As the 2015 legislative session begins in Albany, lawmakers are faced with what many no doubt see as a happy problem: how to spend $5 billion.
The money is a windfall from settlements with financial institutions and insurers accused of violating state and federal laws. New York has known since summer, when it reached a more than $3 billion settlement with BNP Paribas S.A., that big bucks were headed its way. By November, the total had reached $5.1 billion.
Legislators who have grown accustomed to year after year of multibillion-dollar deficits requiring painful decisions surely will be eager to allocate this windfall. It’s equally likely they will be pressured by a multitude of interest groups seeking part of the bounty.
It’s important, then, to be clear about how the money should—and should not—be spent.
The big “not”: Do not throw the money at things that will need ongoing funding after the onetime bonus is gone.
As Richard Brodsky, a liberal former assemblyman, and E.J. McMahon, the conservative president of the Empire Center for Public Policy, wrote in an op-ed after the BNP Paribas settlement was announced: “Never use an occasional windfall to pay for ongoing programs or tax cuts that will need new cash when the windfall is exhausted.”
Instead, use the money to fund long-needed capital investments.
No. 1 on the list should be the state’s transportation infrastructure. Everyone agrees that New York’s roads and bridges are in a sorry state, and this is a golden opportunity to do something about it.
In its 2015 policy agenda, Unshackle Upstate lists infrastructure investment as a top priority. The coalition supports the proposed creation of a $3.5 billion infrastructure bank to fund projects awarded through a regional process that identifies the most critical needs. This seems like a sound idea, but others can be considered too.
New York is unlikely to have another chance like this any time soon. Albany needs to get it right.
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