Friday, May 16, 2008

The "state interest" in Upstate

Testimony

Presented to the New York State Assembly Committee on Local Government

Hon. William B. "Sam" Hoyt III, Chairman

Buffalo and Erie County Public Library

May 16, 2008

Bruce L. Fisher, Esq.[1]





Mr. Chairman,


Thank you for this opportunity to ask that we seize the day for consolidation.


You, Mr. Chairman, have been a staunch and creative stalwart in advancing the cause of smart growth in this State, and I want to commend you for your leadership as well in the movement to re-shape our governance.


I also want to commend Commission Chairman Stan Lundine for his leadership and his persistence in these matters. I first met the former mayor, congressman and lieutenant governor more than a decade ago when he was the quiet force behind the first Chautauqua Conference on regionalism. Stan Lundine was calm and unshakeable as he stood with those of us who advocate a historic reform in the way local government is organized in this state.


And I also want to commend our new Governor for embracing the Commission’s study. I noted with particular interest that Governor Patterson seized the day to make the connection between the unsustainable condition of local government with the terrible fiscal crisis that looms over the entire state.


He was right to make the connection. There's been an economic crisis in Upstate New York for a generation. Make that two generations. But the crisis of depopulation, capital flight, collapsing small cities and relentless suburban sprawl in the 53 counties outside the New York Metro area has been masked by massive State spending of tax revenues generated within the 9-county Metro area.


New York State is subsidizing dysfunction. It’s not only a matter of efficiency, but as my good friend David Rusk says, it’s a matter of effectiveness. Fractured local governance in Upstate New York is fiscally inefficient, but it’s also economically ineffective.


Let’s focus on the issue of fiscal efficiency. Budget staff for New York City did a report in 2004, co-authored by the independent Rochester think-tank CGR. That study estimates that an economically healthy Downstate subsidizes economically-challenged Upstate by over $11 billion a year.[2]


In accepting the Lundine commission report, Governor Patterson announced that the State of New York will be at least $5 to $7 billion short in the current fiscal year, and could be more than $25 billion in the red over the next four years.


Upstate New York is on the dole, and will remain on the dole, because despite some positive economic fundamentals – especially a tremendous wealth of colleges and universities, including three of the four SUNY research centers – Upstate New York has never rationalized, regionalized or consolidated its old government structures.


As a result, New York City taxpayers foot the bill for over 4,500 units of government for a population that is smaller than New York City's, where there is only one unit of government – or two, if you count the Metropolitan Transit Authority.


Many scholars and many citizens think there's a connection between the economic crisis of Upstate and the antique jalopy of its governance structure. Many voices have urged Buffalo, Rochester, Syracuse, Albany, Schenectady, Binghamton and other urban centers to consolidate with their counties, and to bring the town governments in with them into regional governance structures – such as New York has had since 1896.


Political resistance has been easy because Albany foots the bill for local government. "Home Rule" has become the excuse for inefficiency, fracturing, and a destructive spiral of sprawl without growth.


And Albany has been footing the bill with the New York metro's money.


I am here to suggest that Albany should no longer foot the bill. I am also here to embrace the Lundine Commission’s report, and to commend to Governor Patterson’ specific attention the $1.5 to $2 billion in general aid that goes from his budget to the budgets of local governments. It is time for State government to use the Lundine Commission report as the tool to fix what’s broken.


During my 8 years as deputy county executive, I worked hard at the County level to do what can really only be achieved by State government.


For example, in Erie County, we worked collaboratively with many police agencies and emergency-services first-responders to construct a new regional public safety system. We made great progress. We built the award-winning Public Safety Campus. We built a brand-new state-of-the-art DNA lab, which has been so instrumental in supporting our law-enforcement agencies as they’ve solved the case of the Bike Path Rapist and other cold cases.


We also built a state-of-the-art emergency dispatch center, where today, all – let me say that again, ALL – of the cellular and wireless calls to 911 are received. The regional government, known as the County government, functioned in this case the way it should – as the regional resource, with the best technology, serving the regional network.


But the fact is, we still don’t have unified regional management of basic services like emergency 911 dispatch on a county-wide basis. Erie County still has 26 Public Safety Answering Points or PSAPs for less than one million people – even while New York City has one PSAP for almost 8 million people. Los Angeles has one PSAP for almost 9 million people. Erie County, with only 925,000 people, has 26.


Why?


Because Albany allows it to remain that way. Albany tolerates this duplication and fracturing in the name of Home Rule. But Albany also helps foot the bill for micro-local management.

The Lundine Commission reports that everything from Industrial Development Agencies to sewer districts to town highway departments is managed micro-locally.


But tucked away in the appendix to the Commission report Governor Patterson just received is a little gem of legal analysis that could help him deal with his $5 billion fiscal crisis and at the same time start to help fix Upstate as well.


In the section on Home Rule, the lawyers point out that "[t]here is no limit on the State's power to act by general laws." The State can act on matters of "state concern."


