Statement of the Honorable Marc H. Morial
Mayor of New Orleans
on behalf of The United States Conference of Mayors
before the Senate Environment and Public Works
Subcommittee on Transportation and Infrastructure
Hearings on the “Federal Role in Meeting Local Infrastructure Needs”
July 23, 2001
Mr. Chairman and Members of the Subcommittee, I am Marc H. Morial, Mayor of New Orleans.
I appear today on behalf of The United States Conference of Mayors where I serve as the organization’s President. The Conference is a bipartisan organization that represents mayors of the more than 1,200 cities with a population of 30,000 or more.
Mr. Chairman, I want to thank you and other Members of this Subcommittee for holding this hearing today to examine the “Federal Role in Meeting Infrastructure Needs.”
Let me begin by emphasizing that the nation’s mayors believe that the federal government needs to be a strong leader in partnering with cities on local and regional infrastructure projects. We also believe that the federal government is uniquely situated to ensure sufficient flows of public capital in meeting the nation’s growing infrastructure needs, including the preservation of existing critical assets, to support an expanding economy.
In my testimony today, I offer some of the mayors’ perspectives on the necessity for increasing federal commitments to infrastructure investment. In providing these views, I include findings of a recent survey of the mayors on these issues. I also offer up a new context or benchmark – investing in our nation’s most potent economic engines, cities and their metropolitan economies – to guide future federal policy decisions on infrastructure investment. Finally, I describe several infrastructure projects in the City of New Orleans to illustrate some of our needs in this area.
Mr. Chairman, I would to begin my remarks by thanking you and the other Members of this Committee for your leadership in crafting the bipartisan agreement on brownfields and in moving this legislation, S. 350, forward so successfully in the Senate. This legislation will make a real difference in cities, counties and regions throughout the nation.
There is a clear nexus between recycling America’s land through brownfield redevelopment and the infrastructure issues before us today. For too long, we have let these properties – thousands and thousands of acres of land in existing communities and places with substantial infrastructure in place – lay idle, as development races relentlessly to undeveloped and pristine land, ever further away from our built-up areas. We know that this pattern of development has been highly consumptive of our public infrastructure dollars, as we chase ever spreading and lower density development and its associated needs. This form of land use requires infusions of capital for new facilities and systems that is disproportionate to the number of people and economic activity that we are attempting to serve. This is occurring all the while incumbent system needs, both modernization and rehabilitation, are overlooked or ignored, facilities that serve a substantial majority of our citizens.
When Past Conference President and then Fort Wayne Mayor Paul Helmke testified before this Committee at your March 1999 hearings on livability and open space, he helped develop your record on the many linkages among brownfields, infrastructure and urban development.
By embracing S. 350 and other brownfield-related policies, we will, for the first time, take significant action to help decelerate the several decades-old pattern of outward development, while renewing our attention to the substantial public and private investment we have made in existing communities and places. In the very fast growing and relatively new cities and regions, broader brownfield reuse efforts will not be as potent as it will be in most other areas. However, it is a crucial first step in redirecting our public resources inward to places where most Americans now live and work and where the nation’s most crucial economic assets are located.
The mayors applaud this Committee’s leadership on S. 350 and we are anxious to see final Congressional action on brownfields legislation over the next several weeks. We strongly share Committee Chairman Jeffords’ goal to have this legislation enacted this summer
Mr. Chairman, let me provide some of our key perspectives on the challenges before this Committee, the Congress and the nation in addressing our nation’s growing infrastructure needs.
Mr. Chairman, if there is one perspective that I believe is most important to this hearing today, it is that ‘local’ infrastructure needs are no longer simply a local concern. These needs are of national significance, of national economic importance and of substantial cost, exceeding local capital resources.
It is a given that one of the fundamental functions of government is to ensure that the nation has a modern and efficient infrastructure to support our societal and economic endeavors. Among the challenges we face locally, like all leaders in government, is to find ways to reinforce in the public’s mind the importance of investing in these infrastructures. Sometimes, we can’t immediately see the benefits, or in other cases, the benefits are longer term. And, we know that investment in the nation’s infrastructure is more than an exercise in shifting responsibility among levels of government.
An overriding theme of the Conference’s recent efforts has been to call attention to the role of cities and their metropolitan economies in fueling U.S. economic growth. At some point in nation’s economic development, many of the infrastructure needs in cities and regions ceased to function as ‘local’ infrastructures. Increasingly, these systems are national infrastructures in their scope and importance. Later in my statement, I share some of the Conference’s work on metropolitan economics to bolster this claim.
