GOVERNING THE SCHOOL SYSTEM

The looming expiration of the law giving the mayor control of the New York City school system has prompted an unprecedented discussion on how that system, the largest in the nation, should be run. To add to the debate, Gotham Gazette offers a number of perspectives:

Debating Mayoral Control
What has worked and what hasn't? How could it be improved? A panel of experts weighs in.

Making Joel Klein Behave
by Assemblymember Alan Maisel
The Department of Education promises it will improve, but it continues to shut out parents and others, according to this former assistant principal and current member of the state Assembly. He offers suggestions for how the department could change its ways.

In Charge and Unaccountable
by Councilmember Robert Jackson
The current system has shut out debate and dialogue, leaving the mayor and chancellor answerable to no one as they run a $18 billion department, contends the chairman of the City Council Education Committee.

The Department of Education's Power Grip
by Udi Ofer
Under the current system, the schools resemble a bunker where students' rights can be violated, the advocacy director for the New York Civil Liberties Union writes. The group proposes measures to promote more transparency and involvement.

Beyond Governance -- Creating a Constitution for City Schools
by Josh Karan
Governance issues are important but only go so far, according to this member of the Parents Commission on School Governance. To achieve excellence, he says, we need a constitution for out city's schools.

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Also, for reporting on the issues in the debate over mayoral control, see these articles from Gotham Gazette:

The Mayor's High Stake test, including a rundown on the various key reports on school governance

Choosing Side in the Fight Over Schools

A Battle Brews Over Who Controls the Schools

The vote in Albany deciding whether or not to reauthorize the law giving the mayor control of New York City's public schools is approaching quickly. A vociferous effort by defenders of the old system has recently dampened the support for keeping the power in the mayor's hands.

Opponents of reauthorization -- including the teachers' union and many Bloomberg administration critics -- have won the most ground with their argument that mayoral control is undemocratic. But there is a difference between a democratic political system and a democratically run bureaucracy. New Yorkers shouldn't let such arguments persuade them to return to the bad old days, when no one was responsible for the city's schools.

The Bad Old Days

The old system of an appointed, unaccountable Board of Education bred a culture of inaction and crippled Gotham's schools. Though opponents of reauthorization say that they don't want to go back to that exact system, for all practical purposes their proposed "tweaks" to the law would do that.

Mayoral control broke the stagnation produced by an unaccountable system. While some may still disagree with Mayor Michael Bloomberg's specific reforms, there is little doubt that mayoral control has been essential in moving education reforms forward.

Despite the allegations of those opposed to reauthorization of the current law, there is nothing inherently undemocratic about the mayor controlling a large city bureaucracy like the school system. After all, the mayor controls other city services -- police, fire, sanitation and others -- with little complaint that his power is dictatorial. Of course, public schools have a uniquely democratic purpose in providing children with the knowledge they need to be effective and productive citizens. But that hardly means that day-to-day school operations must be governed democratically.

As in other policy areas, democracy's role in education is to put in place representatives who reflect the will of the people and hold those policymakers accountable for their cumulative decisions. Relying on such democratic processes to decide each individual policy is impractical and only leads to the stagnation and the poor results of Gotham's past.

The Parents' Part

Mayoral control does nothing to deny parents their essential role in education. Parents are in the best position to know what is best for their individual child. But, as with other government agencies on which we rely, the mayor is in the best position to make decisions that affect the broader education system.

That said, parents and communities do have a large stake in schools, and they should be consulted about important policies. But the mayor couldn't avoid communicating with them even if he wanted to. Those opposed to his school policies aren't exactly silent. Dissenting voices have spoken out against just about every policy the Bloomberg administration has pursued. While the mayor has the final word, he pays a political price when he goes against the true will of the people, and doing so takes a toll not only at the voting booth but in his ability to govern. Just because those opposed to recent reforms often have not gotten their way does not mean that they did not participate in the governing process.

Gotham's $18 billion school system, which operates more than 1,400 public schools, is a complex bureaucracy that requires a decision-making entity -- namely, the mayor. Mayoral control should be renewed.

Marcus Winters is a senior fellow at the Manhattan Institute.

State Education Department Chancellor Merryl Tisch has added her voice to that of prominent education historian Diane Ravitch in challenging whether mayoral control of New York City schools has accounted for any improvements in student performance over the past several years or, indeed, whether significant improvement actually has occurred. The jump in test scores across New York State, with Buffalo registering a gain one third again greater than that claimed for New York City, has led Tisch to want to investigate whether "the tests have been made easier." Other experts have challenged official assertions of high school graduation rates.

Nearly all analysts -- from government officials, such as the public advocate, city comptroller and members of the City Council, to those who work in the schools (including members of the teachers union, the principals union and DC37) ---- as well as most major public school parent representatives -- have decried the lack of transparency, objective assessment and considerations of alternative policy ideas that have characterized the Department of Education, under the dictates of Mayor Michael Bloomberg and Chancellor Joel Klein.

Limiting Absolute Authority

Our society values democratic procedures because we recognize that no one has a monopoly on wisdom and that giving leaders unlimited power can have dire consequences. We have just lived through the debacle created by self-considered know-it-alls who brought us the deception associated with the war in Iraq, and with the AIG/Bear Stearns/Lehman Bros/Citibank accounting by Moody's and Standard & Poor's. Surely the lesson is that independent oversight, accompanied by additional sources of information and decision-making, are essential.

This is why the focus on the future of school governance is necessary. The current system offers no real accountability. After all, the opportunity to make change comes only once every four years by an electorate in which direct stakeholders -- children, parents and educators -- are vastly outnumbered by those not affected by the schools day to day. The majority of voters, therefore, will rely on issues other than the condition of schools to determine whether to re-elect a mayor.

The Limits of Governance

But while focus on governance is necessary, it is insufficient. There is no guarantee that any different structure will articulate the vision and implement the policies that will provide the kind of education many of us seek for all New York City students.

For the past 40 years, during which I have observed and participated in efforts to improve New York City schools, there have been centralized systems, various forms of decentralization and now recentralization. There have been chancellors who have been educators and those who have not.

Amid all this change, there has been one constant. Regardless of the system of governance or who was chancellor, the schools have failed the majority of students, primarily low-income children of color.

Accountability, transparency and structure matter -- but only if they exist to uphold and advance shared principals and goals. This is what has been missing in New York City.

Schools have had Comprehensive Education Plans, so have districts. But the system as a whole has lacked such a comprehensive education plan. The administration's Children First initiative hardly qualifies. It, and the recent district and school plans which flow from it, is a No Child Left Behind compliance document, filled with data about test scores, but nary a sentence about what qualities define an educated person. It lacks any mention of initiatives that will inculcate critical thinking, creative imagination, love of learning, scientific literacy and preparation for democratic citizenry.

In my District 6, 12 out of 13 middle schools received report card grades of A or B, yet only 30 percent of eighth graders met New York State standards in science, and only 16 percent do so in social studies. So what does any purported increase in reading or math scores reveal about whether we are educating children?

Setting Goals...

What is needed, therefore, is an explicit and legally binding articulation of purpose stating what we want to accomplish in our schools. This statement needs to be embodied in a Constitution for the New York City Public School System. Such a constitution can set out the vision and the mandates necessary to provide all our city's children with a truly comprehensive public democratic education regardless of who governs the system or how it is governed.

