By Sarah Trefethen
The question is not only how New York City will improve its infrastructure in the wake of Superstorm Sandy, but how will it pay for it?
Funding to maintain and improve transportation infrastructure was in short supply even before the storm, according to panelists at a conference yesterday hosted by Fordham University’s Graduate School of Business Administration.
The region’s rail transport, highways and airports are all in need of investment both to keep them in good repair and to expand their capacity to accomodate New York’s growing population, according to Elliot “Lee” Sander, former MTA chairman.
Sander is working with the Regional Planning Association to develop the a 20-year plan for infrastructure improvements, including the Second Avenue Subway, high-speed rail access to New Jersey, and improved public transportation in the outer boroughs. And this needs to be done, Sander said, without continuing to add to the MTA’s debt.
“We cannot have the disrepair the disinvestment, that we experienced in the 1960s, 70s and 80s,” Sander told the audience.
But this was all true before Sandy wreaked its havoc on the city, raising new, expensive questions about things like giant gates at the mouth of New York Harbor to hold back the sea. Politicians, citizens and policy makers are going to need to come to an agreement about how much to spend and what to spend it on, the panelists said.
“We have to figure out what it is we’re building before we can figure out how to finance it,” said Carol Kellermann, president of the Citizen’s Budget Commission.
Kellerman was involved in reconstruction in New Orleans after Katrina and in Haiti after the 2009 earthquake.
“I see patterns and I fear we don’t learn from these other experiences as much as we should,” she said, warning that allowing individual agencies and departments to spend money on pet projects without an overall plan will lead to inefficiency.
Inefficiency was also a concern for panelist Nicole Gelinas, a senior fellow at the Manhattan Institute who has written for years on New York City development issues. She warned that the $30 billion in federal aid the city has received in the wake of the storm will disappear quickly.
“The fact that this money is coming from Washington doesn’t relieve us of the duty to spend it wisely, because it is finite,” she said, adding later: “All of this money seems like a great gift to us, but if we don’t spend it wisely we’ll end up having just built what we had before and not fixing any issues.”
Just burying the city’s power lines, a move that could protect the electrical system from wind and rain, is estimated to cost tens of billions. Gelinas criticized Governor Andrew Cuomo’s proposal to pay market rate to homeowners for damaged homes in floodplains as “overspending” that would quickly drain the federal allocation.
“It’s a backwards way of thinking about infrastructure. Housing is not infrastructure. You build the infrastructure … and housing will come back,” Gelinas said.
And while federal funding is limited, the state has concerns of its own.
New York State is coming up against a legislative cap on its debt at — ironically — a time when interest rates are at record lows, according to Abraham Lackman, president of Praxis Insights and former secretary of the New York State Senate Finance Committee.
“One of the real perils that we will have going into the post-Sandy environment is, the state is on the verge of dropping out in terms of being a major funder of capital projects,” Lackman said.
A lack of investment in infrastructure over many years has left the city vulnurable to natural disasters, Gelinas alleged.
“Social spending and spending on public sector labor costs and benefits have been crowding out infrastructure,” she said. Health care costs for New York City employees have gone up $3 billion in the past 12 years, she said.
Kellerman, whose organization serves as a spending watchdog for taxpayers, reminded the audience that however the money is initially financed — through government grants, increased taxes or public-private partnerships — it will eventually have to be paid off.
“There is no such thing as a tax on someone else that has no effect on the economy of the area or unintended consequences,” she said. “It is all going to come from the public in one way or the other.”