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Gotham Gazette

The Place for New York Policy and politics

Citizens Union

You're on an older version of the site, please click here to view the current site


From Gas Guzzling Cars to Clean Buses

Gotham Gazette

The Place for New York Policy and politics

Citizens Union
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For More on Helping New York's Economy

Paying Attention to Cities By Jonathan Bowles
After years of federal policies neglecting urban areas, Barack Obama has sent some encouraging signals that he understands their importance. Certainly, New York could use a helping hand. The director of the Center for an Urban Future lays out some ideas for what the president could do to aid New York.

An $825 Billion First Step By James Parrott
The stimulus package proposed by Congress is key to halting the economy's downward spiral but it will not solve all our problems. Economist James Parrott of the Fiscal Policy Institute looks at what the package would do -- and what more needs to be done.

Using the Crisis to Prevent the Next One By J. Mijin Cha
The current turmoil can help us reduce our dependence on Wall Street and create good "green collar" jobs that help fuel a resurgence of the middle class. The director of campaign research at the Urban Agenda explains how.

Infrastructure Investments that Make Sense By Carter Craft
As big as the stimulus package may be, the country has to invest the money wisely. An urban planner offers some novel ideas for New York projects -- from recycling grease to ferries for freight.

Previous Articles
A Federal Stimulus for City Parks By Anne Schwartz
Advocates hope that President Obama and Congress will recognize that funding parks would not only improve the quality of life and the environment but also spur investment and raise real estate values.

Stimulus Money: The Downturn's Silver Lining? By Graham Beck
The stimulus package could offer more federal funds for transportation projects. The MTA is making its list, but there are sure to be lots of restrictions -- and competition.

"What is good for GM is good for the country!" -- once the battle cry of U.S. capitalism is now a mumbled query that sounds something like, "What is good for the U.S.? What is good for GM?"

As America's auto manufacturers deal with the largest financial crisis in their history, officials are focusing on how to keep the industry afloat regardless of brand. Hence, the catchphrase, for some, now goes: "What is good for the automotive industry is good for America -- with or without GM."

America needs large scale investment by the federal government that will promote sustained development of public services and private enterprises. Simply lending funds to distressed companies, such as General Motors and Chrysler, to keep them operating will not stimulate economic growth. An innovative program of vouchers to promote mass transit, especially the manufacturing of clean and green buses, would spur investment while saving jobs and helping the environment.

The Recession and Transit

Deteriorating economic conditions in the region have put New York's Metropolitan Transportation Authority in a financial bind. A December report on MTA financing by the Ravitch Commission, named for its chairman, Richard Ravitch, said the situation has become "calamitous."

The MTA faces significant gaps -- of a billion or more -- in its operating budgets for each of the next four years.

By law, the authority's budget must be balanced, meaning it has proposed substantial fare increases, major service reductions, lowering administrative costs, personnel cuts, longer maintenance cycles and an interagency loan.

Uncertainty about the MTA's funding creates uncertainty among the suppliers of the equipment the authority buys. Uncertainty about the capital projects the MTA can fund compounds the already severe uncertainty that investors have. This is exactly what the U.S. economy does not need right now.

Keep in mind that New York's population of 8.2 million is expected to grow to 9.2 million by the year 2034. The Ravitch report, while not advocating specific capital projects, argues for an expanded bus system based on Bus Rapid Transit, which attempts to move passengers more quickly and comfortably through a system of buses-only lanes and other improvements. "Expanding the bus network is the only realistic approach," the commission said.

Clean buses that operate in a rapid transit mode will be the key to the commercial viability of the New York region. The problem is finding the money to purchase them.

Bus Benefits

To help surmount this obstacle, I suggest the federal government issue $25 billion of Clean Fuel Vouchers that municipal and state authorities could use to buy cleanly powered buses over the next five years.

The $25 billion figure is a quick calculation of what it would cost to replace the 64,350 gasoline powered transit buses on the road at the end of 2006 with alternative fuel buses, with $500,000 as the cost of each new bus. Twenty-five billion dollars over five years ($5 billion per year) would be a significant increase in the slightly more than $1 billion nationwide the Federal Transit Administration has currently budgeted for capital spending on transit buses.

It also would build on an existing commitment by federal, state and municipal governments. Between 1995 and 2006, the number of transit buses using alternative fuels increased from 2.8 percent to 16 percent. In its 2009 budget, the Federal Transit Administration said it is "striving to increase by 2 percent per year the deployment of energy efficient and low emission technology vehicles in the transit industry." This kind of fiscal stimulus package would significantly ramp up the 2 percent growth in clean fuel buses on the road.

As of 2007, about 21 percent of transit buses operating in New York City were powered by either compressed natural gas or diesel/electric. The MTA's proposed capital program calls for the purchase of 2,492 new buses. Of those, 1,544 will use clean fuel technology.

