Who's thinking big for the New York metropolitan region?
From Montauk Point to Monmouth, N.J., we're cutting budgets and cobbling together austerity programs. Fine. But where are the big ideas for the future that should accompany these tough measures?
This is the region that built the Erie Canal and opened up the interior of the country for trade. Do you know where the cobblestones that once paved so many New York City streets came from? They came here in the holds of empty trading ships in the 19th century. Those ships had left New York for Europe piled high with food and American manufactured goods that had come from the Midwest via the canal. The ships returned to our shores half empty from Europe, using as ballast cobblestones that wound up on our streets. In the 20th century we built a transportation network of subways, parkways, bridges, tunnels and airports. And we built the world's first containerport here in New York Harbor before a single containership had even been launched.
Now we need a big idea for a state and a region facing rough times. In the 21st century, some of the biggest challenges lie in the area of energy: How to end our dependence on foreign oil and replace it with cleaner, cheaper, domestic fuels; how to reduce demand and carbon emissions before we fry the planet; how to build a smart grid that won't waste energy but will help consumers use less of it; how to retrofit the millions of square feet of space in this region with more efficient heating, cooling and operating systems.
Without much fanfare, the region is becoming more integrated in terms of energy. A New Jersey utility just won a 10-year contract to run the Long Island Power Authority's operating systems, and a transformer in New Jersey can now connect the grid that serves New Jersey with the grid that serves New York. New York is moving toward on-bill financing to allow ratepayers to pay for efficient appliances or insulating their homes through their monthly utility bills.
In this region, we have public authorities that can raise capital for investments like this. But the states of New York and New Jersey frequently ask the Port Authority, for example, to squander its huge capital capacity in order to provide minor relief to the states' operating budgets -- like repaving roads in New Jersey whose maintenance was formerly borne, properly, in the New Jersey state transportation budget.
If the Port Authority were asked to work with regional utilities to build a smart grid, it could raise and invest $10 for every dollar it can throw into the vast maw of the state budgets -- and every one of those 10 dollars of capital would in turn leverage additional private investment. When the two states siphon off small amounts of money from their public authorities to provide temporary budget relief, they are in fact wasting an opportunity to generate much larger amounts of capital for growth and jobs.
We have the public institutions and investment firms to do all this and more. We have new leadership at the Port Authority. We have two governors who say they want to get their state economies growing again. And we have union pension funds and others ready to invest in long-term infrastructure if it is designed to offer reliable, attractive returns.
The generations that went before us knew how to build and invest, and they provided the region with facilities and institutions that led the nation. This is exactly the moment when we should once more be thinking big and investing for growth. Cuts and layoffs will not build a prosperous future. American families lost over $9 trillion in net worth when the bubble burst in 2008. What they need now in this region is a solid economic stake in a plan to grow and get more competitive. Where are the leaders with the big ideas that can offer that? Some region of the country is going to get its act together and build an extensive smart grid. It should be ours.
Peter Goldmark was executive director of the Port Authority from 1977 to 1985, and is a former budget director of New York State.