The model is that of the victory of the Campaign For Fiscal Equity, which challenged the funding of education in New York State. That lawsuit was possible only because the New York State Constitution guarantees the right to a "sound, basic, education." Citing that language, the campaign argued the level of funding for city schools was not adequate to provide such an education. Now, though, it is time to go beyond that framework to require the conditions to produce educational excellence for all.

The Parent Commission on School Governance, of which I am a contributor, has drafted a sample constitution illustrating what such mandates could include.

Some would involve resources. The schools might need to have, for example, sufficient trained instructional and support staff to reduce class size to the level recommended by the Professional Judgment Panels in the CFE case. In addition, the city and state would have to provide every school with the facilities that a comprehensive curriculum requires, such as science labs, art rooms, gymnasiums and auditoriums.

Other would concern educational philosophy. Steps would be taken to ensure the use of multiple forms of assessment -- not just standardized tests -- such as including rigorous individualized student projects, as the 28 schools in the New York Performance Consortium do, with excellent student outcomes. The constitution could require developing a staff sensitive to the diversity of ethnicity, race and class in the system and that reflects the demography of the students of the city. The constitution could stress the educational value of schools and classrooms that are racially and economically integrated.

Additional mandates could enshrine schools as collaborators with their communities offering universal pre-kindergarten and, along with other institutions, providing comprehensive healthcare, after-school recreation and adult education.

Such a constitution would codify in law what our schools have never had: a shared mission with core principles, primary goals and a policy framework that must be respected and upheld by whomever is governing the system.

... And Sticking to Them

At the beginning of every school year, the Board of Education and chancellor would set out how they plan to achieve these goals. They also would evaluate whether the board's policies are furthering the fulfillment of the mandates. That would be the beginning of real accountability of the Board of Education. Any non-compliant board would be subject to review by the State Education Department and ultimately could be removed from office through procedures set out in the constitution.

The board and chancellor also would provide an honest assessment of how much it would cost to fulfill the aims set forth in the constitution, even if that funding was not available. This would help determine what the level of education funding should be.

An Opportunity for Change

The Parent Commission has a governance proposal that it hopes the state Legislature will adopt. It includes a major role for parents together with a diminution of the mayor's power; restoration of district superintendents and offices; and greater attentiveness to students with special needs. Such measures can begin to change the educational environment.

Simultaneously, however, the legislature should seize this historic opportunity as we re-examine our school system and establish a broad-based task force or commission, composed of parents, educators, community based organizations, business and religious groups, to forge a citywide consensus on what would emerge as a constitution for our schools. Together with an organization called the Rs Coalition, we are drafting legislation that would incorporate this proposal.

Without articulation of an educational vision -- and a procedure for requiring that that vision be realized -- the schools will continue to fail many of our students. Then, when the next experiment with a governance system runs its course, we likely will once again have the same discussion we are having now about why students are unprepared for employment or citizenship.

That would be a tragedy for the families who have been denied for so long. It also would be tragic for our city.

Josh Karan has been engaged in efforts to establish democratic educational excellence for 35 years. He has been a community organizer in District 19 in East New York Brooklyn, an active supported of the Campaign For Fiscal Equity, and a member of the District 6 Community Education Council and the Parent Commission on School Governance and Mayoral Control.

The Lower Manhattan Development Corporation's blueprint for rebuilding lower Manhattan strongly emphasizes transportation. In fact, the corporation says that construction on much of the World Trade Center site cannot begin until transportation improvements are in place.

While I applaud this emphasis, I am not surprised by it. The September 11th tragedy struck a massive blow to the transportation and utility infrastructure of Lower Manhattan. The subway lines, the PATH, major roads and critical utility lines were all knocked out of service -- some for a few days or weeks, others for months and for years to come.

In light of this, one of the keys to the redevelopment of Lower Manhattan is not only what the site is ultimately going to look like, but how we get people in and out of the area. In addition, tragedy has left us with a tremendous opportunity -- a clean slate to work with. So another key issue is how we can use the rebuilding process to rectify a number of the planning mistakes that were in place before September 11.

For people who worked downtown, lived downtown, or even tried to go downtown before September 11, lower Manhattan was a hodgepodge of subway and commuter lines. Often you could not connect from one line to another line. There was no one link bringing everything together. Instead, you had to go through caverns of underground walkways and at times probably thought you would never reach the subway line you needed. Although a fairly active ferry service came into the Battery Park City north cove, there was no connection to bring the people to the buildings where they worked or to the subway lines. And the major commuter transportation line coming into lower Manhattan, the PATH, also did not connect to all the subway lines.

To correct this, the Lower Manhattan Development Corporation has called for a new hub connecting subway, commuter rail and ferry lines. This would probably mean the creation of an actual terminal in lower Manhattan.

In Europe, there are many grand terminals that are really testimonials and memorials to great times in European history and to great battles. Maybe the new downtown transportation terminal could be another memorial to the people who lost their lives on September 11.

The hub could be a beacon for lower Manhattan. It would serve as a station for the PATH train and for all the subway lines. At 42nd Street on the West Side, one subway station pretty much links you up with all the train lines. This downtown terminal would do the same thing. It would also connect to the ferry terminal and to various sites downtown. It could include an underground bus terminal for commuter buses and the tour buses that will come downtown to bring visitors to the proposed memorial and museum and other sites. My sense is that the proposed terminal will probably be somewhere along Church Street, but no exact location has been determined yet.

After September 11, we analyzed how people come into lower Manhattan, where are they come from and where they want to go. We found that more than 40 percent of the people who took the PATH train went east to the Wall Street area after they came in, some to buildings, some to subway lines. But there was no way of getting them east below ground. They walked above ground.

This suggests the need to create a link to get people farther east and into our subway system quickly and safely. This could involve an underground pedestrian tunnel and people movers.

Extension of the commuter rail lines into this downtown hub is also being discussed. We now have an ideal opportunity to do this and ease the commute downtown for thousands of Westchester and Long Island residents, but it would be quite costly. Whether or not this should be pursued as opposed to other initiatives remains to be seen.

Many of the other links are already in place. Clearly the Metropolitan Transportation Authority and the Port Authority were stretched to the limit before September 11. Now, though, President Bush's recovery bill of $21 billion includes nearly $2 billion for this initiative, as well as funding for road and infrastructure repair. However, meeting the transportation needs of lower Manhattan has been estimated to cost at least $7 billion.

Some aspects of the plan will eventually save money. Before September 11, the bus routes downtown, as well as truck deliveries, were very cumbersome because of the streetscape. If you remember, Dey Street and Fulton Street did not go through to the river because of the World Trade Center site. Restoring the street grid will make it easier and more economical for trucks and buses to move downtown.

Restoring the street grid will also make the streets more accessible and safer for pedestrians, which is one of my big goals. It will connect lower Manhattan in a more rational way to Battery Park City. As we restore the grid, we can create a number of access points to the street to help passengers safely go to and from the various subway stations, tunnels and people movers.

Burying West Street for all or part of the way between Chambers Street and the Battery Park Underpass, as the development corporation's plan suggests, would make it easier for pedestrians to go from the World Trade Center site to Battery Park City, the World Financial Center and the waterfront. In addition, it would create a swath of land above the new tunnel that could be used as a greenspace or for other purposes.

After September 11, although the PATH was out of service, New York City was able to get back in operation very quickly because of our waterways and our ability to offer ferry service to people coming to Lower Manhattan from New Jersey and Brooklyn. Ferry ridership in New York has nearly doubled since September 11.