Whether it is Mayor Williams’ efforts that anchor a metropolitan economy that influences three states and the District of Columbia, an economic engine that last year outpaced the economy of Austria or Hong Kong. Or, it is Mayor Campbell’s city that anchors a metropolitan economy that generated more output than Norway or Denmark. Consider the New Orleans region, an economic engine that now accounts for nearly one-third of my state’s total output and easily surpasses the economies of Kuwait or Syria.
As we look at the broader issue of infrastructure investment, we see the federal government as an investor, a partner in building national prosperity. It is an undeniable reality that the U.S. economy will grow or stall, based on the economic performance of our nation’s metro economic engines. Our metro economy reports show this convincingly. And, they underscore how infrastructure assets fuel the output of these metropolitan engines.
As mayors, we see infrastructure investment, particularly larger scale projects that often surpass locally available resources, as one of the pathways to improved productivity and economic performance of our metropolitan engines. These are investments that influence and shape the rate of U.S. economic growth.
Look at Mayor Campbell’s capital plan for Hartsfield, a city-owned facility that serves more people than any airport in the world. This one asset has helped define the economic prosperity of the Southeastern United States. There are numerous examples everywhere of how these infrastructure assets, while perhaps none so dramatic as Hartsfield, now fuel metropolitan output and, in turn, underpin our states and U.S. economic growth.
In recent remarks to the National Press Club, I made the point that the improved health of our nation’s cities and their influence on their metropolitan economies helped drive one the most significant economic expansions in this nation’s history. This did not happen by accident.
Mr. Chairman, when Fort Worth Mayor Ken Barr testified before this Subcommittee in last Congress, he first introduced this panel to some of our work on metro economies as well as our perspectives on the implementation of TEA-21. The report that we just released now provides data over the ten-year period, 1990-2000, covering all of the nation’s most recent economic expansion.
We believe that our metro economies data is a powerful tool in helping this Committee fashion policies to partner with states and local governments on infrastructure. It can be a new standard upon which to gauge the effectiveness of financing strategies and other efforts and can help policy-makers make more strategic investments for the future.
With this context of metropolitan economies as a roadmap for making more strategic infrastructure investments, I want to offer some further observations on where we are in meeting our infrastructure needs.
With the enactment of TEA-21, the mayors saw this as a milestone in the national debate on rebuilding the federal partnership on infrastructure investment. With this legislation in 1998 – where the federal partnership commitment to surface transportation nearly doubled – mayors and others viewed this as the first installment in a broader effort to increase our public commitments to the nation’s infrastructure.
Building upon this legislation, Congress substantially increased funding commitments to the nation’s aviation system with the enactment of AIR-21 in the last Congress. Again, capital commitments to airport capital needs and our national aviation system more broadly were raised to the next level.
Both initiatives – AIR-21 and TEA-21 – were badly needed and enacted just in time, as our world-class highway and aviation systems labor under rising demands. But these are not the only systems that are overburdened.
Mayors anxiously awaited this Congress, looking to engage you and others on the need to further enhance our federal partnership commitments to other infrastructure needs. As you know, mayors have been seeking action on new initiatives to increase capital commitments to intercity rail, rail transit, water and wastewater, parks and school modernization, areas of need that are now on the Congressional agenda and in the queue for legislative action.
We see the need for a longer-term federal infrastructure strategy that builds upon the gains that we made under TEA-21 and AIR-21, while extending this investment thrust into other areas, through initiatives such as WATER-21 and RAIL-21.
You have already built a record on the rapidly escalating needs in the water and wastewater area, with need analyses by the Water Infrastructure Network (WIN), American Water Works Association, U.S. EPA and others.
One of your Committee members, Senator Voinovich, has already stepped forward with a legislative plan to begin closing the gap in this area of need.
The funding gap here is driven by what is needed to maintain the integrity of existing systems, while investing in new facilities to meet federal standards.
One of the areas that the mayors believe warrants particular attention, along with an expanded federal commitment, is rail transportation. In January, I led a National Mayors’ Summit on A National Rail Policy for the 21st Century to begin to begin pressing for increased investment in the nation’s rail infrastructure, both for passenger and freight.
