DMI Blog

John Petro

Cuomo Must Embrace NY’s Greatest Job Creation Engine: Mass Transit

While presenting his budget to Albany lawmakers last month, Governor Andrew Cuomo talked about the importance of creating jobs throughout the state. “We need jobs and we need revenue. Long-term, it's jobs, jobs, jobs." It’s a shame, then, that the governor is ignoring one of the state’s most powerful job-creation engines: mass transit.

Cuomo’s job creation strategy comes straight from the pages of the conservative playbook. Cut spending, slash government jobs, and cut taxes in order to become more “business friendly.” This approach overlooks the role of smart, targeted public investments to generate economic growth and jobs.

For an inspiring example, just look at New York City’s $2 billion investment in a subway extension to Manhattan’s far west side. Not only will the project employ thousands of construction workers, but the city’s investment is expected to generate $15 billion in private investment and the country’s fourth largest business district. That is an impressive return indeed.

Given the amazing power of transit investments to create jobs and attract private capital, it’s anyone's guess why the governor hasn’t begun to address a fast-approaching $10 billion gap in the MTA’s capital budget. The damage that the budget gap, if left unfilled, would inflict on job creation is difficult to overstate. The most recent capital program was estimated to create 38,500 jobs a year for nine years. These jobs are found in communities all across the state, from air conditioning manufacturers in Yorkville, sheet metal in Utica, propulsion systems from Johnson City, door systems in Plattsburgh, radio antennae from Tonowanda, and the list goes on.

But Cuomo, who insists he is focused on job creation, still has not met or spoken with MTA president Jay Walder about the impending funding gap. Cuomo may be busy with budget negotiations, but funding for the capital program is due to run out at the end of the year. At this time there are no credible proposals to fund the transit investments necessary to keep the system from falling apart, never mind a plan to create a transit system that will be competitive in the 21st Century.

With no plan to fill the $10 billion gap, the state’s contractors and construction workers are worried. The New York Building Congress released data showing that 18,000 construction jobs will fail to materialize if the MTA capital program is not fully funded. That would mean ten percent fewer construction jobs in 2012 than what is currently projected.

Instead of calling for job-creating investments, Cuomo is fixated on cutting spending and has an indefensible desire to cut taxes for the state’s high-income earners. This is a costly choice. It would reduce state revenue by approximately $5 billion a year, or half of the gap in the job-creating capital program. In fact, the governor’s budget would divert $100 million from the MTA, which will likely result in the loss of more jobs for transit workers and less money for investment.

There is little money to go around these days, but Cuomo must work hard to find a funding solution. There are some innovative ideas that should be explored, such as the role of private capital in funding new transit projects. In Florida, companies like Siemens were chomping at the bit to get a chance to invest in high speed rail (until Florida’s governor Rick Scott foolishly torpedoed that plan, at least). Cuomo has spoken of creating a state infrastructure bank, but plans for the bank don’t go much further than that. Cuomo has also resisted the idea of congestion pricing, which could create a new revenue stream for transit investments while cutting traffic delay in the city.

But the first step should be preserving what we already have, and that includes the payroll mobility tax. The tax, which passed in 2009 and generates $1.5 billion for transit each year, is under fire by short-sighted lawmakers from suburban districts. They claim that the tax kills jobs, but they’ve failed to consider that the alternative would destroy even more jobs throughout the state.

Meanwhile, New York City’s biggest competitors aren’t resting on their laurels. Los Angeles is in the middle of an aggressive plan to expand mass transit. London is investing billions in new commuter rail capacity, and Chinese cities are building hundreds of miles of new subways. These investments will pay even larger dividends as energy prices continue to grow.

Today, New Yorkers cope with a third-world bus system, crumbling stations, and antiquated track signals. New research shows that new commuting patterns—between boroughs and from the city into the suburbs—have not been followed by new transit lines, cutting workers off from jobs. Decades of disinvestment on the part of Albany lawmakers have got us where we are today.

Governor Cuomo must realize that the state’s transit systems are an asset, not a liability. Investments in transit can lead economic growth and development and create tens of thousands of jobs. But the question remains: will Cuomo deviate from his conservative talking points long enough to make these critical investments?

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Posted at 4:48 PM, Mar 04, 2011 in Urban Affairs
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