Makes Case For More Investments In Infrastructure and Economic Development
Governor Cuomo: "Building public confidence in government's capacity to actually complete these big projects is essential if we are to have the political will to move forward on an ambitious building agenda. We want the federal government to know that the people of this nation want this kind of leadership and participation. That means the people of this nation need to know that if we embark on this venture, we can get it done and we will get it done, and it will happen efficiently and effectively."
Earlier today, Governor Andrew M. Cuomo urged states not to rely on federal government for critical infrastructure and economic development and lead at the state level at the 2020 National Governors Association Winter Meeting in Washington, D.C.
AUDIO of the event is available here.
PHOTOS of the event will be available on the Governor's Flickr page.
A rush transcript of the Governor's remarks is available below:
Thank you. Good afternoon. Before I get started, let's give a great round of applause to our great chairman of the NGA, Governor Hogan. Governor Hogan we all thank you for your professionalism, your collegiality, your cooperation and your leadership. Another round of applause for Governor Hogan please.
It's my pleasure to be here today to open the second plenary session and let me tie the discussion of this session into the last one on global and domestic infrastructure. To begin with, if we had a magic wand we should wave it and eliminate the word infrastructure from the vocabulary. Infrastructure is just not an attractive word. Let's be honest. Maybe if we come up with a more attractive word we can actually entice the federal government to re-enter the field. Sounds like a task for a new NGA subcommittee.
But the simple truth is that we do need the federal government to be a full partner if we're going to resolve this crisis - and it is a crisis. State's simply don't have the financial luxury of filling the void no matter how aggressive, no matter how creative states are. This is not a partisan complaint because the past five presidents, Democrats and Republicans, all proclaimed infrastructure development as a national priority and very little progress has been made.
Our national infrastructure deficit is estimated to be $1.5 trillion by 2025. European counties on average spend about 5 percent of their GDP on infrastructure. Our federal government spends less than half that. 1977, Washington paid 38 percent of the cost of building our nation's infrastructure. Today that share is down to 25 percent. And the ever increasing balance falls to state and local government.
In the meantime, states do what we can and states do what we must. We know that what we build, what we modernize is the legacy that we leave behind. Given a states limited resources, the state development strategy must be targeted and have a direct connection to a return on the state's investment. They must be catalytic to an economic development plan. Either the project itself must be essentially self-financing or the project must be an integral part of a targeted economic development strategy that will pay dividends.
In New York we analyze our development projects in two tiers: First, necessary and essential modernization of our transportation systems. And second regional economic development and investments. First, global competition demands a modern transportation network. Period. Either grow or be left behind.
In 2014, then-Vice President Joe Biden said - basic quote - if you landed in New York at LaGuardia Airport and you were blindfolded, you would think that you landed in a third-world country. Dramatic quote. Now, all the New York politicians criticized the Vice President for slandering a New York airport. We can be a little defensive as a group in New York. But I actually went the other way. And I said, no the Vice President was right. Let's recognize the truth. My state, every state needs a modern airport to enter the global economic competition. Look at what they're building around the world. And then look at what we're doing here in the great United States of America.
If we want to keep pace with the rest of the world, we have to update our transportation network. And if the federal government won't do it, the states must do it as a basic matter of economic survival. Now, states getting into this business brings significant financial challenges for a state, as well as a highly specialized expertise.
States don't have the funds to do it without leveraging public-private sector partnerships, and that is the discussion we had on P-3s, but it's truly the only vehicle to get the amount of funding the state would need to make a real difference. On airports for example, what that meant for us in New York was the private leasing of the terminal space at airports at the beginning of our construction project to pay the cost of the construction.
We're building a new LaGuardia Airport, which is going to be the first new airport in the United States since the Denver Airport opened in 1995. It is an $8 billion project with about one-third coming from government and two-thirds being paid from private sources. To actually build it, we have adopted the design-build method - the state will masterplan a project, but we then bid out the design and construction to a private company with a set completion date, an incentive for early delivery and a penalty for late delivery. The old adage, know what you don't know, and government does not know how to build.
New York recently completed the largest infrastructure project in the United States, a bridge across the Hudson River with a price tag of $4 billion - it was completed on time after many sleepless nights and on budget. It took about four years.