The mayors are seeking enactment of the “High-Speed Rail Investment Act of 2001” (S. 250) as the first installment in this broader national commitment to the nation’s rail infrastructure. Mr. Chairman, I want to underscore the strong support of the mayors for S. 250, legislation that will help us further modernize our nation’s intercity passenger rail capabilities.
Rail transit is another key element of this national policy. Today, these systems are taking root in every part of this country, with more than 200 projects – be it light rail, heavy rail, commuter rail, trolleys and other fixed guideway projects – now being studied, planned or constructed. Later, I provide examples of rail projects now underway in the New Orleans area.
It is now estimated that the pipeline demand for capital for these rail projects already exceeds $35 billion, against an expected federal commitment in the next fiscal year of about $1.1-1.2 billion. In our survey, the number and geographic distribution of mayors who cited light rail or other rail transit projects as their city’s number surface transportation priority represents a sea change in surface transportation investment priorities.
In the wake of the 1991 ISTEA law, when local areas were given the opportunity to help shape transportation priorities for their local areas and regions, rail investment moved to the forefront of the transportation agenda. We can no longer afford to view this need as an issue for cities and regions of the Northeast or Midwest, it is now national in scope. To amplify this point, consider the pending FY 2002 Transportation Appropriations bill, which was recently approved by the Senate Appropriations Committee, where 38 states are represented in the ‘new starts’ program.
We believe there is much to be done on the rail transportation, both intercity and local projects, that the mayors would urge this Committee to consider and work with us on strategies to accelerate investment in these projects.
Mr. Chairman, we recognize revenue expectations have changed dramatically since the first of the year, when mayors and others began pressing to allocate portions of the surplus to these priority infrastructure needs. Nonetheless, we believe we must still find ways to finance these infrastructure needs. Mayors are certainly open to creative mechanisms, like the bond/tax credit approach set forth in S. 250, legislation we strongly support, to further our progress in addressing our nation’s infrastructure needs.
And, it is not just about more money or doing things in the same old way. In the water and wastewater area, we are seeking reforms that will promote more competition among private companies in delivering more cost-effective solutions to our needs. This effort includes seeking changes in procurement practices and laws to move us away from the more traditional design, bid and build processes to design/build models. We are also advocating approaches that emphasize standards-based compliance, not facility-based compliance. We have called for the adoption of tax and other incentives to attract more private capital in support of our efforts. While we are seeking ways to reduce the costs and promoting new partnerships with the private sector, we don’t want to understate the reality of the needs in this area. We know that there is also an urgent need for an expanded federal partnership on water investment, one that includes additional financial commitments to local areas, to address the surging needs in this area.
As the revenue outlook improves, we would certainly urge you and others to work to dedicate some portion of any future surplus revenues and be open to new revenue sources to finance the many infrastructure needs that we are discussing here today.
To prepare for this hearing, the Conference surveyed 160 mayors to solicit their priority concerns on infrastructure. First, we learned that surface transportation was the number one priority, with more than 50 percent of the mayors choosing this area (defined as highways/streets and transit/rail). One quarter of the mayors indicated that water and wastewater was their city top infrastructure priority, followed by 13 percent of the mayors selecting schools/libraries as their top priority. The remaining respondents chose aviation, telecommunications, parks and other areas of need.
I would point out that these responses generally follow the functional areas where cities play a dominant role. Cities with counties, for example, own and operate about 80 percent of the nation’s streets and highways, explaining their strong interest here. Many cities do own, but most largely participate in the governance or policy direction of the nation’s transit systems, which are generally regional providers. With regionalization of many water and wastewater services since the 70’s, cities are less dominant in these services, particularly treatment functions, but most own or are responsible for the collection and delivery systems. While schools are most often a function of independent schools districts, libraries are generally a city function as are urban parks. The relative priority of aviation can be explained by the fact that in most metropolitan areas there are only one or two owner/operators who are directly responsible for this infrastructure
Anticipating the importance of surface transportation issues to the cities, we asked each of the respondents to rank their top three priorities in surface transportation, choosing from a menu of ten items. Nearly 50 percent of the respondents indicated that highway/street maintenance and rehabilitation was their top priority, emphasizing the interest of cities in system preservation. Highway/street capacity was the top priority for 22 percent of the cities, followed by transit capacity as the top choice for 14 percent.
In addition to strong support for streets and transit, I would note that 28 percent selected bridge replacement/rehabilitation, 26 percent selected pedestrian/bicycle/school crossing and 25 percent selected intermodal facilities/system integration as among their top three concerns. These survey results do follow to some degree the basic structure and principles embedded in the TEA-21 legislation.
