Members of the City Council should closely examine the 2003 Executive Capital Budget and Four-year Capital Plan. The New York Building Congress continues to have serious concerns about the City's capital planning process and especially the limited financial resources devoted to infrastructure maintenance and improvements. We urge the City Council to review the capital budget in detail, and to establish a more thorough and formal evaluation procedure.
Members of the Building Congress, who are leaders of the City's design, construction and real estate industry, know the infrastructure needs of New York City and frequently are involved with many aspects of capital programming and budgeting. In our collective judgement, the City's cannot take comfort in any aspect of its infrastructure program. Total commitments for 2003 of $7.2 billion may seem adequate in the face of the current budget realities; but actual spending will be considerably less and could be reduced even further by financial constraints.
In actual, as well as real dollars, the City's capital spending is being reduced considerably from the levels contained in the Adopted Budget of November 2001. This is occurring at a time when the City's capital needs are not being adequately addressed. Current levels of capital investment are insufficient to keep existing infrastructure in a state of good repair and do not come close to meeting the City's needs for future growth.
The City of New York must not view its capital program as just another expenditure category. If the capital program is reduced proportionally with the overall budget, New York faces a bleak future. The urgency of the moment must be to secure new sources of financing, particularly dedicated taxes and user fees such as those employed by the New York City Municipal Water Finance Authority, or perhaps through value-capture techniques. If there ever were a time to consider new financing strategies on a comprehensive basis, this is it.
Working with the Mayor, we urge the City Council to evaluate the current three-tier capital planning process. We recommend the following steps:
- Develop a more dynamic capital needs assessment. The current Ten-year Capital Strategy, Four-year Capital Plan and Annual Capital Budget process must move beyond an extrapolation of agency capital requests to dynamic planning and priority setting. The City Council should have a committee or sub-committee directly responsible for working on this process with the Office of Management and Budget and the Department of City Planning.
- Take a fresh look at capital financing. Innovative new approaches to infrastructure funding must be explored, perhaps drawing on successful techniques elsewhere. These include privatization and dedicated user charges, including variable pricing programs such as Port Authority trans - Hudson tolls and technological improvements like E-Z Pass.
- Build public support through an investment approach. Few New Yorkers know about the Capital Budget and the planning process for it. Through a more investment-oriented approach, the Mayor and Council can energize a lethargic process. Since responsibility for infrastructure is shared by City, State and Federal agencies, it is all the more important for the City to have a "consolidated capital improvements program," including all capital spending in the City. This should be prepared annually for the Mayor and Council and more fully reflect who builds New York and what is needed to do the job effectively.
In our judgement, the City Council should not accept the current approach to capital improvements, making only limited adjustments each year and attempting to patch together financing in the face of myriad obstacles. This practice inevitably leads to "managed decline," especially under the pressure of fiscal austerity. That will contribute to a downward spiral in which economic development and quality of life in the City of New York will be severely affected.
On behalf of the 1,500 members of the New York Building Congress, we call on the City Council to take the lead in appropriately balancing today's needs with those of the future. All of us can point to the benefits today of investments made by previous generations of New Yorkers. It is incumbent upon us to do likewise, because to do less will lead to a dim future for our children and grandchildren.
