Testimony Before The Assembly Standing Committee On Corporations, Authorities And Commissions’ Public Hearing To Examine The Gateway Program’s Progress
Chairperson Paulin and Members of the Committee:
Thank you for the opportunity to provide testimony today, and for your commitment to ensuring that critical capital projects like the Gateway Program spend taxpayer dollars efficiently.
One of the stated goals of this hearing is to examine how the costs and funding of the Gateway Programs and similar projects are allocated between New York, New Jersey, and other stakeholders. However, regardless of the equity of those allocations, our state, New York State, will be critically disadvantaged.
The issue is liability. New York State law inequitably allocates liability without consideration of which parties in a lawsuit are actually responsible. According to data from the Port Authority of New York and New Jersey (PANYNJ), the imbalanced allocation of liability in New York leads to liability-related loss costs that are twice as high on the New York side of a cross-border project than on the New Jersey side.
Many capital projects are self-insured, so those higher liability costs are direct costs, but for any organization, contractor, or government entity, third-party insurance for construction is typically several times more expensive in New York than in other states.
New York’s liability environment has an immediate cost for the Gateway project. According to an analysis from Common Good, a Brooklyn-based organization dedicated to simplifying law, New York’s liability environment will add $180 million to $300 million to the total costs of the Gateway Program. Previous analyses from think-tanks and universities have shown hundreds of millions in additional costs to New York infrastructure projects.
Any analysis of the price of crucial infrastructure projects in New York must include careful scrutiny of the outsized costs of liability in New York, especially in relation to our neighboring states. If the cost of the Gateway Program is to be allocated equitably, the liability environment in New York must be reformed to reflect the liability environment everywhere else.
Kindest regards,
Tom Stebbins
Executive Director
Lawsuit Reform Alliance of New York