2015 Reports

Using Environmental Clean-Up Funds to Replace the Tappan Zee Bridge

Cohen, Steven Alan; Martinez, Hayley

The New York State Environmental Facilities Corporation (EFC), a public benefit corporation that provides low-cost capital and technical assistance for environmental projects around the state, approved a $511 million loan to the state Thruway Authority for bridge-related projects, specifically the replacement of the Tappan Zee Bridge across the Hudson River. The Corporation approved the loan – half with no interest, and half with an interest rate of less than 4 percent – in late June 2014. The loan decision then went to the Public Authorities Control Board, which approved half of that amount – $256 million – in July 2014. However, a number of environmental organizations opposed the decision because funds were coming primarily from the Clean Water State Revolving Fund, a federally backed fund typically utilized to finance local sewer projects. Critics warned that the decision to use funds intended for water quality for another purpose could set a bad precedent, potentially nationally if copied by lawmakers in other states. Then in September 2014, the Environmental Protection Agency (EPA) rejected most of the state’s request for this loan. This case study examines the challenges of funding infrastructure projects, and looks at the controversy surrounding the funding of the New NY Bridge – the single largest infrastructure contract in the history of New York State, and a project that New York State Governor Andrew Cuomo cites as a major accomplishment of his administration.