New York Building Congress & Construction Industry Breakfast - New York, NY


04-10-08

REMARKS FOR
JAMES S. SIMPSON
ADMINISTRATOR
FEDERAL TRANSIT ADMINISTRATION

NEW YORK BUILDING CONGRESS & CONSTRUCTION INDUSTRY BREAKFAST

NEW YORK, NY
APRIL 10, 2008

Let’s talk about the elephant in the room.

On Monday, the State Assembly declared the congestion pricing plan supported by Governor Paterson, Majority Leader Bruno, Mayor Bloomberg, the City Council, the NYC Partnership, and many others, to be dead on arrival.

No doubt, state legislators believe they acted in their constituents’ best interests.
 
But I must be frank:

We at the DOT consider this decision to be very disappointing, as well as short-sighted.

Apparently some lawmakers view congestion pricing as an “elitist” approach to addressing a problem that has reached crisis proportions, and is only expected to get worse as time passes.

Well, there is nothing “elitist” about miles of gridlock at rush hour. . .

It affects virtually everyone – commuters, truck drivers, taxi drivers, buses, and even straphangers crammed onto the subway. . .

It affects the air we breathe. . .

It affects this region’s ability to provide the mobility that’s so vital to keeping New York a workable, livable community. . .

And it affects our productivity and our quality of life.

There’s no question that endless traffic congestion  --  and the pollution, wasted fuel, and wasted hours it causes  --  takes a little bite out of the Big Apple every day.
 
It is difficult to see how a plan that promises to deliver a reliable stream of revenue yielding long-term, dedicated funds to make the capital investments necessary to relieve traffic congestion. . .  improve transit options for future generations. . .and make transit more efficient through new technologies. . .  could be considered elitist.

The Brookings Institution recently reported that if we use congestion pricing in about 100 metro areas, we’ll raise three times what we raise through the Highway Trust Fund now, for ambitious transportation and transit projects.

Instead, as a result of the Assembly’s decision, New Yorkers have now forfeited nearly $500 million annually for mass transit improvements and $354 million in immediate federal funds.

Regrettably, New Yorkers will not have the chance, any time soon, to discover what people in Stockholm, Rome, London, and other European cities, already know:    Congestion pricing works! 

In all of these cities, congestion pricing models have actually reduced urban traffic by 20 percent or more, and increased transit usage.

Prague is about to join them. . .

And here in the U.S. . . .  Miami, Minneapolis, San Francisco, and Seattle are all using DOT funds to develop congestion pricing plans.

I’m reminded of something that the inventor Buckminster Fuller once said:

“You never change things by fighting the existing reality. To change something, build a new reality that makes the existing reality obsolete.” 
 
Unfortunately, I believe New York’s elected officials have missed an opportunity here to make a new reality for everyone who lives and works in the region.

So. . . Where does New York go from here?

The present-day challenges are not going away:

The residential and commercial building boom continues almost unabated in New York
. . . the city is projected to create hundreds of thousands of permanent new jobs in the next few years. . . and the city’s population continues to grow.

Meanwhile, the New York metro economy is losing $13 billion annually because of congested traffic. . .  And the MTA faces a significant shortfall in funds needed to fully execute its $30 billion capital plan.

Where’s the money going to come from to build and maintain a viable transportation infrastructure for New York’s future?

Our federal cash cow for transportation funding is the Highway Trust Fund. . . . Its revenues come largely from fuel taxes. . .
 
And as people drive more efficient vehicles, the fund is drying up. Next year, the fund’s deficit will exceed 3 billion dollars.

Meanwhile, commodity prices for construction materials are escalating. . .

As you well know, between 2003 and 2007, the price of steel mill products rose about 160%
. . . copper and brass, 270%. . .and aluminum and concrete, 125%. . . .

In addition, repairs and upgrades to aging bridges, roads, and tunnels are needed everywhere.
 
We’re not going to solve the traffic problem  or the infrastructure problem . . .  unless we fundamentally change the way we finance complex capital transportation projects  --  here in New York, and around the country.

An across-the-board fuel tax increase is not going to do the trick.

Over the past 25 years, highway funding has increased 100 percent  -- thanks in large part to fuel taxes  --  yet congestion has increased 300 percent.  
 
I can’t make it any plainer:

We’ve reached a tipping point. . . and relying on business-as-usual just isn’t going to cut it anymore. . . . We can’t expect 20th century solutions to solve 21st century problems.

