Statement of Robert Kiley
New York City Partnership and Chamber of Commerce
ISTEA Reauthorization
April 7, 1997

Good afternoon. I am Robert Kiley, President of the New York City Partnership and Chamber of Commerce. The Partnership and Chamber is New York City's preeminent business and civic organization, dedicated to improving New York's economy, business climate and quality of life. Our members are the CEO's of the City's major corporations, executives of medium and small companies, and the leaders of universities, civic, non- profit, and cultural organizations. I am the former chairman and CEO of the Metropolitan Transportation Authority (MTA) in New York, and the Massachusetts Bay Transportation Authority (MBTA) in Boston. I served as an AMTRAK Board member until 1996. I appreciate the opportunity to testify on behalf of the New York City's business and civic community on the reauthorization of the Intermodal Surface Transportation Efficiency Act (ISTEA).

Reauthorize ISTEA As Is

Mr. Chairman, the Partnership believes strongly that ISTEA should be reauthorized as is. We support the "ISTEA Works" principles endorsed by 17 Governors, and we endorse the approach of the Moynihan, Lautenberg, and Lieberman bill, which builds upon these principles. Moreover, we believe Congress should increase significantly ending for transportation. ISTEA has promoted important transportation policies that have benefited not only New York, but the entire nation. There is no reason to tinker with ISTEA's programs and funding formulas which are working well.

Maintain Strong Federal Commitment / Distribute Funds Based On Need

The Partnership opposes proposals that would reduce or eliminate the role of the federal government in funding the nation's transportation systems. That would be a major step toward eliminating the federal government's transportation responsibilities, and it would be a major step backwards. We are also opposed to proposals that would distribute federal transportation dollars based on the amount of gas tax a state sends to Washington which would be tantamount to the same thing. Transportation systems and the economic benefits they produce do not end at a state's borders. Florida's citrus growers depend upon decent roads in New York to deliver produce quickly, safely, and profitably. ISTEA recognizes the interconnectedness of the transportation system and it divides funding responsibility among the federal, state and local governments as is appropriate. These are important principles which should be strengthened, not abolished or weakened.

The economic health of the New York metropolitan region is critical to the nation. In fiscal year 1995, the region contributed $40 billion more to the federal treasury than it received from it, according to a recent publication by the John F. Kennedy School of Government, at Harvard University. (New York State contributed $18 billion more, New Jersey $15 billion and Connecticut $7 billion.). Do the states that are advocating a change in ISTEA's funding formulas, so that states receive back what they contribute, want that principle applied across the board? New York would stand to gain from such an approach, but certainly we are not advocating it. One of the important purposes of the federal government is to insure that funds collected are allocated according to need.

New York's Transportation System Fuels The Regional Economy And Contributes To Cleaner Air

New York's transit system of subway and commuter rail provides the foundation for New York's productive economy, and has played a major role in facilitating the concentration of economic activity in Manhattan. Each business day, over 6.7 million people enter and leave the Central Business District (CBD) in Manhattan, 4.4 million by public transportation. (In the New York metropolitan area, 36.6% of all commuters take public transportation, unlike the rest of the U.S. where only 5.3% use public transportation. In the Manhattan CBD 85% of the commuting trips are by transit.). Here, transit makes the New York metropolitan region work. It provides for efficient transportation of people, reduces the number of cars that travel on our highways and roads, and improves air quality. Recognizing the important relationship between transportation and clean air, Congress designed ISTEA's Congestion Mitigation and Air Quality (CMAQ) Program to help metropolitan areas implement transportation measures to improve air quality. Congressional proposals to distribute transportation funds based on a state's gas tax contribution would not only be grossly unfair, they are also totally inconsistent with the nation's goals to improve air quality, reduce fuel consumption, and reduce the travel time workers spend getting to and from their jobs.

Investments In Transportation Are Needed to Support A Growing Economy - Our economy, New York's and the nation's, will suffer if we fail to invest adequately in our roads, bridges, high-speed rail, shipping ports and mass transit. Our highways and transit systems require an additional 41 percent in funding over present levels just to maintain current conditions, according to a U.S. Department of Transportation report. Bringing the system to "optimal" levels would require doubling our capital investment. Efficient transport of people and goods is a key factor to global competitiveness. We are far behind our competitors. London, Paris and Tokyo are investing heavily in expanding their transit and roadway networks, outspending New York by a factor of 10 to 1 and more (Konheim and Ketcham, Inc.). We must do the same. The New York metropolitan region is a gateway to world markets for the entire nation. Today, 45% of national earnings in securities and commodities trading are generated in Manhattan. These and several other key industry clusters, including the media and information, bio-medical and fashion industries, have the potential for enormous export growth. But we wont realize this potential unless we invest in our overburdened transportation system.

Investments In The Nation's Transportation Infrastructure Mean Jobs

Increased investment in our transportation system would have another benefit: It would stimulate long-term economic growth and create jobs. (A U.S. Department of Transportation study shows that every $1 billion of investment in federal highway programs supports 42,000 full-time jobs: 27,000 in highway construction and related industries, and 14,000 jobs in other industries.). Congress should be especially concerned about this since the new federal welfare law requires every state to put able-bodied adult welfare recipients to work within the next five and one-half years. Hundreds of thousands of people will have to find jobs. It will be impossible for the private sector on its own to employ them. But the public sector working with the private sector could do wonders. A massive public works program would not only employ large numbers of people, it would enable the nation to improve its transportation infrastructure and remain economically competitive. The 4.3 cents of the federal gas tax which is dedicated to deficit reduction, generated $7 billion in federal fiscal year 1996. These funds could be used as a revenue stream to back bonds for public investment. The Highway Trust Fund has surpluses of $20 billion, which on paper are dedicated to the federal budget deficit. These funds should be used for the purpose they were collected for - - to construct and maintain an adequate national transportation system.

For all these reasons, the New York City Partnership urges you to seize the opportunity of the ISTEA reauthorization to make a good law better. Reauthorize ISTEA as is, and increase the authorizing and appropriations funding levels for our nation's transportation needs. Thank you.