Ferry service is an incredibly dynamic and adaptable mass transit option and, perhaps, an underutilized one. Now that we have an abundance of ferry terminals, we should figure out ways to make ferry service competitive even after the PATH comes back. If you price ferry service sensibly, I think you will get a lot of converts to commuting by water

In the months since September 11, we have taken steps to help the area rebuild. Now I am hopeful that six years after the tragedy, we will have created an accessible, revitalized and vibrant Lower Manhattan.

Iris Weinshall is New York City commissioner of transportation.

Posted April 29, 2002

Image by Gotham Gazette

We New Yorkers have dueling psyches. We're worried about the state of the economy, but we are also hopeful about the future and excited about the role of government and citizens in making things better. We know that we are in for lean times. But we also believe that some things are too precious to lose.

Among them are New York City's 59 community boards. In his 2010 budget, unveiled last month, Mayor Michael Bloomberg proposed slashing the community boards' budget by 17 percent.

Clearly the mayor has to cut the budget somewhere. But there are three reasons why, despite the fiscal constraints, we need to maintain community board funding at its current level.

First, the 59 community boards are the people's most direct line to city government, the most effective way to participate in discussions about public policy and quality of life issues -- the closest thing to direct democracy that we have in the city. The public's participation in government is becoming increasingly circumscribed, as important decisions on questions like extending term limits for city officials and appointing replacements for U.S. senators are made essentially behind closed doors, by small groups of officials. This makes it all the more essential to preserve New Yorkers' ability to have their say.

Second, the community boards deal with grassroots issues that directly affect the city's disparate neighborhoods. These include questions as varied as affordable housing, school overcrowding, real estate development, noise, sidewalk cafes and liquor licenses. Often, citizens themselves raise these matters and are intimately involved in shaping the recommendations the boards eventually make. In the recent discussions between Fordham University and the city over Fordham's proposed expansion near Lincoln Center, for example, my community board -- Community Board 7 in Manhattan -- was instrumental in addressing citizens' very real concerns about density, parking garages, open space, design approval and the like. We served as a link between the residents and the city.

And last, while New York City's budget is stretched thinner than ever, community boards provide a significant "bang for their buck." Using the mayor's "business" model, the 50- member volunteer boards, each served by just a few city-paid staffers, are pretty lean structures. The average New York community board receives$220,000 a year -- less than the cost of a subway ride for every person it represents. Together spending on the boards accounts for a total of $15 million in a $60 billion budget. The mayor's proposed cuts -- which would be distributed evenly among the boards -- to an already efficient budget would cripple the boards, all but eliminating their ability to function effectively.

Where the Money Goes

Roughly 70 percent of community board spending is on staff and the remainder goes to "other than personnel services" such as rent, office supplies, postage, equipment and repairs. While the community boards would try to take the cuts as carefully as possible, there is little room to maneuver.

More than likely, the cuts will have a significant impact in two areas: They would diminish the boards' ability to develop zoning and infrastructure plans, and to analyze and conduct public review of development proposals. They also would reduce the boards' ability to communicate with and involve residents, businesses and institutions.

The impact of the cuts to community board budgets are further compounded by di minimus historical increases compared to citywide spending. On average, the rate of annual growth for all city agencies is over twice that of the increases to community boards. According to the Independent Budget Office, since 1980 city spending on community boards decreased over time from .04 percent to .03 percent of total annual city funds.

When the mayor says that the 2010 budget imposes the same budget decrease on all city agencies, it does not take into account the fact that, unlike the other agencies, community boards have received no meaningful increases in their budgets since 1980 making it impossible for them to build up a cushion or keep up with rising costs. In fact, with the historic rising cost of supplies and rent, the community boards have already had to significantly trim their budgets every year.

We are at a delicate juncture when the urgent need for savings can sometimes result in too-hasty decisions. President Barack Obama has brought with him a renewed interest in participatory democracy and a desire for transparency in government. People are more motivated to make a difference in their communities, and New Yorkers need their community boards more than ever. Bloomberg must maintain the current funding level for community boards. It's economical and it's good government. What more can we ask for?

Helen Rosenthal is serving her second term as chair of Community Board 7 on Manhattan's Upper West Side. She has been a member of the Board for nearly a decade. Previously, she worked as an assistant director in the Office of Management and Budget during the Koch, Dinkins and Giuliani administrations where she oversaw the budgets of the city's health care agencies. Until the city passed the term limit extension bill, she was a candidate for New York City Council.

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RELATED ARTICLE: Bloomberg's Lament

The mayor calls for job cuts, a higher sales tax, hundreds of teacher layoffs and all-around slashing. How will such a gloomy plan play out in an election year?

Last month, Mayor Michael Bloomberg proposed a $58.8 billion budget that could slash $1 billion from city spending, increase the sales tax by .25 percent (not to mention broaden it to include clothing, hair cuts and more) and seriously lean on Albany and Washington to pitch in billions of additional funding.

So that's his plan. But what would you do?

Bloomberg overturned the city's term limit so he could have a chance to lead the city through this ever-more dreary recession. With our new budget game, BALANCE, you can bypass the City Council entirely and fix our fiscal woes on your own.

Would you increase spending and raise taxes? How about the personal income tax or tolling the East River crossings? Which departmental cuts do you think are the most severe and should be reversed?

Take the reins, but make sure you end balanced or with a surplus. We're not Washington -- we can't run a deficit.

Once you're done, send us the results and we'll report back on how Gotham Gazette readers would balance the fiscal year 2010 budget.

Keep your home page set here, and we'll continue to update you on how the city's real fiscal plan unfolds between now and when our budget must be approved in June.

Play BALANCE now.

Photo (cc) Pete Biggs

Last spring, when Mayor Michael Bloomberg proposed an $8 "congestion fee" to drive into parts of Manhattan, the plan fell victim to several intrinsic weaknesses. Geographical inequity, for one: Manhattan residents and New Jersey drivers would have ponied up a lot less than car commuters from Brooklyn, Queens and Long Island. Lack of ambition, for another: The promised 6 percent drop in midtown gridlock seemed a meager reward for ending free use of city streets and bridges.

But the basic idea is a good one, as experience in London, Stockholm and Milan has shown. Can "congestion pricing done right," as new State Sen. Daniel Squadron has called for, fix the Bloomberg plan's flaws? With a smarter plan, can we make a serious dent in traffic tie-ups that by some estimates cost the city $13 billion a year, while creating so many winners that the plan survives the legislative gauntlet?

What This Plan Would Do

Here's one possibility:

• Replace the mayor's flat $8 toll to drive into Manhattan south of 60th Street with a sliding scale of charges. All cars and trucks trips driving across 60th Street from the north or entering midtown or lower Manhattan via a bridge or tunnel would pay a fee, but it would vary, from $10 during weekday peak hours down to $2 at night and much of the weekend. The charge would be at least twice as effective in unsnarling traffic as the mayor's $8 flat fee yet would average less -- around $6.
• Since all vehicles contribute to congestion, all vehicles pay: no "offsets" for other tolls paid by drivers from New Jersey, no matter how much they paid to cross the Hudson, and no exemptions for "black cars" driven into Manhattan to pick up or drop off their largely well-off clientele. For medallion cabs, which circulate a great deal within the "cordon" without crossing it, a surcharge on fares gives an equivalent effect.
• Dedicate the revenues from the congestion toll and taxi surcharge to eliminate bus fares (which will speed boarding), make trips within the city on Long Island Rail Road and Metro-North commuter trains free (which will help ease subway crowding), and cut subway fares.