It’s hard to imagine we’re going to be able to make any real progress without trying new things   --  like congestion pricing. . . high-speed electronic tolling. . .  and public-private partnerships that shift some of the costs and risks involved in designing, building, and operating transit systems to the private sector.

We’ve also got to think about transportation in completely new ways. . . This isn’t about highways versus subways. . . It isn’t about city versus suburbs. 

In fact, it isn’t about one mode versus another. . . It’s about people!

*        *      *        *

Now let’s switch gears and talk about what’s going right for New York. . .
 
The FTA is absolutely committed to helping the metro region transform its transportation infrastructure, by investing in some of the largest, most complex, and most important public works projects in the United States today.

Three projects, in particular, are going to deliver enormous benefits to the people of Greater New York and New Jersey.

Together, these three projects – East Side Access, Second Avenue Subway, and Access to the Region’s Core – represent more than a $19 billion investment in the region’s future.

And together, they will bring tens of thousands of new riders into the region’s transit network. That alone should help relieve congestion, to some extent.

The FTA is a major ground-floor investor in these projects -- providing roughly one third  --   $7 billion  --  for the initial phases of work.
Briefly. . .
# East Side Access
o FFGA completed: $2.6B Federal New Starts share
o Total project cost: $7.4B.   
o To be completed by 2014.
o 10% complete now.
 
# Second Avenue Subway

o FFGA Phase 1: Federal New Starts share: $1.3B
o Total project cost $4.9B.
o 125th St. to Financial District.
o Phase 1 by 2014
o 10% complete now

# THE ARC
o Est. total project cost: $7B+
o Trans-Hudson Express / Access to the Region’s Core

In addition to these mega-projects, we’re also investing more than $4.5 billion in Lower Manhattan’s post-9/11 future  --  including:
 
# A new South Ferry Terminal Station,
# A new Fulton Street Transit Center,
# WTC PATH terminal reconstruction, and
# Direct connections between PATH and some NY subway lines.

On top of all this, FTA invests over $2 billion a year in New York City  --  and another $1 billion a year in New Jersey  --  to help maintain existing transit systems.

All of these projects are tremendously important. . . but they pose significant challenges going forward. . .

First. . .only a limited number of firms have the capacity required to bid and construct these projects. That raises concerns for us about limited competition . . . which has implications for how jobs are priced. 

Second. . . we’re concerned about how difficult it is to create accurate cost and performance estimates for these complicated, multi-year transit projects,  given the continued escalation of commodity prices. . . .  The risk of under-estimating costs  --  and incurring additional debt obligations  --   is very real.

And third . . . We’re concerned  --  and the region’s business and political leadership should also be concerned  --  about the massive new transportation projects on the horizon  --  including the Tappan Zee bridge. . . a new Lower Manhattan rail link. . . and the second phase of the Second Avenue Subway.

Are there sufficient resources and capacity available to see these projects through?  

With all that said, these things must get done.

The region needs them  --  your children and grandchildren need them.

I’ve often said that transportation is the circulatory system of our economy. . .

We cannot afford to let it fail  --  and we should not settle for a system that is second-best behind other nations.

Now more than ever, we need leaders willing to make tough and courageous decisions about what it will really take to build and sustain a world-class transportation infrastructure, to keep our economy moving.

And we need a mindset in the community at large that is receptive to new ways of paying for  -- and using  -- our transportation networks.

We cannot afford to push this problem off onto future generations. . .
So let us all pledge that we’re going to work together  --  government, business, and communities  --  to find ways to make our transportation systems better. . . make them sustainable. . . and ensure that the region can effectively compete anywhere in the country – and around the globe.

Finally, if all this seems overwhelming, then remember that New York has been down this road before. . .

In the early 1900s, the city’s top railroad men, civil engineers, and politicians agonized over the best way for people to enter New York.

In 1900, 90 million people took ferries from New Jersey into New York City! They had traffic congestion even back then!

The brightest minds of the day got together and concluded that “easy access to Gotham” was vitally important. . . and about as challenging as building the Suez Canal.

But they were not daunted !

Thanks to their vision, planning, and hard work,  we’ve got rail tunnels running deep under the Hudson and East Rivers that we still use to this day. . .  with trains delivering countless travelers into Penn Station. . .  which we now take for granted as a transportation hub for the entire East Coast.

That was a game-changing decision for New York  --  and it’s precisely the kind of bold, creative, forward-looking thinking we need today.

Thank you.