Transportation funding paves way for continued economic expansion.

Private sector development hinges on public sector investment. In no area is this more true than in transportation systems. The ability to move goods and people from one point to another conveniently and reliably is an essential building block for long-term economic expansion, particularly in New York City.

The public sector has stepped up and provided a major economic stimulus in the first half of 1999. One piece of legislation alone - the recently-adopted federal transportation bill (dubbed TEA21) - will provide multiple positive effects for New York's economy for years, even decades to come. The bill authorizes $14.7 billion over the next six years to New York for transportation improvements - a $4.5 billion increase from the previous six-year funding cycle.

Federal funds will be made available through the bill for the Metropolitan Transportation Authority's capital program, reconstruction of the Gowanus Expressway, purchase of new subway cars and buses, as well as other maintenance and repair projects. In addition, the legislation authorizes preliminary spending for two significant new investments which will make New York City more accessible to commuters and tourists and more attractive to private developers.

First, the bill provides $350 million toward much-needed access to Manhattan's East Side for Long Island Rail Road commuters. Currently, the only terminus for the LIRR in Manhattan is Penn Station, which is severely overcrowded and inconvenient for those who then must travel back to the East Side.

The project will permit LIRR trains to enter and depart Grand Central Terminal via the unused lower level tracks of the 63rd Street Tunnel, thus allowing up to 70,000 Queens and Long Island commuters per day to ride directly to the East Side of Manhattan. It also will free up space at Penn Station, allowing Metro North to provide service there, which would shift some of the Lower Manhattan commuter traffic from the Lexington Avenue line to the less-crowded Seventh Avenue IRT.

The new LIRR East Side connection also will facilitate quicker and more reliable airport service when combined with a new light rail linking JFK Airport to the LIRR and New York City's subway system in Jamaica, Queens. For the first time, thousands of residents, tourists and business travelers a day will have the benefit of taking rail transit to JFK Airport.

The second allocation, of $40 million, will help finance the already-approved conversion of the Farley Post Office into a new Penn Station. The station will ease congestion at the current Penn Station across the street from the post office, the capacity of which is taxed by 500,000 Amtrak, LIRR, New Jersey Transit and subway passengers a day.

The project will provide multiple benefits for economic development and civic improvement, in addition to transportation. The new Penn Station, which will be bathed in light from a glass ceiling and supported by attractive restaurants, stores and offices, will serve as a visible symbol of the rebirth of Manhattan's West Side and a word-class gateway worthy of a global capital.

The next challenge, however, is matching federal transportation dollars with local and state funds. Scant resources currently are on the horizon for the Metropolitan Transportation's Authority's next capital plan, and this looms as a top issue for the 1999 legislative session.

With the economic renaissance already underway, New York City is beginning to experience the problems of prosperity. More jobs means greater use of the subway system, on top of the increased ridership that has been generated by the MTA's highly successful initiation of unlimited free transfers. Further adding to the specter of overcrowded subways is this summer's introduction of daily, monthly and weekly passes, which is expected to boost ridership even further.

Accommodating further increases in ridership requires more frequent trains and additional cars on each train - an expensive proposition given that replacements for many of the City's subway cars, in addition to its aging buses, already are overdue.

With New York City and State both protecting huge surpluses this year and next, now is the time to invest further in the transit system. We learned the hard way in the 1970's that deferring needed maintenance and repairs will only cost taxpayers more in the long-ran, and drive employers from the region.

With unemployment declining, tax revenues increasing, and ongoing development throughout the city - most notably in Times square, Lower Manhattan, Queens West and Harlem - New York City is experiencing an unprecedented renaissance as it heads into the 21st Century. Building upon this momentum requires dedicated investment in the infrastructure that sustains it. New York's delegation in Washington recognized this in drawing up the federal transportation bill. Now it is up to City and State officials to follow their lead in subsequent budgets.

(Richard T Anderson is president of the New York Building Congress, a non-partisan, 77-year old public policy coalition of business, labor, professional, association and governmental organizations representing the design, construction and real estate community. Its 300 corporate, institutional and labor union members comprise some 100,000 individuals.)