds 4,799,066 5,648, ,422 18% Federal Pay-As-You-Go 2,146,237 1,626,560 (519,677) -24% State Pay-As-You-Go 3,349,617 3,982, ,448 19% General Obligation Bonds 474, , ,381 26% 10,769,026 11,856,600 1,087,574 10% (1) Acceleration of Federal transportation spending causing a year-over-year decline in FY State and Federal appropriation levels for DOT increase by over $500 million in FY 2017 to support a $22.1 billion five-year transportation program. (2) Represents spending which occurs directly from bond proceeds held by public authorities. FY 2017 Capital Program and Financing Plan 19

28 Capital Program and Financing Plan Capital Projects Appropriations The Executive Budget includes $13.1 billion in capital appropriation authority, all of which will be committed and spent over a multi-year period. FY 2017 EXECUTIVE BUDGET CAPITAL APPROPRIATIONS FY 2017 FY 2017 Appropriation Appropriation Special Infrastructure Account 1,250,000 Parks & Environment 1,013,300 Thruway Stabilization Program 700,000 DEC Program 358,600 DOT Capital Contribution 200,000 Environmental Protection Fund 300,000 Upstate Revitalization Initiative 170,000 Parks and Historical Preservation 154,700 Other Economic Development 85,000 Superfund 100,000 Emergency Homeless Housing and Services 50,000 NYS Water Infrastructure 100,000 Empire State Poverty Reduction Initiative 25,000 Municipal Consolidation Competition 20,000 Economic Development 904,751 Regional Economic Development Councils 150,000 Transportation/Transit 5,765,325 NY SUNY & CUNY 2020 Grants 110,000 Local Highway and Bridge Program 477,797 Economic Development at Nano Utica 100,000 Transportation Infrastructure and Facilities 219,475 Upstate Revitalization Initiative 30,000 Airport Revitalization Competition 200,000 All Other Economic Development 514,751 State and Local Bridge Program 150,000 Transportation and DMV Capital Program 4,718,053 Higher Education 633,654 SUNY/CUNY Systemwide Maintenance 353,000 Social Welfare 2,244,175 SUNY Hospitals 175,000 Affordable & Homeless Housing Plan 1,973,475 Community College Projects 75,654 DHCR and OTDA Programs 160,700 Capital Matching Grants 30,000 Raise the Age 110,000 All Other Capital Appropriations 730,006 Health & Mental Hygiene 532,572 Mental Hygiene Program 374,472 DOH Program 128,100 Capital Appropriations 13,073,783 SHIN-NY 30,000 For a complete description of how these funds will be used, please refer to the Five-Year and Agency Capital Plan sections of this report. 20 FY 2017 Capital Program and Financing Plan

29 Capital Program and Financing Plan Annual Capital Spending Disbursements and Debt Impacts The following sections summarize total capital spending from new and existing appropriations included in the FY 2017 Executive Budget and the related impact on State debt. Economic Development & Gov't. Oversight $1,119,799 9% FY 2017 Capital Spending by Function Mental Hygiene $470,232 4% Parks and Environment $792,401 7% Health $285,289 2% Social Welfare $273,558 2% Public Protection $450,436 4% General Government $295,133 3% Higher Education $1,535,999 13% Other $1,350,148 11% Education $411,923 4% Transportation $4,871,682 41% In FY 2017, transportation spending is projected to total $4.9 billion, which represents 41 percent of total capital spending, with higher education comprising the next largest share at 13 percent. Economic development and government oversight spending represents 9 percent and spending for parks and the environment represents 7 percent. Other spending, which includes Special Infrastructure Account investments, accounts for 11 percent. The remaining 19 percent is comprised of spending for health, mental hygiene, social welfare, public protection, education, and general government. Transportation spending is projected to decrease by $486 million (9 percent) in FY 2017 due to the timing of obligations that are being supported with Federal transportation funding. Parks and environment spending will increase $88 million (13 percent) in FY 2017 reflecting spending from additional capital authority provided in the SPIF, Hazardous Waste Remediation Fund, and EPF; as well as spending for drinking water and clean water infrastructure upgrades. FY 2017 Capital Program and Financing Plan 21

