Rebuilding New York

It is safe to say that the federal government has an interest in New York City remaining a global center of commerce, one with a mass transit system that can support a growing population, and a healthy infrastructure that does not endanger residents or discourage business, unlike the case of last summer's eruption of an 84-year-old steam pipe in Midtown Manhattan.

The extension of the no. 7 subway line to the Hudson Yards area is underway and when it's complete, its $2 billion price tag will have been paid entirely by the city of New York. Same goes for the $6 billion cost of building a third water tunnel that will serve New York City. Indeed, state and local governments foot most of the bill when it comes to infrastructure investment.

We need to find new sources of dedicated funds, particularly after the defeat of congestion pricing, to be able to repair our infrastructure well and to build more due to the city's growth, which is why we should pursue the present opportunity to change the way these critical projects are financed.

There is no doubt that a decaying infrastructure threatens our physical safety, as well as the edge of American businesses and jobs.

The U.S. spends an average of 2.5% of its total economic output on infrastructure whereas Ireland, India, and China spend from between 4.5% and 10% of theirs. It is probably not a coincidence that over the last four years the average individual annual economic growth of Ireland, India, and China far exceeded that of America. Since it has been estimated by the U.S. Department of Transportation that each $1 billion in infrastructure investment creates $6.1 billion in economic activity and 47,500 new jobs, a major commitment to financing infrastructure improvements would help our economy and even could pay for itself.

While local spending on infrastructure has risen nationally from $105 billion (in inflation-adjusted dollar terms) in 1956 to more than $312 billion in 2004, the federal government's share of the cost has remained relatively constant. It now is roughly $75 billion.

Federal funds have covered about one-third of the costs to rehabilitate the bridges on the East River and Harlem River. U.S. Congress, prodded by Rep. Carolyn Maloney and others, has stepped up with necessary funds by $1.3 billion to construct the Second Avenue Subway. But, state and local governments need more financing from the federal government. Neither New York nor the hundreds of cities and towns across the country, with their limited ability to raise funds through local taxes and their smaller budgets, can rebuild the nation's crumbling infrastructure without a greater infusion of federal support.

Mayor Bloomberg recognizes this, and has formed a coalition for federal infrastructure investment, along with Governors Schwarzenegger and Rendell. All three have challenged Washington to come forward with a "renewed commitment to fund America's infrastructure needs."

Some in Congress have begun to propose some bold solutions. Legislation now pending would create a National Infrastructure Development Corporation that would issue loans, provide guarantees, and assist state and local governments in financing infrastructure projects.

The federal guarantees would significantly lower financing costs and ultimately, the NIDC would be supported by private investment, much like the mortgage systems Fannie Mae and Ginnie Mae.

Councilmember Letitia James and I, co-chairs of the Council's Task Force on Infrastructure, introduced a local resolution calling upon Congress to pass the National Infrastructure Development Act before the next steam pipe explosion or bridge collapse.

When it comes to our infrastructure — and the jobs and economic activity it creates — we simply cannot afford to wait until it breaks down before we do something about it.

It won't come cheap, but the price would be much higher to rebuild New York's infrastructure or its status in the world.