A little cheery news for you right before you hit the road for Thanksgiving Day travels. New York's transportation infrastructure is crumbling and the state government can't do much about it because it's broke. According to this article, New Yorkers face a Sophie's choice: Higher taxes and fees for state residents who already lead the U.S. in those categories, or roads, bridges and waterways that are falling apart. Take your pick.
This has implications for commercial lines of insurance. If the highways and bridges remain in a state of disrepair, look for more frequent and more severe auto insurance claims. Trucks traveling at high speeds will hit cracks and potholes, causing accidents. Alternatively, the state will close roads and bridges, sending vehicles to detours, unfamiliar routes, roads not meant for large truck traffic, etc. The result? More frequent and more severe accidents.
Should the state choose to raise revenue to buy improved highways and bridges, that may mean higher payrolls for construction contractors, generating higher liability and workers' compensation premiums. However, to the extent that higher taxes damage the state's economy, you could see flat or reduced sales exposures for retailers, wholesalers and manufacturers, leading to lower liability insurance premiums for those risks.
Some of this could be negated with help from the federal government, but the newly elected Congress appears to be in an anti-government spending mood. It's hard to foresee large checks for intrastructure spending flowing from Washington to Albany, regardless of how badly New York needs it.
No matter what happens, insurance professionals and their clients are going to feel some pain. If you were Governor-elect Andrew Cuomo and didn't have to deal with that pesky state Legislature, what would you do? Rebuild the roads to keep us competitive (not to mention safe) or keep a lid on taxes to stabilize and improve the economy? I'll tell you this much: I'm glad I'm not the one who has to decide. If you're not as wishy-washy as I am, sound off in the comments.