30 Capital Program and Financing Plan Economic development and government oversight spending is projected to increase by $406 million (57 percent). This spending reflects the continued implementation of programs created to promote regional economic development including spending for the Buffalo Billion initiative, Upstate Revitalization Initiative, Regional Economic Development Councils, and SUNY and CUNY 2020 Challenge Grants. Spending for health care is projected to increase by $141 million (97 percent) in FY The increase is due to grant awards for the Health Care Restructuring Program, expected in FY 2017, as well as the phase-in of spending related to the Health Care Facility Transformation Program. Spending for social welfare is projected to increase by $113 million (70 percent) due, primarily, to the implementation of the new Homeless and Affordable Housing Program. Education spending is projected to increase by $144 million (54 percent) in FY The increase is due to spending from the Smart Schools Bond Act, which was approved by voters in November Higher education spending is projected to increase by $44 million (3 percent). This growth is primarily driven by additional maintenance investments in senior and community college projects. Spending for public protection is projected to increase by $3 million (1 percent) in FY Mental hygiene capital spending is anticipated to increase by $33 million (7 percent). The increase is primarily attributable to the reconstruction of the South Beach Psychiatric Center in Staten Island. General government capital spending is projected to increase by $136 million (86 percent), which is primarily attributable to information technology systems purchases. Spending for agencies in the All Other category is projected to increase by $464 million (52 percent). The increase is related to projected spending on Special Infrastructure Account investments, including a sizable contribution to the ongoing construction of the New NY Bridge and other capital projects for the State Thruway. 22 FY 2017 Capital Program and Financing Plan

31 Capital Program and Financing Plan Financing FY 2017 Capital Projects Spending FY 2017 Capital Spending by Financing Source General Obligation Bonds $599,487 5% Authority Bonds $5,648,488 48% Federal PAYGO $1,626,560 14% State PAYGO $3,982,065 33% In FY 2017, the State plans to finance 53 percent of capital projects spending with long-term bonds, most of which will be issued on behalf of the State through public authorities (48 percent) and the remainder of which will be issued as General Obligation Bonds (5 percent). Authority bonds do not include debt issued by authorities backed by their own non-state resources or on behalf of private clients. Federal aid is expected to fund 14 percent of the State s FY 2017 capital spending, primarily for transportation. State cash resources, including monetary settlement money, will finance the remaining 33 percent of capital spending. Year-to-year, total PAYGO support is projected to increase $113 million, with State PAYGO increasing by $632 million and Federal PAYGO support decreasing by $520 million. Bond-financed spending is projected to increase by $975 million. FY 2017 Capital Program and Financing Plan 23

32 Capital Program and Financing Plan FY 2017 Debt Issuances Debt issuances will finance capital investments for transportation, for higher education, to protect the environment, to enhance the State s economic development, and to maintain correctional and mental hygiene facilities. The State expects to issue $6.0 billion in debt during FY 2017 to finance existing and newlyauthorized capital program initiatives. Consistent with recent experience, education and transportation projects are projected to represent approximately sixty percent of new issuances. The remaining balance is divided between economic development and housing, environmental facilities, health care and mental hygiene facilities, and State facilities. The State has transitioned to using only three credits PIT Revenue Bonds, Sales Tax Revenue Bonds, and General Obligation Bonds. It is the State s intention to sell 50 percent of bonds on a competitive basis in FY 2017, while continuing to maintain a significant presence roughly $3.0 billion, excluding refundings in the negotiated market. Issuing bonds on a competitive basis is an effective way to (i) lower borrowing costs, (ii) provide an essential benchmark for bonds sold on a negotiated basis, and (iii) increase transparency related to the bond sale process. As of December 31, 2015, the State has issued $3.2 billion, or 55 percent, in debt on a competitive basis in FY These sales provided consistently low interest costs compared to market indices and provided lower issuance costs. The $6.0 billion in new issuances are expected to be sold through various bond sales scheduled for FY 2017: $4.1 billion through the PIT Revenue Bond program; $1.3 billion through the Sales Tax Revenue Bond program; and $599 million of General Obligation Bonds. 24 FY 2017 Capital Program and Financing Plan