I cannot think of a more urgent state concern than the poverty and state expense of maintaining thousands of unnecessary units of government in sprawled-out upstate urban regions. The terrible price in lost human potential and lost human capital that we in Upstate New York are continuing to pay is a legitimate “state concern.”


The inefficient, sprawl-inducing, tax-dollar-eating proliferation of little units of government in Upstate New York has produced a matter of legitimate "state concern."


A dying Upstate should be a New York City taxpayer concern, too.


The Lundine Commission report says that its reforms could save about a billion dollars a year. If the State deficit this year is $5 billion, getting hold of $1 billion of costs isn't a cure, but it's a lot more than a bandage.


But state leadership on regionalizing Upstate's governance holds greater promise. Regionalized governance – where the city, the suburbs and the county are all merged – actually does work.

Mr. Chairman, regionalized governance – including strong regional planning using the county rather than the town as the regional unit – is a practice that has rescued old industrial cities like Hamilton, Ontario. The approach has also worked for Indianapolis, Nashville, Jacksonville and, of course, New York City itself. The unity achieved by governance change has made for economic resilience – and for lower cost-per-unit services, too.


Perhaps it would be easier for all of us to understand if we saw it first-hand. Now I would love for all of us to take a field trip to New York City where five counties were merged into one great city more than a hundred years ago. That’s the kind of regionalism I like and that the world has endorsed.


But there’s a closer, more approachable example just an hour up the road from us here in Buffalo. Mr. Chairman, I hope that we can take a ride together to visit our friends in Hamilton, Ontario, to see first-hand how a regionalized city-county-town merger actually works. The legislation I drafted some years ago – legislation that proposed a two-stage merger to get us from three-tier government to one-tier government – was based entirely on the experience of Hamilton, Ontario.


They had something like the Lundine Commission in Ontario a decade ago. They called it the Who Does What Commission. The Province of Ontario said, We have a fiscal crisis. We have a sprawl crisis. The province then said, Hamilton, you have 60 days to figure out who does what – which level of government does which kind of service. And then the province said, propose a structure that does it better, smarter and cheaper. So Hamilton first merged the city and the county, in phase one. And in phase two, they merged the towns with the city and the county, and now they have the Regional City of Hamilton.


Mr. Chairman, I see the Lundine Commission report as a historic opportunity to get us started. It’s like a Who Does What Commission.


So I conclude by saying that our real opportunity is at hand. We have a draft of a roadmap to change with the Lundine Commission report. We have an understanding that changing local governance and changing local land-use planning go hand in hand.


We have a Governor in David Patterson who understands and was correct to put the reform conversation in the same sentence as the fiscal crisis conversation.


So let's not waste a good crisis. Let’s take the next step, the logical step, the fiscally prudent step, and make the crisis of upstate New York’s urban regions into a matter of state interest as defined by law, and use the Lundine Commission report to get us to the future.



[1] Former deputy Erie County executive 2000-2007

Former deputy Buffalo comptroller 1996-1999

[2] CGR, Balance of Revenue & Expenditure Among NYS Regions. http://www.cgr.org/reports/04_R-1400_NYBalanceOfPayments.pdf

Thursday, May 15, 2008

The Oil Crossroads: Gold for highways, pennies for public transportation


Gold for highways, pennies for public transportation

Senator John McCain, who would like to suspend the federal gas tax in a way that economists have condemned as a handout to the oil companies, is from a state that will soon inaugurate a brand-new light-rail system for the sprawling metropolis of Phoenix.

McCain is courting independent voters, as he did the other day in his Oregon speech about global warming.

In Brian Fagan’s new book The Great Warming: Climate Change and the Rise and Fall of Civilizations (Bloomsbury Press 2008), about a previous era of global warming that happened about a thousand years ago, the author collates a lot of science that suggests that the coming drought in the Phoenix area—like the century-long drought that ended the Anasazi culture and that destroyed human habitation in what is now southern California—will have been made much, much worse because of all the carbon dioxide pollution produced by burning fossil fuels.

Catastrophic drought, Fagan writes, is coming to big sections of the world. Historically, it happened in the Southwest, the Southeast (where Atlanta is already suffering from water shortages this year), and in the Hudson Valley.

The way those highly populated regions use oil may have to change radically because of the way the water flows. Phoenix’s new light-rail rapid transit system, coming this fall, will help.

But public transportation won’t change much.

Harvard economist Richard Glaeser (the one who wrote that Buffalo and Detroit are economically doomed and should get no new federal money) co-authored a scholarly article entitled “Why do the poor live in cities?” His conclusion: “The urbanization of poverty comes mainly from better access to public transportation in central cities.”

A world shaped by oil

Today, public transportation is where the poverty is. Public transportation in America is racialized.

Public transportation is energy-efficient, cost-effective, and—except in Boston, New York, Washington, Chicago, Seattle, Portland, and San Francisco—used mainly by people who cannot afford their own cars. Everywhere else, public transportation equals the city bus.