A commitment to these buses would create investment opportunities for manufacturers and jobs for the unemployed.

Nationally, the voucher program would employ autoworkers and activate plants now idled by a precipitous drop in car and truck sales. It would spur banks to loan money for mass transit production. Replacing diesel powered buses with hybrid/electric ones or vehicles fueled by compressed natural gas also would reduce carbon monoxide and nitrogen oxide emissions.

The Voucher Market

This is how the voucher plan would work: Transit authorities would receive vouchers they could use to buy clean fuel transit buses within five years. Once a transit authority places the order for a bus, the voucher would be pledged to the bus manufacturer. The bus manufacturer could use the vouchers as very high quality collateral to raise working capital during the production stages.

The vouchers could also be bought and sold. If the MTA, for example, decided it valued operating income over an expansion of its clean fuel bus fleet, it could sell some or all of its vouchers. Because the vouchers would be federal obligations, there is no risk they wouldn't be honored.

Once sold, the voucher could be used for any hybrid/electric, electric or fuel cell vehicle, not only transit buses. Those buying the vouchers might be other municipalities, rental car companies, taxi fleet operators, trucking companies, equipment-leasing companies, and school bus operators. The secondary market for vouchers would help those governments that cannot effectively use their vouchers. It also would broaden the fiscal stimulus while keeping it focused on demand for automotive products.

Good for General Motors

The vouchers will create a flow of private capital to the sector of the automotive industry that designs, builds and maintains green machines. This could help General Motors.

Why does that matter? The survival of many firms is linked to GM's ability to buy and pay for the goods and services they produce. GM, Ford and Chrysler currently owe about $60 billion to their suppliers. Not only must these receivables be secure, but suppliers must be able to expect timely payment for future sales to the auto companies. Trying to stimulate the U.S. economy while the core of our manufacturing base is in financial distress would be like bailing out a leaking ship with a Dixie cup.

GM has valuable technologies, products, designs, processes and patents along with engineering talent and a skilled labor force. Unfortunately, all of this is trapped in an ossified enterprise. For the company to survive, these assets must be redeployed.

When an earthquake destroys cities and villages, governments around the world mobilize resources to save lives and rebuild wells, schools and hospitals. A financial quake has struck and now is the time for a massive financial lift. To emerge from this worsening global recession each of the world's economically powerful countries must make a commitment to invest significant public funds in sustainable development.

A massive investment in clean fuel mass transit would be consistent with stimulating the U.S. economy, improving air quality, lowering urban road congestion, increasing opportunities for mobility in and outside of the cites, and making U.S. cities the premier showcase for green urban transit. Vouchers can help accomplish that. At the same time, they will increase demand in a key sector of our economy.

Charles A Stone is a professor of finance at Brooklyn College.

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Gotham Gazette

The Place for New York Policy and politics

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

The Race For Speaker

By Mark Berkey-Gerard

After months of campaigning and four separate Election Days, even some who live and breathe New York politics have had enough of campaign 2001.

"For us political junkies this has been a long run," said Harlem Councilmember Bill Perkins the day after the general election. "In the end, I didn't even care who won."

But Perkins, who easily won reelection with 86 percent of the vote, is nevertheless running yet again. This time, the race is for the Speaker of theCity Council.

He is one of as many as eight candidates looking to become what is said to be the second most powerful public official in New York City. Next to the mayor, the speaker is largely responsible for what laws get passed, which city programs get cut or expanded, when taxes are raised or lowered.

And the new speaker will lead the city council at a time when the two most important roles of the council -- oversight of the budget and of land use -- are more critical than ever, as the city faces unprecedented budget deficits, a slowing economy, and the challenge of rebuilding lower Manhattan.

The new speaker will be the main person who will work with -- and confront --the new mayor, Michael Bloomberg, who has no previous political experience. "Bloomberg is new, his staff may or may not be new," said newly elected Councilmember Gale Brewer. "We have to be vigilant and we need a strong speaker."

But the next speaker must also deal with a job whose power, duties and very definition,thanks largely to term limits, are all in flux -- as is the body the speaker will lead.

"The council as an entity has a big stake in organizing itself into a powerful body," said John Mollenkopf, director of the Center for Urban Research at the City University of New York. "If there is open warfare and discord in the council, it will enable the other half of City Hall" -- the mayor -- "to do what it wants."

Despite the importance of the position, unlike every other important race in Campaign 2001,voters have no say in who becomes the Speaker. That will be decided by just 26 people.

WHY IT MATTERS

While no one knows exactly how the new speaker and council will function, it is certain that the challenges that they and the new mayor face are immense.