Building public confidence in government's capacity to actually complete these big projects is essential if we are to have the political will to move forward on an ambitious building agenda. We want the federal government to know that the people of this nation want this kind of leadership and participation. That means the people of this nation need to know that if we embark on this venture, we can get it done and we will get it done, and it will happen efficiently and effectively.
We are now in the middle of the largest building program in New York State's history - $275 billion in infrastructure. We're rebuilding our airports, LaGuardia, JFK, our regional airports in upstate New York, train stations, mass transit, roads, bridges - statewide. All projects incorporate more resiliency. We're ensuring 100 percent statewide broadband and cell service as basic economic necessities to attract business to the rural parts of our state, but these development projects are basically essential for economic survival, and if the federal government will not step up and fund them, then the state must.
At the same time we have a second level of construction and investment which are basically regional development programs where we identify the economic potential within a discrete region of the state that needs help, we invest in those projects necessary to bring that economy up in that region, and those projects are tailored specifically to those regions.
For example, northern New York, we have the Adirondacks. Their economy is basically based on tourism and outdoor recreation. So there we're building new lifts, new lodges, new attractions, new roads, new hotels.
Long Island is a different region of the state and we are building an economy based on our concentration of academic institutions and biotech development. We're trying to steal a page from North Carolina and have our own research triangle on Long Island, and we are financing laboratories, and schools and new rail transportation.
Syracuse, in the central part of the state, we are developing a cluster economy on unmanned vehicles and drones and have just built a 50-mile drone testing area, one of the largest in the country.
But these regional economic development plans are originated by business leaders in the region, working with local elected officials, and the state comes in to provide the investment capital. So far we have spent about $25 billion on these regional economic development projects - $18 billion from the private sector, $7 billion from the state.
But the point is, again, regional development that grows the economy because we need the economy to grow to pay for the capital investment that the State made and further those economic advancements.
In closing, my last point is that while we all hope for an active federal partner, the reality is after such a long delay I think the best course forward is for the states to hope for the best and plan for the worst. If the federal government decides to embark on an aggressive building program, which we all will advocate for, they're going to look to the states for projects and they will look for projects that are ready to go, right, they're going to turn to the states and ask for shovel-ready projects. We saw this in 2008 when the Federal Government funded a stimulus program and went out to the states and said, "Give us your shovel-ready projects." Now it's very hard to have a shovel-ready project before you have the financing, but for states we're doing the best that we can to have those projects ready once the federal funding becomes available.
We are investing a record amount in building so people often ask me in the state, "Is this economically prudent?" I say, "Look, we must recognize the economic reality. We're all in a competition for the same businesses and the same jobs, and the locations that better serve the private markets will win, whether they are in China or Europe or Utah or Texas or New York.
To me the question is, can the state not afford to grow its infrastructure and its economic capacity. Second, in New York, we have never forgotten what drove our original success. Yes, we have New York City, which is on the sea coast and provides a great natural harbor, but that did not exclusively drive our economic growth.
1817, the nation was looking for a way to open up the West - at that time, the "West" was basically west of the Mississippi. Thomas Jefferson and George Washington were planning a series of canals from the Potomac to access the West.
In New York Governor Dewitt Clinton, no relationship to Bill Clinton, said he had a plan. His plan was that ships could come into New York Harbor, go up the Hudson River, make a left at Albany, and come out across the State at Buffalo, which is on the Great Lakes, and then from the Great Lakes you can take the river down and you'd be in the quote-unquote West.
Skeptics had one question - when the ships make the left at Albany, how do they get out at Buffalo - that's 400 miles, all land-locked. Governor Dewitt Clinton said, "No problem. I will build a canal that goes across the state and we will pull the barges with horses and mules." 1817. Four hundred mile canal.
The people of the State thought it was so crazy, they tried to impeach him on the grounds of insanity. But he did it - seven years, on time and on budget, and he built the Erie Canal. And that really was the infrastructure that made New York a commercial engine.
But that is the innovation, daring, ambition and spirit that built this nation. And it still lives in every Governor and in every state.
As Sarah Rose said on an earlier panel, the line from a Kevin Costner movie was right, "If you build it, they will come."
The line is right, but the name of the movie was wrong. It is not a Field of Dreams. This is a Country of Dreams, because we are a nation of dreamers - with the skill, tenacity and courage to actually make it a reality, and we did it. And we can do it again - if we just have the wisdom to work together.