This plan originated with Ted Kheel, the lawyer and civic activist who, for the past two years, has sponsored a research program to realize his hope of making car travel more efficient and mass transit more affordable by integrating the two systems. Kheel's foundation, Nurture New York's Nature, has funded development of a computer model -- the "Balanced Transportation Analyzer" -- that predicts how the new tolls and fare incentives will alter commuter behavior and calculates the resulting changes in travel speeds and agency revenues.

The analyzer is firmly grounded in empirical evidence. For example, to calculate how many auto commuters would shift their trip from the 6 a.m. to 9 a.m. morning peak, when the $10 toll would apply, to the 5a.m. to 6 a.m. hour, when the toll would drop to $4, the analyzer draws on data about drivers' actual time-shifting after the Port Authority instituted time-variable pricing in 2001. The same approach lets us estimate that a variable subway fare topped off at $1.50 during the 8 a.m. to 9 a.m. and 5 p.m. to 6 p.m. rush hours and tapering down before and after would cut subway ridership during those two rush hours while increasing it at less crowded times.

The analyzer is now making the rounds of the regional transportation agencies. No less an authority than "Gridlock" Sam Schwartz, the former chief traffic engineer for New York City and the dean of his profession, has pronounced the model "comprehensive, logical and the best I've seen."

Run this new congestion-pricing plan through the analyzer, and the numbers are striking. Charge a 24/7 congestion price varying from $2 to $10 and increase taxi fares by a third, and the resulting revenue could allow the Metropolitan Transportation Authority to halve the average subway fare and make all other transit inside the city, including buses and commuter trains, free. The combined carrot and stick will increase the number of people traveling into the heart of the city while reducing the number of cars. This would improve daytime traffic speeds by an average of 20 percent in Manhattan south of 60th Street and provide sizeable improvements on the approaches from the boroughs and New Jersey.

To be sure, our plan won't cure the inherited MTA deficit. Other proposals have been advanced to do that, such as the one proposed by the Ravitch Commission last fall. A "Kheel-Komanoff" plan, however, could be powerfully merged with a deficit-plugging plan, enhancing it in crucial ways. Indeed, the Ravitch plan, which may be adopted in some form this spring, is fully compatible with our model. The small -- and controversial -- portion of that plan that calls for geographically biased bridge tolls would be replaced by the Kheel-Komanoff universal toll and taxi fee. (Note to residents east of the East River: Under the Ravitch plan, which calls for bridge tolls, alone, you would account for 60 percent of all fees collected. That falls to 36 percent under Kheel-Komanoff, which spreads the burden among more drivers.)

The merged plan could keep the payroll tax Ravitch recommends as well as his calls for greater efficiency and transparency at the MTA. If additional monies are needed to fund the authority's capital budget, these could be drawn from the congestion-pricing pot by deferring some of the drop in subway fares. The provision for free buses should be inviolate, however, because many poorer New Yorkers rely on buses and they are a mainstay in communities underserved by subways.

Our plan benefits everyone, including drivers, who will pay more but get a faster and more reliable commute in return. The biggest beneficiaries may be bus riders. The free fare will not only stretch their paychecks but also speed their trips, since no one will have to stop and swipe a Metrocard to get on board. New Yorkers would see overall time savings running into billions of dollars, not to mention fewer car crashes, healthier air and an improved quality of life.

Mayor Bloomberg, Governor Paterson, MTA Chairman Sander, fellow New Yorkers: That traffic plan you've been waiting for? It's right here.

Charles Komanoff, an independent policy analyst, is president emeritus of Transportation Alternatives and a founding trustee of the Tri -State Transportation Campaign.

GOVERNING THE SCHOOL SYSTEM

The looming expiration of the law giving the mayor control of the New York City school system has prompted an unprecedented discussion on how that system, the largest in the nation, should be run. To add to the debate, Gotham Gazette offers a number of perspectives:

Debating Mayoral Control
What has worked and what hasn't? How could it be improved? A panel of experts weighs in.

Making Joel Klein Behave
by Assemblymember Alan Maisel
The Department of Education promises it will improve, but it continues to shut out parents and others, according to this former assistant principal and current member of the state Assembly. He offers suggestions for how the department could change its ways.

In Charge and Unaccountable
by Councilmember Robert Jackson
The current system has shut out debate and dialogue, leaving the mayor and chancellor answerable to no one as they run a $18 billion department, contends the chairman of the City Council Education Committee.

The Limits of Democracy
by Marcus Winters
While arguing they want to promote more democracy, opponents of mayoral control seek changes that would return us to the bad old days when no one was responsible for the schools, a senior fellow at the Manhattan Institute argues.

Beyond Governance -- Creating a Constitution for City Schools
by Josh Karan
Governance issues are important but only go so far, according to this member of the Parents Commission on School Governance. To achieve excellence, he says, we need a constitution for out city's schools.

* * * * * * * *

Also, for reporting on the issues in the debate over mayoral control, see these articles from Gotham Gazette:

The Mayor's High Stake test, including a rundown on the various key reports on school governance

Choosing Side in the Fight Over Schools

A Battle Brews Over Who Controls the Schools

While legislation giving the mayor control of the city schools had laudable goals, over the past seven years, Mayor Michael Bloomberg and Chancellor Joel Klein have demonstrated an alarmingly expansive interpretation of their own powers. Under mayoral control, government transparency has been a scarce commodity, and the Department of Education has operated like a tightly controlled bunker that excludes parents and lawmakers from most meaningful participation.

New York City's children and parents suffer the consequences of this unfettered mayoral control. Thousands of police personnel patrol city schools with little oversight or accountability. In March 2007, police personnel handcuffed and arrested 13-year-old Chelsea Fraser in front of her Dyker Heights classmates. Her crime? Writing the word "okay" on her desk. In January 2008, Denis Rivera, a 5-year-old kindergarten student was handcuffed for throwing a temper tantrum in his kindergarten class.

Principals are not immune from falling victim to the consequences of unfettered mayoral control. East Side Community High School Principal Mark Federman was arrested for pleading with police to not parade a handcuffed honor roll student in front of her classmates.

Despite these abuses, the mayor and the department refuse to create rules governing police behavior in the schools, citing mayoral control as the reason. Children and parents are left to wonder who's in charge of school discipline: the principal or the police?

Bullying based on sexuality, ethnicity and religion continues to be a major problem. According to the Department of Education's own survey, 76 percent of middle and high school students reported seeing students "threaten or bully other students at school." The City Council passed the Dignity in All Schools Act in 2004 to address this, yet the mayor has refused to fully enforce the law, claiming that the City Council has no authority over the Department of Education. Our children pay the price for this. Osama al-Najjar, a student at Tottenville High School in Staten Island, plunged into a deep depression and tried to commit suicide because he was incessantly called Osama bin Laden. Harpal Singh Vacher, a Sikh freshman at Newtown High School in Elmhurst, was attacked, wrestled to the ground and had his hair cut off by another student.

The New York Civil Liberties Union, where I am advocacy director, recently documented these failures in a report on civil rights and civil liberties under mayoral control. We drew lessons from our experiences in the schools to suggest ways to improve the school governance system and protect the safety, well-being and constitutional rights of students.

The NYCLU does not take a position on whether to renew mayoral control. We do not take a position on whether the mayor should be able to appoint a majority of Panel for Educational Policy members or whether the mayor should have sole authority to appoint the chancellor. But we hope that, in the debate over the renewal of mayoral control, state lawmakers concentrate on how our school governance system operates: Does it invite abuse of power? Does it embrace democratic principles? Is it the best system to educate, prepare and protect our youth?

