Most of a $511 million loan from a clean water fund for the construction of the new Tappan Zee Bridge was rejected by the federal government, raising new questions about how New York state will fund the $3.9 billion twin-span bridge.
The Environmental Protection Agency sent a letter to state agencies Tuesday saying that all but $29.1 million of the loans would be disqualified because the funds would be used mostly for construction-related work rather than conservation and water-quality projects.
“New York”™s request presents a unique circumstance that is unprecedented in the context of the (Clean Water State Revolving Fund); no other state has made a request of this type or magnitude,” Joan Leary Matthews, the director of the EPA”™s Region II clean water division, said in the letter.
A state agency called the Environmental Facilities Corp., or EFC, approved the no- and low-interest loans in June, despite outcries from some conservation groups that called the loans a misuse of money used for clean-water projects. The loans were sought for 12 projects and the EPA rejected seven of them.
The state can contest the EPA”™s ruling for 30 days from the decision. Jon Sorensen, director of public information for the EFC, said the agency would file an appeal.
“While this loan is not integral to the overall bridge construction, the projects identified here will clearly provide significant benefits for the Hudson River Estuary,” he said in a statement. “EPA Region II is simply wrong in its assessment.”
Gov. Andrew Cuomo, a Democrat, announced the loans earlier this year and celebrated them as a low-cost option for funding the bridge. The EPA”™s decision was already a talking point for the campaign of Rob Astorino, the Republican running against Cuomo in the November gubernatorial election.
Ed Cox, the state Republican Party chairman, said Cuomo “raided clean water funds to pay for a bridge.” Astorino released a statement calling the funding “dubious,” also bringing up the governor”™s alleged interference in an ethics commission he later disbanded prematurely.
“Slowly but surely, all the myths of the Cuomo administration are being exposed to sunlight,” he said.
Paul Gallay, president of the environmental group Riverkeeper, previously told members of the press that legal action would have been inevitable if the loans went through.
“Riverkpeer said this loan wouldn”™t pass federal review and sure enough, the EPA has struck almost all of it down,” he said in a statement. “Good for them. Now, the state needs to take the half-billion dollars it tried to loan to itself for the bridge and spend it properly ”“ on the state”™s wastewater infrastructure.”
Although the state has received a $1.6 billion loan from the U.S. Department of Transportation, the majority of funding remains elusive for the bridge construction. Some local elected representatives have said they fear the cost of the toll, currently $5 cash, will need to increase by as much as triple to fund the cost and interest.
Rockland County Executive Ed Day, a Republican, has said inflating the toll by that much could affect commerce by discouraging shoppers on the Westchester County side of the river from crossing into Rockland County.
State and federal officials have not yet publicly disclosed any studies to estimate what the toll would be. There are no planned increases this year or next, according to the state Thruway Authority. The agency, which will own and operate the new bridge, saw its bond rating reduced last year by Moody”™s Investors Service, which said the authority might not raise its tolls quickly enough to pay for the replacement bridge.
The rejected loans in total would have saved the state $17 million over three years when compared to traditional bonds, according to figures presented by the state this summer. Both major local business advocacy groups, the Westchester County Association and The Business Council of Westchester, had supported the loans partly because they were expected to keep future tolls down.