Mayor-elect Bloomberg estimated that next year's budget deficit would be $2.5 billion. Mayor Rudy Giuliani has already called for 15 percent cuts in most city agencies. Several large unions, including those representing schoolteachers and police officers are still without new contracts. In early October, the comptroller estimated as many 150,000 jobs could be lost or temporarily moved outside Manhattan.

There are those who believe that New Yorkers should be able to turn to the city council, not just the mayor, in these difficult times.

"We only saw one arm of city government in response to the attacks on the World Trade Center," said Perkins. "Imagine if we could have organized the council in the days after the attack to say, 'Contact your local council person to get help and relief.'"

The unanswered question is, why couldn't they have? And will the new city council be able to do something like that in the future?

THE CAMPAIGN FOR SPEAKER

On January 9, 2002, a week after the new members of the City Council officially take office, their first task will be to elect their own leader. To become the next speaker, a council member needs 26 of the 51 votes in the council. The members keep voting until someone gets a majority.

"The situation this year is fluid, if not downright chaotic, and could resemble the 1924 Democratic convention when it took 103 ballots and 17 days to choose a nominee," said Douglas Muzzio of the Baruch School of Public Affairs.

In order to get votes, the candidates make deals, promising their colleagues that they will assign them to certain committees or approve their pet proposals. The political party leaders from each borough, and local unions, also have a stake in the vote, and try to deliver council members in blocs.

Who is the frontrunner? Some say it is Angel Rodriguez, a council member from southwest Brooklyn who has served on the finance committee, as chair of the Black and Latino Caucus, and who dreams that the Brooklyn waterfront will some day be a collection of parks and beaches.

Others say it is the Upper East Side's Gifford Miller. Earlier this year, Miller, who is 32 years old and has been on the council for four years, formed a group to help new council members get elected, in hopes that they would then support him as speaker.

Still others say East Harlem's Phil Reed or Harlem's Bill Perkins would be a good fit, with their charisma and outspoken advocacy for issues like affordable housing, AIDS funding, and improved education.

Also in the mix is the soft-spoken Al Vann of Brooklyn, who after serving 27 years in the New York State Assembly, has come to City Hall with his eyes on being the next speaker.

There are also three new members who are already calling for reforms of how things are done at City Hall, and are viewed as likely candidates for speaker: Bill DeBlasio, who managed Hillary Clinton's Senate campaign; David Weprin, son of Assemblyman Saul Weprin; and Melinda Katz, who served in the state assembly.

"It's pretty much up for grabs," said Barbara Fife of the Baruch School of Public Affairs.

NEW SPEAKER, NEW VISION

The current City Council Speaker Peter Vallone sometimes jokes that he is "the most progressive speaker in the history of the city." He is also, of course, the most regressive. That is because he has been the only speaker since the new city charter beefed up the power of what had been a largely ceremonial city council and created the job of city council speaker in 1989, as a replacement for the job of council majority leader. (When that happened, Vallone had been majority leader for three years).

Vallone is often credited with strengthening the council as a legislative body and as a more effective counter-balance to the mayor. He also used his role to discipline council members who did not go along with his agenda; he was known to strip members of their committee assignments or withhold funds from members who went against his wishes.

Under Vallone, the speaker has controlled nearly everything at the city council. He has hired the central staff, appointed the chairs of committees,and set the schedule and agenda. The speaker, along with the finance committee, worked with the mayor's budget. He also controlled a considerable portion of the council's discretionary funds so that individual members had to appeal to him personally for money.

And unlike most legislative bodies, the speaker has been the only member who can bring a bill up for a vote on the floor.

But even many of those who want to succeed him say the days when the speaker kept such tight reigns on the council are about to end. At least a dozen of the newly elected council members are advocating for reforms that would make the council more closely resemble Congress, where all members can introduce bills, there is real debate, and the individual members and committees are more independent.

"By empowering the members, you also empower the speaker and make it a stronger body," said Gifford Miller, who drafted a document he called his Empowerment Proposal, which advocates permitting the individual members to draft their own bills. "There is a big move toward democratization of the council," said Brooklyn Councilmember Angel Rodriguez. "Under Vallone the members did not have access to the speaker, but that will change dramatically. I hope the speaker will put forth the agenda of the body. With Vallone it was 'this is what I think the agenda should be' and then we followed."

Not everybody agrees that the second speaker will be that different from the first. "I don't think the role of the speakerchanges that much," said Al Vann. "I accept the spirit of change brought by the incoming members, tempered with the reality that the council must have order and structure in order to keep the mayoral system in check."

If the new members do not yet agree on who the next speaker will be, or even what the speaker's role should be, they are likely to agree on one thing: the city council should continue in the direction set by Vallone of a more powerful counter-balance to the mayor. Thanks to term limits and other factors, it is not clear that this will happen.

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Gotham Gazette the Place for Politics and Policy

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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