Opening the System

Whether it approves extending mayoral control or not, the Legislature must ensure that our schools do not continue to operate through unchecked executive authority, excessive secrecy, and blocks to public participation and oversight. By taking steps to ensure greater transparency and accountability, the Legislature can satisfy both those who support and reject mayoral control.

First, the department cannot continue to operate as its own autonomous agency. It must be clearly defined as a city agency subject to the authority of the City Council, comptroller, public advocate, city charter and city laws, which ensure transparency and oversight.

Second, there must be an empowered board of education. Regardless of whether the mayor appoints the chancellor and a majority of members to the Panel for Educational Policy, which replaced the board, students, parents and educators would all benefit from a strong panel. The law already requires that the panel approve education policies. Now it must be strengthened to require that the chancellor submit all new citywide policies and practices that affect student achievement for the board's approval.

The authority to appoint members should be distributed among all citywide elected officials and the City Council. And in order to avoid undue influence on members and encourage thoughtful debate, panel members should serve fixed terms and elect their own chair.

Third, the parental voice in policymaking must be strengthened. The Community Education Councils and citywide councils must have responsibilities and authority that ensure parental involvement in the setting of education policies. The community and citywide councils' authority should be expanded to include approval of district school safety plans, the opening and closing of schools, and other district-specific policies.

Fourth, school safety practices must be brought in line with education policy. The police department plays a unique and expansive role in the city's schools. As the number of police personnel in the schools has increased to a whopping 5,200 agents, the ability of educators to oversee school safety and student discipline has decreased. The number of school safety agents and police officers has increased by 44 percent since 2002, making the police department's school safety division the fifth largest police force in the country. Houston, with a population of 2.2 million residents, has fewer police officers on the streets than the number of New York City police personnel patrolling New York City's million schoolchildren. Yet educators, who have experience maintaining a nurturing learning environment, have little oversight over police employees in schools. The New York state and city education departments must have clear authority to oversee all school safety practices, including police department activities.

Fifth, the public must be engaged in the decision making process. All Chancellor's Regulations -- which promulgate a wide range of policies, from admissions standards to the process for selecting parent council members -- must be subject to a public comment period. The police department does not finalize regulations without a public comment period, and neither should the Department of Education. The board or Panel on Educational Policy also must open its policymaking and adjudication process to the public, and ensure that parents are welcomed to and informed about its meetings.

Sixth, we need transparency. The education department must end its practice of withholding from the public raw data on student performance, including student safety issues, and must meet its legal obligation to give the public access to records. For example, the department has failed to provide the public with raw data on who is getting arrested in our schools, why children are leaving school without graduating, and who is getting suspended and for what. Without access to such information, the public cannot determine whether the city's educational environment is truly improving. To allow for an independent assessment of the department's data, the Independent Budget Office must have authority to report on the education department's performance, as it does on other city agencies.

Seventh, the legislature must create an Office of Inspector General to conduct independent audits and investigations into Department of Education practices. The inspector general should investigate systemic problems that affect the educational environment. For example, the inspector general should look into whether the dramatic increase in the number of police personnel in the schools has had a negative impact on the educational environment.

Finally, the legislature must allow the law to sunset again in seven years. The debate over the best school governance structure for our children has led to passionate discussions among policymakers and the public and a renewed interest in city schools. Whichever system the legislature chooses, it must expire, allowing for a continuous public debate.

The current regime of mayoral control is incompatible with a transparent and accountable educational environment. The legislature must address the lack of checks and balances and close legislative loopholes that have allowed a secretive and unaccountable Department of Education to flourish.

Udi Ofer is advocacy director of the New York Civil Liberties Union and author of the report.

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For More on Helping New York's Economy

Paying Attention to Cities By Jonathan Bowles
After years of federal policies neglecting urban areas, Barack Obama has sent some encouraging signals that he understands their importance. Certainly, New York could use a helping hand. The director of the Center for an Urban Future lays out some ideas for what the president could do to aid New York.

Using the Crisis to Prevent the Next One By J. Mijin Cha
The current turmoil can help us reduce our dependence on Wall Street and create good "green collar" jobs that help fuel a resurgence of the middle class. The director of campaign research at the Urban Agenda explains how.

Infrastructure Investments that Make Sense By Carter Craft
As big as the stimulus package may be, the country has to invest the money wisely. An urban planner offers some novel ideas for New York projects -- from recycling grease to ferries for freight.

From Gas-Guzzling Cars to Clean Buses By Charles Stone
Simply lending funds to struggling auto companies won't spur economic growth. Instead, an economist suggests, the government should create a voucher program to deploy the resources of the auto companies, spur investment -- and help the environment.

Previous Articles
A Federal Stimulus for City Parks By Anne Schwartz
Advocates hope that President Obama and Congress will recognize that funding parks would not only improve the quality of life and the environment but also spur investment and raise real estate values.

Stimulus Money: The Downturn's Silver Lining? By Graham Beck
The stimulus package could offer more federal funds for transportation projects. The MTA is making its list, but there are sure to be lots of restrictions -- and competition.

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The version of the American Recovery and Reinvestment Plan unveiled on Jan. 15 by House Democrats is breathtaking in its scope and cost. Intended to retain and create 3.7 million jobs over the next two years, the $825 billion package of federal government investments includes dozens of spending measures ranging from $200 billion in fiscal relief to help state and local governments, to $6 billion to extend broadband to rural areas, a 21st century version of Depression-era rural electrification. Two thirds of the total value consists of spending, with one third for tax cuts.

Negotiated with President Barack Obama's transition team, the plan - a.k.a. Stimulus II or ARRP - is an important first step to halt the downward economic spiral triggered by last fall's financial meltdown. As large as it is, though-5 percent of gross domestic product-it is not sufficient to create a sustained recovery. Two other steps are essential. First, more dramatic action is needed to put the brakes on the collapsing housing market. Second, making a recovery sustainable will require a set of policies to lift wages and bolster the middle class. Without these two complementary steps, ARRP might provide temporary relief for our economic illness but not a cure.

Helping the States

Whatever its limitations as a long-term solution, ARRP will provide much-welcome short-term budget relief for New York and other states (45 states face budget gaps). The plan will increase the federal share of Medicaid spending and provide billions in education aid to states and school districts. Both of these measures will help to moderate the severe budget cuts proposed by Gov. David Paterson. New York State should receive upward of $10 billion - and possibly as much as $15 billion - over two years -- funds that will help close the state's budget gaps. Such federal relief will help states maintain their spending and prevent spending cuts or tax increases, both of which would have intensified the downward economic spiral.

Help for a Teetering Economy

A year ago, Congress and the Bush administration agreed to a $150 billion stimulus package that consisted largely of tax rebates. Most economists now agree that last year's stimulus was not up to the task because tax cuts provide less "economic bang for the buck" than most other forms of stimulus. Economic forecaster Mark Zandi, a former advisor to presidential candidate John McCain, estimates that every dollar in tax cuts generates only $1.01 in economic activity, much lower than the spending impact of increasing unemployment compensation ($1.63), state fiscal relief ($1.38) or spending on infrastructure ($1.59). Also, since the tax rebate checks were sent out in May and June, when gasoline prices were skyrocketing, many recipients spent the money to cover their gas costs.

