In his budget speech Tuesday, Gov. Cuomo said that rebuilding New York from Superstorm Sandy with $30 billion from the feds “is going to be years and years and years.”
One thing he didn’t say: $30 billion goes fast. In fact, it’s already gone, on paper, at least — and Cuomo should start making clear that New Yorkers are going to have to pay for some of the goodies on his list themselves.
The governor laid out a long list of Sandy spending ideas:
* Spend “about $2 billion” on roads, to either move them out of flood-prone areas or “mitigate” them to better withstand floods.
* Put “$6 billion in mitigation” in mass transit. That means “vent covers, tunnel bladders, pumping capacity,” the governor said. “You can’t let the subway system flood.”
* Invest “$2 billion in hardening the energy system.” We can’t have “some blackouts as long as 21 days,” he said, shouting out to swing voters on Westchester and Long Island.
* Spend $2 billion on grants to local governments because “every community has a context and it has a fabric all its own,” including knowing more about “what to do about their recreation centers” than Albany does.
That’s $12 billion already — not counting some even bigger-ticket items that the governor either didn’t mention or didn’t price.
The Metropolitan Transportation Authority has already changed its five-year investment plan to add $4.8 billion in Sandy repairs only — not the sexier preventative measures Cuomo’s touting.
And another $4.9 billion is already spoken for — to bail out the federal flood insurance program, which must pay out homeowners’ insurance claims.
So $22 billion of the feds’ $30 billion is already committed.
On to the rest of Cuomo’s list. He said nice things about building a better sanitation system and a better gasoline-delivery system, without saying how much those things might cost.
And that’s before we’ve even gotten to the biggest cash drain: housing. The feds are giving New York about $7.5 billion to help people either rebuild their houses or sell them to the state.
Cuomo was very enthusiastic here, touting his newly minted “Recreate NY Smart Home” and “Recreate NY Home Buy-Out” programs. In other words, the governor is eager to have his name on checks going to New Yorkers to pay to elevate their houses or just move out of a flood zone.
But this could get very expensive, fast — far exceeding the budgeted $7.5 billion and siphoning some money from other stuff.
Which leaves us spending more than the Feds have given — that is, facing a potential Sandy deficit.
The governor should act fast to slash it — by ditching items from his list that the government doesn’t have to pay for.
First to go should be the $2 billion for a “harder” power system. There’s no reason for federal and state taxpayers to foot this bill — nor any reason to pretend that $2 billion would do the job.
Con Ed says it would cost $38 billion to $40 billion to put all its power lines underground. If outer-borough and Westchester residents want to cut the risk and length of power outages, they can pay that bill. LIPA ratepayers can do the same on Long Island.
That holds true, too, of sewage systems and the gasoline-delivery networks. If the governor wants to hold pipeline companies and gas stations to higher reliability standards, that’s fine — it will just push up the price of gas.
Likewise, if Long Islanders want to pay for a reliable sewer system (rather than for, say, $200,000-a-year cops), that’s their business, not Albany’s or Washington’s.
But the best place to slash is the biggest: housing.
If a homeowner wants to build higher (or must, because of zoning codes), he should pay for most of that cost, if not all. He’s getting the benefit of less future flooding. Likewise, if someone wants to accept a state buyout, he should do so at a loss.
(By the way, the state shouldn’t even think about compensating towns for lost property-tax revenues after any mass housing buyouts. Trust me, this will come up.)
Cuomo should be clear: $30 billion isn’t a lot of money in New York. The state will spend three times that next year, just on its everyday budget costs.
If people want higher houses and more reliable power and sewers, they’ll have to pay at a personal or local level.
Otherwise, we’ll end up spending all that cash— and still have a city and state unprotected from floods.
Adapted from a forthcoming
City Journal
article.