UCLA’s Matthew Kahn recently concluded that there is huge imbalance in the federal subsidy for highways that far exceeds federal subsidy for public transportation. Highways get $40 billion a year of federal money, above and beyond the federal gas tax and various user fees. Rail has had $25 billion over the past 30 years.

Why? Cheap oil, and time. “In order for a new rail line to draw a significant number of people out of cars,” says Kahn, “it has to be fast enough to beat driving rush hour and extend far enough into the suburbs to reach a significant number of people.”

Fifty years of sprawl have spread the people all over the map—except poor people, who are concentrated in central cities.

Transit systems don’t serve that many people. They take a long, long time to build. Transit systems are extremely expensive.

But calculations change. Objective conditions drive economics. It’s time to ask the federal government to start connecting the dots.

Climate scientists say that population centers in Southern California, the Southwest, and the Southeast will be experiencing increasing stress due to drought in years to come, because whether you believe in anthropogenic (human-caused) global warming or in cyclical, happens-every-millennium global warming, we’re going to have global warming. Drought makes it hard to live in drought-stricken areas.

Here in the Great Lakes region, where we have a large water supply and comparatively little public transportation infrastructure, water gives the region a larger carrying capacity for more population.

Meanwhile, Wall Street investment firm Goldman Sachs Inc. projects that oil could cost $200 a barrel by next year, which means $5-a-gallon gas. The average two-car household will spend $2,000 to $6,000 more per household for the current commute, which will make the household fuel cost rise to near $10,000 a year. Goldman also says that the global pressures that drive up the price—mainly, expanding demand in China and India—will not go away, so ever-more expensive gas could be the norm. (They pay over $7 a gallon in Norway today.)

Expensive oil, global warming, drought…should those factors combine in the minds of Great Lakes leaders, and in the minds of federal officials, such that some level of government starts planning to build rapid transit systems in the Great Lakes cities?

The Census data say that, except for Detroit (the home of the worst highway planning in America) and Chicago (where there’s excellent public transportation), commute times are short, so there’s no immediate crisis that would command a crash program in public transit.

But by 2020 or 2030, the long-term drought that has already been underway for several years in Atlanta, Charlotte, Phoenix, and Los Angeles will be in its second or third decade.

How much will gasoline cost by then?

Oil companies drive American policy

Every day, thousands of Congressional staffers use the Metro stop that is directly behind the Longworth House Office Building. Every day this spring, the many Congressional aides who use the quiet, clean Metro subway system are exposed to the oil industry’s lobbying, in the form of a pie-chart display that is both painted on the floor of the station and posted on the walls:

“Look who owns America’s oil industry,” the posters say. The pie-chart explains that 14 percent is owned by IRAs, 23 percent by individual investors, 27 percent by pension funds, 29.5 percent by mutual funds and “other firms,” five percent by institutional investors, and 1.5 percent by corporate management.

“Millions of Americans, most of them middle class, have a stake in America’s oil companies. Chances are you’re one of them.”

It’s blatant. It’s also much less expensive than the recently begun $100 million television advertising campaign.

The oil companies are delighted to cite economists like Kahn and Glaeser. Kahn reports that, between 1970 and 2000, the federal government invested over $25 billion in new rail transit lines, but that during that time, “the fraction of metropolitan area workers commuting using public transit has declined from 12 percent in 1970 to 6 percent in 2000.”

But there’s another side to the story.

There is evidence now that affluent, educated young people, and the companies that employ them, are starting to break the connection between poverty and public transportation.

In a 2007 study, UCLA’s Kahn showed that, in the 14 cities that got the big federal bucks for rail systems, real estate gets more valuable where folks can walk to the train. The appreciation in urban real-estate values that is called “gentrification,” it seems, comes as a consequence of new public transportation if and where those systems connect to walkers, much more so than when they are park-and-ride systems.

The average transit pass costs about $750 per person per year. A four-person household with transit passes will spend $3,000 a year, compared to gas, oil, repair, insurance, and car payments that today cost on average $10,000 a year per car—a cost that is going to go up. And up.

But there’s a problem with this calculation.

Until the federal government invests in making transit reach father into the far-flung suburbs, white folks will keep driving their cars—because they’ll have no real alternative. In most suburbs, you simply cannot get to a store or a school or a doctor or to a friend except in a car.

Urban re-development and gentrification could well be the economic stimuli for braking further sprawl.

But neither $5-a-gallon gas, nor even $7-a-gallon gas, can structurally change the layout of American urban regions so long as the federal subsidy for highways so completely overmatches the federal plan, support and commitment to public transportation.

Maybe global warming will drive the next American wave of population growth to occur up in the old, cold North. But growth will only come to a city near you if the federal government is led by somebody who connects the climate-change dots with the oil dots and the public-transportation dots.

Bruce Fisher has been a campaign press secretary, a speechwriter and a consultant for Democrats including the late Paul Simon, Joseph Biden, Carol Mosely Braun and Bill Clinton. He left the campaign trail to raise kids in Buffalo and served eight years as deputy county executive for Erie County.