The magnitude of a proposed second stimulus has mounted steadily since last September's financial market meltdown and the ensuing sharp collapse in the consumer spending that accounts for 70 percent of demand in the economy. The spending collapse was compounded by a credit market freeze as Wall Street firms and banks confronted a mountain of bad debts created by high-risk lending and unregulated gambling. The crash of the housing and stock markets destroyed literally trillions in home equity and retirement savings held by millions of middle class households. Along with steadily mounting job losses, this caused households to sharply reduce spending. The collapse of consumer spending is thought to have pulled GDP down by as much as 5 percent during the fourth quarter of 2008.

It is no exaggeration to say that this is the worst economy since the Great Depression. The 2.6 million jobs lost in 2008 were more than in any year since 1945. Overall unemployment could be 9 percent by the end of the year and 11 percent in 2010 in the absence of the recovery plan, according to economist Zandi. Already, unemployment among adult black men is 13.4 percent. Housing prices have fallen 25 percent on average. There were 2.25 million home mortgage foreclosures last year, and one out of every six homeowners owes more on their mortgage than their house is worth.

What Stimulus II Would Do

The proposed American Recovery and Reinvestment Plan is a 21st century version of a government-led recovery and investment program, combining some of the best elements of the Depression-era Works Progress Administration, the Eisenhower era commitment to build the Interstate Highway System, the Apollo Project, and the Great Society. The plan includes spending that will not only provide some short-term stimulus but will increase the long-term productive capacity or efficiency of the economy.

One of the biggest components is $52 billion for various "green jobs" programs from weatherizing public buildings (see related story) and homes to reduce energy demand, to developing a "smart" electric power grid that is both more reliable and better able to transmit clean, renewable energy.

The package would also create jobs by spending $67 billion for infrastructure. Because of the urgent need to boost jobs as quickly as possible, it emphasizes "shovel ready" projects, including mass transit systems, highways, bridges, airports, national parks, water and sewer systems, flood control, and environmental cleanup. The Metropolitan Transit Authority will be able to use some of these monies to fund some of the construction projects and equipment needs in its capital budget. Governor David Paterson submitted an extensive list of 1,922 "ready-to-go" projects to the Obama transition team.

This second stimulus package provides $12 billion to support forward-looking research and development investments that could be particularly important in the future, including biomedical, climate change and alternative energy research, and funds to modernize and expand government and university research facilities.

The ARRP includes $5 billion for job training and employment services, including $1.2 billion to create 1 million summer jobs for youth. It offers additional -- and substantial funds -- for worker training and education as part of the education, healthcare, and science and technology initiatives. There is $5 billion for early childhood development, including additional slots in subsidized childcare and Head Start.

A particularly critical part of ARRP is aid to the unemployed. The program includes $36 billion to extend and modestly increase unemployment benefits, and incentives to encourage states to expand unemployment insurance coverage for low-wage and part-time workers. An additional $30 billion would subsidize health coverage for unemployed workers and provide 100 percent federal funding (i.e., dropping the requirement for a state match) for two years for Medicaid-eligible workers who become unemployed.

Nearly $30 billion would go to increase food stamps, low-income heating assistance, assistance provided under federal Supplemental Security Income, aid for the homeless and Temporary Assistance for Needy Families block grants. A total of more than $11 billion would fund repair and modernization of public housing, help communities build and rehabilitate low-income housing using green technologies, and enable communities to purchase and rehabilitate foreclosed and vacant properties.

Stimulus II and New York

New York's unemployed workers, their families, the state government and local governments and the broader New York economy will benefit significantly from this much-needed and unprecedented economic recovery plan. New York, though, must make sure that the billions of federal dollars it will receive for infrastructure, energy development and other projects lead to the creation of good jobs that provide decent wages, benefits and career development opportunities. This plan also presents New York with a golden opportunity to develop a strategic plan to revitalize the upstate economy and help the downstate economy adjust to a permanently smaller role for the finance sector.

Stopping the Housing Collapse

The Obama team has suggested ways to use some of the remaining funds from the $700 billion Emergency Economic Stabilization Act, the so-called "bailout" that was passed in early October, to address the housing crisis. In a Jan. 15 to Congress, Larry Summers, who is to be director of the National Economic Council, indicated the new administration would commit $50 billion to $100 billion to "reduce the number of preventable foreclosures," reform bankruptcy laws, revamp the modest Hope for Homeowners program, and require banks receiving bailout assistance to "implement mortgage foreclosure mitigation" programs.

These measures can only help but may well not be sufficient to ensure that banks renegotiate mortgages on the scale necessary to halt the slide in housing prices. Until that happens, housing prices may fall further and the value of the mortgages and mortgage-backed assets that dominate the balance sheets of the major financial institutions will remain questionable. Investor's suspicions about the "toxicity" of these assets have paralyzed credit markets for most of the past year.

Originally, the $700 billion financial "bailout" was supposed to take those toxic assets off the hands of the banks, under the Trouble Asset Recovery Program or TARP. Some of the remaining $350 billion could be used for this. Now, though, the incoming Obama administration appears to be considering whether to provide another round of massive funding ($1 trillion or more) to salvage bank portfolios.

Given the magnitude and character of the federal interventions so far, the banking system already has been effectively nationalized and is "private" in name only. While the government has allowed bank executives to remain in control, at some point, Washington leaders will have to decide whether taxpayers might be better served by completing the nationalization of the banking system rather than trying to revive banks that have impaled themselves on massive amounts of toxic assets. To date, the overall magnitude of taxpayer resources pledged to financial market rescue can only be described as "galactic" -- $7 trillion to $8 trillion in capital infusions, low-interest loans and federal guarantees.

Boosting the Middle Class

Along with the dual collapse of the housing and financial markets, the middle class squeeze played a major role the current economic precariousness. Wages have not kept pace with productivity or with the health and retirement security costs employers have shifted to workers. As a result, the average working family has been forced to take on substantial home equity or credit card debt in recent years to try to maintain living standards. The absence of a firm foundation for middle class prosperity meant that economic growth from 2003 to 2007 was possible only because of the economy's bubble tendency and the excessive reliance on borrowing at every level.

Boosting the middle class through higher wages and increased economic security involves such things as passage of the Employee Free Choice Act that will remove barriers imposed by the current labor law system that frustrate workers' efforts to join unions.

The American Recovery and Reinvestment Program is an essential step for the U.S. to take in pulling the economy out of this historic slump. As the House leadership's version of ARRP is negotiated in the House and with the Senate, it is critical that the provisions aiding states and low-income populations remain the centerpiece and that any business tax cuts be limited. To achieve a balanced and long-lasting prosperity, however, other actions will be needed to resolve the housing crisis and to rebuild the middle class. Without such policies, the recovery and reinvestment plan might create a short-term rebound but one that will fizzle out after two or three years.

The new administration gives every indication that it is aware of the need for these complementary actions. Time will tell whether it can achieve initial success on the economic recovery front and build the political support to turn recovery into sustained prosperity.

James Parrott is deputy director and chief economist of the Fiscal Policy Institute. He has been studying and writing about the New York economy since he landed in New York City a quarter century ago.

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For More on Helping New York's Economy

Paying Attention to Cities By Jonathan Bowles
After years of federal policies neglecting urban areas, Barack Obama has sent some encouraging signals that he understands their importance. Certainly, New York could use a helping hand. The director of the Center for an Urban Future lays out some ideas for what the president could do to aid New York.

