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Making 1993 a year for investment.

The year 1993 should be dedicated by top public officials at all levels of government -- federal, state and city -- as "A Year for Investment."

In terms of achieving a strong economy and creating jobs, there is nothing more important for economic growth today than public works -- particularly in the Northeast. This region's business market is one of weakest of any in the nation. The Congress' support for public works is grounded on a recognition of the tremendous economic multiplier effect that capital programs have.

We in New York need both economic stimulus and the jobs that will result from such a program. The private real estate industry and, in fact, the overall private New York construction industry, are soft. The building industry here has lost 32,000 construction jobs because of the recession, and we are experiencing a 50 percent unemployment rate -- among the highest of any industry.

I have no hesitation in urging President-Elect Clinton, New York Governor Cuomo and Mayor Dinkins to implement public works programs as quickly as possible in 1993.

As this was being written, there were media reports that President-Elect Clinton, even while recognizing the importance of deficit reduction, was aware of the importance of dealing with a greater need for capital spending. The nation requires this type of stimulus as a means of giving the economy a boost, of assuring that the United States does not slide back into recession, and of developing a modern infrastructure competitive with those of other world markets.

Toward these goals, when I addressed the Clinton transition team in Atlanta, I called for a start on several types of capital spending programs. I backed funding of the federal $151 billion Intermodal Surface Transportation Efficiency Act which passed Congress in 1991. Adoption of this law was, largely, the result of the vision and work of New York Sen. Patrick Moynihan, and it potentially will create tens of thousand of jobs for the state.

But I also supported a proposal for a federal capital infrastructure program to provide assistance directly to state and local governments all over the nation to fund ready-to-go projects that will create jobs now. Some 7,252 projects in 506 cities could be launched now at a start-up cost of $13 billion. If funded, these projects would generate 418,415 new jobs in a year.

At the state level, I urge Governor Cuomo not to use capital spending programs to help balance the state's operating budget. Public works are needed in this state, both as a means of renewing the state's aging infrastructure and of creating jobs. The Building Congress' report, "Fast Track to Recovery," estimated that $1 million dollars in public construction spending can be responsible for creation of 10 onsite jobs and 16 other jobs in the region.

And I also call on Governor Cuomo to begin to implement $25 billion of capital spending proposed over a five-year period. This is part of the Governor's economic development program. Following his "State-of-the-State Budget Message," critics pointed out that there is nothing new in the $25 billion of capital spending that was cited by the Governor. They said it represents a packaging of previous plans to build or repair bridges, roads, office buildings and schools. But a year when the state budget is coming in at a deficit may not be a time to create new programs. However, it is a time to launch programs that have been passed and funded.

In this context, it is worth noting a multiplier illustration cited recently by State Assemblyman Howard Lasher, chairman of the Housing Committee. Lasher estimated that the "economic power generated by the state's housing construction and rehabilitation programs amounts to $7 for every $1 in state spending." That is a remarkable geometry increase.

In the "Fast Tract to Recovery" report, we estimated that $1 million in public construction spending creates $4 million in total economic activity in the New York City region, and, though not as large as Lasher's, that too is a big bang for a buck.

We hope that government at all levels gets the message and joins with us in helping to make 1993 "A Year for Investment."

The New York Building Congress is a non-partisan, 70-year-old public policy coalition of business, labor, professional, association and governmental organizations representing the design and construction community. Its 500 corporate, institutional and labor union members comprise some 150,000 individuals.
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Title Annotation:Review & Forecast, Section V; economic strength and job development depend on public works programs
Author:Coletti, Louis J.
Publication:Real Estate Weekly
Date:Jan 27, 1993
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