When mayors were asked to describe what federal actions would be most helpful in meeting city transportation needs, the self-selected responses (i.e. specify concern) were very consistent. Additional funding was cited most often, followed by requests that more funding flow directly to cities and local areas, rather than stopping at the states.
Mayors were also asked to list the single most important project in their city. While there was a broad cross-section of responses, it was notable how many cities indicated that light rail, commuter rail, high-speed rail, continued Amtrak service or other transit projects among their selections.
Mr. Chairman, I would like to offer a couple of observations on the survey that we conducted. It follows some of what we found in our previous survey that Mayor Barr presented to this Committee in the last Congress. First, we know that TEA-21 substantially increased the funding commitments to surface transportation. What we don’t know yet is how the bulk of these funds move around in the system, given the absence of transparency in the flow of dollars within the states. This was the central theme of Mayor Barr’s testimony to this Subcommittee during the last Congress.
But we do know that there are some rapidly rising needs in the surface transportation area, particularly in the growing demand for rail projects. Despite dramatically increased funding and the flexibility that is provided under TEA-21, many states are not taking full advantage of what the law allows, particularly in aiding local and regional transportation priorities.
The point to be made about our infrastructure needs is that isn’t just about more money, it is also about understanding how current funding is being allocated. TEA-21 was about more than sparing Governors or the states the political inconvenience associated with raising state transportation dollars, it is also about addressing transportation needs in cities and in our metropolitan areas. That is what our efforts on metropolitan economies is all about – to make the point that we need to be using these dollars strategically to make the investments that keep their metropolitan engines running. And, sometimes, these investments may not be the highest priority for State agencies, but are most important to the cities or the metropolitan areas.
Mr. Chairman, I know that we will have an opportunity to discuss these issues with you during renewal of TEA-21, but I thought it was important to indicate how the mayors are thinking about these issues.
As I previously noted, I recently had the opportunity to address the National Press Club on the Comeback of America’s Cities. My message was simply that we have a new reality before us – American cities, the new American City, can no longer be defined by mere political borders or by the jurisdiction that a mayor may serve over. I also made the point that infrastructure investment is one of the “keys” to furthering this Comeback of America’s Cities and the continued prosperity of this nation’s economy.
Of particular importance to federal policymakers is the reality that the growing health and strength of America’s cities and their metropolitan economies is now the very reason why America's economy came back.
Mr. Chairman, we have the data that backs this up. Several years ago, we retained one of the nation’s foremost economic firms, DRI-WEFA, to compile annual reports on the economic output of our nation’s metropolitan economies. At the Press Club, I released our new report on the Gross Metropolitan Product (GMP) for the nation’s 319 urbanized areas. It also documented the output of our metro economic engines over the last decade.
Our Metropolitan Economy Report, U.S. Metro Economies: The Engines of America’s Growth, A Decade of Progress, tells a story that is as significant as any story that's been told in the last 25 years. If you look at American cities – cities as the integral parts of the economic units we call metropolitan economies – and then rank them in terms of the strength of these economies with the nations of the world, it changes the way you think about the policy choices before the nation. Ranking these metro economies, not with states, not with regions but with the nations of the world, these areas represent 47 of the 100 largest economies in this world.
These numbers are so compelling that the economy of New York – yes, the economy of metropolitan New York – is larger than the economy of Australia. Looking at the economies of other cities in their broader metro context, you will find that the economy of Chicago is greater than Taiwan, Argentina, Russia, or Switzerland. Philadelphia and Houston are larger in output than Hong Kong.
But even more significant is looking back on the 1990s, a decade of great economic growth, a decade of new jobs and a decade of expansion in new sectors of the economy, like technology. When we look at where those jobs were created, where that new economy flourished, it was in American cities and in their metropolitan economies. Almost 90 percent of the new jobs and in excess of 90 percent of the technology jobs were created in these areas.
Consider other findings. With 20 percent of the land area and 80 percent of the nation’s population, these 319 areas last year accounted for about 85 percent of all U.S. economic output, a share that is projected to rise over the next couple of decades.
What is particularly striking in its policy implications is the finding that in 2000 the output of the top ten metropolitan areas exceeded that of 31 states.