An $825 Billion First Step By James Parrott
The stimulus package proposed by Congress is key to halting the economy's downward spiral but it will not solve all our problems. Economist James Parrott of the Fiscal Policy Institute looks at what the package would do -- and what more needs to be done.

Using the Crisis to Prevent the Next One By J. Mijin Cha
The current turmoil can help us reduce our dependence on Wall Street and create good "green collar" jobs that help fuel a resurgence of the middle class. The director of campaign research at the Urban Agenda explains how.

From Gas-Guzzling Cars to Clean Buses By Charles Stone
Simply lending funds to struggling auto companies won't spur economic growth. Instead, an economist suggests, the government should create a voucher program to deploy the resources of the auto companies, spur investment -- and help the environment.

Previous Articles
A Federal Stimulus for City Parks By Anne Schwartz
Advocates hope that President Obama and Congress will recognize that funding parks would not only improve the quality of life and the environment but also spur investment and raise real estate values.

Stimulus Money: The Downturn's Silver Lining? By Graham Beck
The stimulus package could offer more federal funds for transportation projects. The MTA is making its list, but there are sure to be lots of restrictions -- and competition.

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With the Obama team taking office and the Senate formally introducing the American Recovery and Reinvestment Act of 2009, momentum is building for the stimulus package. But with Americans taking a dim view of the bank bailout only months after it was approved, Congress and the new administration must ensure the stimulus bill really solves the problems. America needs more than an $875 billion morning-after pill for our fiscal difficulties: We need to redefine our infrastructure.

New York City offers a number of possibilities for the kinds of projects the stimulus package could fund. Here are some examples in three key areas.

ENERGY

With its dense population and old electricity transmission grid, the Northeast cries out for energy investment. As a large coastal city, New York offers a good road map to what many cities need: access to more renewable sources and investment in pathways and transmission to fix our failing grid.

Recycle Grease

President Barack Obama's proposal to "spend $150 billion over 10 years to advance the next generation of biofuels and fuel infrastructure" could help New York recycle the millions of gallons of waste grease generated in its nearly 1,000 school cafeterias, more than three dozen hospitals and scores of City University sites. Reclaiming this grease could create jobs and help power transit and school buses, ferries and much of the municipal vehicle fleet.

Investing in Wind

The more than 8.5 million residents on geographical Long Island (including Brooklyn and Queens, as well as Nassau and Suffolk counties) are precariously linked to the North American grid. Queens has suffered two major blackouts in the last five years. Yet, so far the whole island has done little to tap the resource of offshore wind.

As "Cape Wind" proposes, Queens, Brooklyn and the rest of New York City should be a primary beneficiary of large-scale investment in wind power. In addition to the massive construction needed to build and install the windmills, the investment in new and more reliable transmission capacity would boost places like Oak Point in the Bronx, making them a focal point of next generation of infrastructure.

Freight Connections

Nestled between Port Morris and Hunts Point, Oak Point is across the water and a bit northwest of LaGuardia Airport. This area of the Bronx is already the site of a number of key connections between Long Island and the continental United States, including the Triboro and Hell Gate Bridges and underwater transmission cables linking the Bronx and with power plants in Queens.

Now Oak Point could become a focal point for new Cross Harbor Freight Transportation investments under consideration by the Port Authority.

This underutilized railroad yard has been trapped in political fighting for more than a decade, but it should become a waterfront rail hub that could serve as a national model for other urban areas.

On the shore, it could include a barge-to-rail transfer facility for trucks, containers, and ferries to North Brother Island and even to Lower Manhattan. Below ground, power tubes and transmission lines would better connect Long Island and the rest of North America. This would help avoid the energy supply interruptions that hit seven states in 2003 and the grid failures that caused the Queens blackout of 2006.

A real infrastructure plan would build in redundancy and leave extra capacity for the next generation of communications and energy innovation.

MOBILITY

The stimulus package calls for the creation of a National Infrastructure Reinvestment Bank, seeded with $50 billion over its first 10 years. A number of major arteries in New York City could be models for using these funds creatively.

Connecting Brooklyn to the World

Atlantic Avenue is a critical transportation link whose best days lie ahead. As Brooklyn Heights slides down to Red Hook, the avenue's 19th century rowhouses are still home to many small businesses and residents. Buses running along this busy corridor connect downtown Brooklyn to the waterfront.

Atlantic Avenue ends at Upper New York Bay. Across the harbor, lie the huge towers of Lower Manhattan and Jersey City. Atlantic Avenue could help link those centers and downtown Brooklyn and Long Island. Historic street cars could connect the New York City Transit Museum with Brooklyn Bridge Park.

Ferries for Freight

With the Brooklyn Queens Expressway overhead, the foot of Atlantic Avenue could serve as a hub for cross-harbor shipping via truck ferry or barge to New Jersey ports. An all-water connection to Long Island from New Jersey would mean fewer trucks rumbling across Canal Street or the Staten Island Expressway.

With major rehabilitation planned for the Brooklyn Bridge in 2010, more traffic will use the already overburdened Manhattan Bridge. Plans to begin construction on a new Goethals Bridge in 2012 may also exacerbate congestion woes.

While a truck ferry may be somewhat expensive to operate, it could offer more consistent travel times than jammed road bridges. That means lower costs for fuel, fewer noxious truck emissions, and less wear and tear on bridges and highways.

If the vision for better mobility along the East Coast includes a network of freight ferries (often called "Short Sea Shipping") dozens of new ferry and barge transportation hubs will need to be created at places like 58th Street in Brooklyn along Newtown Creek in Queens and even 34th Street in Manhattan.

EMPLOYMENT

Infrastructure may be the backbone of development, but the muscle is all labor. While contractors and builders lobby for expansion and upgrade of bridges, highways and waterfronts, large-scale physical development takes time to ramp up. In the meantime, the glut of office space only grows as its value shrinks. But it doesn't have to be this way.

Cubicles to Classrooms

A labor force must be nourished with education and training. Professional, technical and vocational skills are all needed. In New York schools scramble for space.

So, let's convert commercial buildings into educational facilities. What once were offices can become classroom. Former trading floors can be school auditoriums.

The stimulus plan seeks to invest in "green technologies" such as energy efficiency, weatherization and renewable energy development. We could jumpstart the innovation by giving owners of private buildings grants to cover some portion of their retrofit costs, provided these buildings are adapted for schools that will provide related instruction, research and training.

Preparing for the New Economy

While it may take a while for Americans to get back to work, let's make it easy for them to go to school in the meantime, with grants and loans for promising fields of study. Labor unions and small businesses could receive payroll tax credits or grants to create or expand apprenticeship programs. After all, there is a good chance that the labor force we need 10 years from now may look very different than the one we have right now.

PAYING FOR IT

The stimulus will succeed only if it brings new funding mechanisms, both to seed its programs and to help maintain our public infrastructure and public institutions for the future.

With the sharp decline in gas prices, there is no better time to increase a federal tax on fuels to help fund the stimulus and better maintain our infrastructure in the future. According to the Energy Information Administration, U.S. cars and trucks consume close to 390 million gallons of gasoline per day. Every 15-cent a gallon increase in the federal gas tax would generate $20 billion in revenues a year. With a 50-cent tax increase, we could generate well over $600 billion in the first 10 years. After the stimulus is paid off, we could start to repeal the tax.

Ultimately our infrastructure isn't just concrete and steel embedded. It is also the power we generate and the people who keep it all moving forward. Together they enable us to enjoy one of the highest standards of living in the world. To keep that, though, requires hard work. And because our infrastructure has been so neglected - even in the good times - we have to be especially careful about the investments we make in the years ahead.

