Capitol Notes

State loses millions of dollars in revenue due to less driving

The pandemic has been a boon to people who enjoy working from home or appreciate less traffic on the roads during their commute.

But these upsides also translate into a significant decrease in revenue for the state, which collects hundreds of millions of dollars annually from taxes on gasoline and highway usage. For the first two months of the fiscal year, revenue from the state’s taxes on motor fuel, highway use and petroleum were about $130 million below last year’s receipts, according to the latest cash report from the state comptroller’s office.

This drop in funding could have a long-term effect on the state’s infrastructure, according to Fred Hiffa, a top transportation official in the Pataki administration, who is now part of the Rebuild New York Now coalition, which advocates for infrastructure investment.

“All of those are significant revenue raisers that a portion of those proceeds go towards paying for those road and bridge jobs that people see while driving around,” Hiffa told The Capitol Pressroom.

He added that the state also projected a $20 million drop in taxes from car rentals, but warned that it could end up being twice that bad.

The drop in traffic is also hitting the Thruway Authority, which relies on tolls from drivers to help fund its operations.

Mike Elmendorf, head of the Associated General Contractors of New York State and a member of Rebuild New York Now, said non-commercial toll revenue on the thruway is down about 23 percent and commercial traffic was “way down.” He said it was unlikely that the Thruway Authority would be able to make up the revenue later in the year from tolls.

If the federal government doesn’t come to the rescue and make up this lost income connected to driving, Hiffa and Elmendorf hope the state is willing to pursue other sources of revenue for the infrastructure needs across New York.

The Capitol Pressroom · July 10, 2020: Drop in traffic jeopardizes funding for state infrastructure needs


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