Mr. Chairman, when you look at Nevada, we can readily detect what you know about the challenges before your state, and why infrastructure investment is so crucial to the continued economic success of your state and the nation. The single fastest growing metropolitan economy in the U.S. over the last ten years was the Las Vegas metropolitan area, an economic unit strongly influencing your state’s growth, with spillover into Arizona. From 1990-2000, this metropolitan economy increased its output from $20.5 billion to $54.6 billion, an astounding increase of more than 166 percent. This represents an annual average growth rate of more than ten percent.
When you combine the output of the Las Vegas and Reno metro economies, you see that these two areas account for about 90 percent of the entire state’s economic output. In Oklahoma, as another example, the metro economies of its two largest urbanized areas, Tulsa and Oklahoma City, account for about 62 percent of the state’s output.
Mr. Chairman, we would strongly urge you and other members of this Committee to examine this data and consider its implications as you go forward in setting infrastructure investment policies for the nation. We think this is new information and offers further support to a broader Congressional infrastructure agenda.
To provide local context for my remarks, I have described some of the major infrastructure projects where the City of New Orleans is seeking federal assistance. These projects in rail transportation and sewerage infrastructure simply illustrate the scale of the challenges before us.
Canal Streetcar Project:
The New Orleans Regional Transit Authority (RTA) is developing a 5.5-mile streetcar project in the downtown area, along the median of Canal Street.
The Canal Streetcar spine will extend from the Canal Ferry at the Mississippi River in the central business district, through the Mid-City neighborhood to Carrolton Avenue, where one branch will continue on Canal Street to the Cemeteries and another will follow Carrollton Avenue to City Park/Beauregard Circle. The corridor is located in an existing, built-up area that was originally developed in the streetcar era. Much of the corridor lies within the central business district and historic areas, where employment and housing densities, mix of uses, and pedestrian-oriented development are generally good. The central business district includes a high-density mix of office, retail, hotels and leisure attractions.
The total capital cost of this project is estimated at $156,600,000, of which our RTA is expected to seek $125,300,000 in ‘new starts’ funding.
New Orleans Central Business District to Armstrong Airport Light Rail Project:
The CBD to NOIA light rail project is a new start project authorized under TEA-21. The project is intended to provide commuter rail transportation via light rail vehicles between the Central Business District and the Louis Armstrong International Airport. In TEA-21, funds were provided for preliminary work associated with the project.
Although we don’t have final estimates of the total project costs, it will be a substantial project and we will need the federal government as a partner.
Desire Streetcar Project:
The Regional Transit Authority (RTA) is restoring a 2.9-mile traditional streetcar line in downtown New Orleans, as part of the locally preferred alternative for the Desire Corridor. The Desire Corridor streetcar project will operate along North Rampart Street and St. Claude Avenue between Canal Street and Poland Avenue. The proposed streetcar alignment will loop at Canal Street and use exclusive right-of-way in the median of city streets, as much as possible. The project will serve the communities of Iberville, Treme, Faubourg, Marigny, St. Roch, and Bywater. Six major bus transfer points with construction of center platforms, canopies, passenger benches, and landscaping will be provided: 16 intermediate stops with less elaborate center platforms are also planned. The project also includes the purchase of 13 new vehicles.
The capital cost estimate of the streetcar project is $93,500,000, of which RTA will be seeking $65,500,000 in FTA funding.
Sewerage and Water Board Inflow & Infiltration Project:
The City has embarked on a very ambitious plan to correct the inflow and infiltration of its sewerage lines beneath the streets of the City, as required by a consent decree entered against the City by the U.S. EPA.
Because most of the New Orleans area is below sea level, over time the New Orleans Sewerage and Water Board developed an elaborate drainage system to remove the rainwater that falls every year in tropical amounts on the city. Partially because the system was built in the early part of this century, and also because of the great amount of subsidence and settlement of the soils in the area, the New Orleans Sewerage and Water Board normally spends approximately $5 million per year on line repair and replacement alone.
Although the repair and upgrade of the system is a continuous process, we have not been able to keep up with the highest environmental standards set by the federal government. The Board is under a consent order from the Justice Department to undertake this project, with the total costs of the project expected to exceed $400 million.
Mr. Chairman, I want to thank you for this opportunity to appear before you today to offer the perspectives of the nation’s mayors on the federal role in meeting our infrastructure needs.
This is a very high priority concern for the mayors and other local elected officials and we will stand with you and this Committee as you examine ways to sustain and expand the federal partnership commitment to infrastructure investment.
On behalf of the nation’s mayors, I thank you for this opportunity to present the views of the Conference and its members on these important issues.