Carter Craft, a licensed U.S. Coast Guard captain, is an urban planner working in the private sector.

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For More on Helping New York's Economy

Paying Attention to Cities By Jonathan Bowles
After years of federal policies neglecting urban areas, Barack Obama has sent some encouraging signals that he understands their importance. Certainly, New York could use a helping hand. The director of the Center for an Urban Future lays out some ideas for what the president could do to aid New York.

An $825 Billion First Step By James Parrott
The stimulus package proposed by Congress is key to halting the economy's downward spiral but it will not solve all our problems. Economist James Parrott of the Fiscal Policy Institute looks at what the package would do -- and what more needs to be done.

Using the Crisis to Prevent the Next One By J. Mijin Cha
The current turmoil can help us reduce our dependence on Wall Street and create good "green collar" jobs that help fuel a resurgence of the middle class. The director of campaign research at the Urban Agenda explains how.

Infrastructure Investments that Make Sense By Carter Craft
As big as the stimulus package may be, the country has to invest the money wisely. An urban planner offers some novel ideas for New York projects -- from recycling grease to ferries for freight.

Previous Articles
A Federal Stimulus for City Parks By Anne Schwartz
Advocates hope that President Obama and Congress will recognize that funding parks would not only improve the quality of life and the environment but also spur investment and raise real estate values.

Stimulus Money: The Downturn's Silver Lining? By Graham Beck
The stimulus package could offer more federal funds for transportation projects. The MTA is making its list, but there are sure to be lots of restrictions -- and competition.

---

"What is good for GM is good for the country!" -- once the battle cry of U.S. capitalism is now a mumbled query that sounds something like, "What is good for the U.S.? What is good for GM?"

As America's auto manufacturers deal with the largest financial crisis in their history, officials are focusing on how to keep the industry afloat regardless of brand. Hence, the catchphrase, for some, now goes: "What is good for the automotive industry is good for America -- with or without GM."

America needs large scale investment by the federal government that will promote sustained development of public services and private enterprises. Simply lending funds to distressed companies, such as General Motors and Chrysler, to keep them operating will not stimulate economic growth. An innovative program of vouchers to promote mass transit, especially the manufacturing of clean and green buses, would spur investment while saving jobs and helping the environment.

The Recession and Transit

Deteriorating economic conditions in the region have put New York's Metropolitan Transportation Authority in a financial bind. A December report on MTA financing by the Ravitch Commission, named for its chairman, Richard Ravitch, said the situation has become "calamitous."

The MTA faces significant gaps -- of a billion or more -- in its operating budgets for each of the next four years.

By law, the authority's budget must be balanced, meaning it has proposed substantial fare increases, major service reductions, lowering administrative costs, personnel cuts, longer maintenance cycles and an interagency loan.

Uncertainty about the MTA's funding creates uncertainty among the suppliers of the equipment the authority buys. Uncertainty about the capital projects the MTA can fund compounds the already severe uncertainty that investors have. This is exactly what the U.S. economy does not need right now.

Keep in mind that New York's population of 8.2 million is expected to grow to 9.2 million by the year 2034. The Ravitch report, while not advocating specific capital projects, argues for an expanded bus system based on Bus Rapid Transit, which attempts to move passengers more quickly and comfortably through a system of buses-only lanes and other improvements. "Expanding the bus network is the only realistic approach," the commission said.

Clean buses that operate in a rapid transit mode will be the key to the commercial viability of the New York region. The problem is finding the money to purchase them.

Bus Benefits

To help surmount this obstacle, I suggest the federal government issue $25 billion of Clean Fuel Vouchers that municipal and state authorities could use to buy cleanly powered buses over the next five years.

The $25 billion figure is a quick calculation of what it would cost to replace the 64,350 gasoline powered transit buses on the road at the end of 2006 with alternative fuel buses, with $500,000 as the cost of each new bus. Twenty-five billion dollars over five years ($5 billion per year) would be a significant increase in the slightly more than $1 billion nationwide the Federal Transit Administration has currently budgeted for capital spending on transit buses.

It also would build on an existing commitment by federal, state and municipal governments. Between 1995 and 2006, the number of transit buses using alternative fuels increased from 2.8 percent to 16 percent. In its 2009 budget, the Federal Transit Administration said it is "striving to increase by 2 percent per year the deployment of energy efficient and low emission technology vehicles in the transit industry." This kind of fiscal stimulus package would significantly ramp up the 2 percent growth in clean fuel buses on the road.

As of 2007, about 21 percent of transit buses operating in New York City were powered by either compressed natural gas or diesel/electric. The MTA's proposed capital program calls for the purchase of 2,492 new buses. Of those, 1,544 will use clean fuel technology.

A commitment to these buses would create investment opportunities for manufacturers and jobs for the unemployed.

Nationally, the voucher program would employ autoworkers and activate plants now idled by a precipitous drop in car and truck sales. It would spur banks to loan money for mass transit production. Replacing diesel powered buses with hybrid/electric ones or vehicles fueled by compressed natural gas also would reduce carbon monoxide and nitrogen oxide emissions.

The Voucher Market

This is how the voucher plan would work: Transit authorities would receive vouchers they could use to buy clean fuel transit buses within five years. Once a transit authority places the order for a bus, the voucher would be pledged to the bus manufacturer. The bus manufacturer could use the vouchers as very high quality collateral to raise working capital during the production stages.

The vouchers could also be bought and sold. If the MTA, for example, decided it valued operating income over an expansion of its clean fuel bus fleet, it could sell some or all of its vouchers. Because the vouchers would be federal obligations, there is no risk they wouldn't be honored.

Once sold, the voucher could be used for any hybrid/electric, electric or fuel cell vehicle, not only transit buses. Those buying the vouchers might be other municipalities, rental car companies, taxi fleet operators, trucking companies, equipment-leasing companies, and school bus operators. The secondary market for vouchers would help those governments that cannot effectively use their vouchers. It also would broaden the fiscal stimulus while keeping it focused on demand for automotive products.

Good for General Motors

The vouchers will create a flow of private capital to the sector of the automotive industry that designs, builds and maintains green machines. This could help General Motors.

Why does that matter? The survival of many firms is linked to GM's ability to buy and pay for the goods and services they produce. GM, Ford and Chrysler currently owe about $60 billion to their suppliers. Not only must these receivables be secure, but suppliers must be able to expect timely payment for future sales to the auto companies. Trying to stimulate the U.S. economy while the core of our manufacturing base is in financial distress would be like bailing out a leaking ship with a Dixie cup.

GM has valuable technologies, products, designs, processes and patents along with engineering talent and a skilled labor force. Unfortunately, all of this is trapped in an ossified enterprise. For the company to survive, these assets must be redeployed.

When an earthquake destroys cities and villages, governments around the world mobilize resources to save lives and rebuild wells, schools and hospitals. A financial quake has struck and now is the time for a massive financial lift. To emerge from this worsening global recession each of the world's economically powerful countries must make a commitment to invest significant public funds in sustainable development.

A massive investment in clean fuel mass transit would be consistent with stimulating the U.S. economy, improving air quality, lowering urban road congestion, increasing opportunities for mobility in and outside of the cites, and making U.S. cities the premier showcase for green urban transit. Vouchers can help accomplish that. At the same time, they will increase demand in a key sector of our economy.

Charles A Stone is a professor of finance at Brooklyn College.