Andrew Cuomo, the newly elected Governor of New York, faces the challenge of reviving the upstate economy, addressing a structural deficit and convincing entrenched interests, especially public sector unions, to join him in an effort to reform state government. I think a focus on green infrastructure investment and the development of a green economy should be at the heart of his strategy. But in contrast to President Obama, Governor Cuomo must immediately work to project a dynamic, highly visible, and intense series of green economic initiatives. The goal of these initiatives will be building confidence and creating the image of a state open and ready for sustainable business development. The cautious political campaign he ran to become Governor needs to be replaced by a more aggressive political and governing campaign to transform the state.

Cuomo must be the State’s constant cheerleader and salesman for the new green economy. He must take his act on the road and sell the state to new employers. He needs to transform one of those useless state authorities that does very little into a non-profit State Green Economic Development Corporation, with the goal of attracting and retaining business to our upstate cities. This organization will cut red-tape, package tax incentives, subsidize government built infrastructure and do what is needed to attract and retain business.

With conservative governors in Ohio and Wisconsin threatening to turn back federal funding for high speed rail and New Jersey’s Governor rejecting federal funding for a rail tunnel between New York City and New Jersey, Cuomo has decided to go after federal high speed rail funding. His vision of high speed rail between New York and Montreal and New York and Toronto makes sense. Connecting upstate New York with these important Canadian cities and economic power houses can be one element of the economic revival of upstate New York. High speed train service between New York City and Albany could have a similar impact. It is true that the economics of train travel are not as favorable as busses travelling on interstates, but congested air and highway travel make high speed rail an important element of a region’s transportation system. Moreover, high speed rail demonstrates we plan to be serious competitors in the global economy. It helps create the image of a state engaged in the future. It is critical that New York project a n image of dynamism, ambition and purpose.

Not only should our new Governor go after the federal high speed rail money, he should try to grab the federal train tunnel subsidy his short-sighted colleague from New Jersey just turned down. He should use it to help fund a new auto, truck and train bridge to replace the Tappan Zee. Instead of New Jersey reaping the economic benefits of better access to New York City’s central business district, let’s bring those benefits to Rockland and Orange Counties- the New York City suburbs with the worst mass transit service in our region.

Investments in mass transportation infrastructure influence development patterns and can help reduce the environmental impact and cost structure of land development. Investments in highways lead to dispersed patterns of development, while mass transit tends to encourage higher density development close to transit stations. They also raise the value of nearby homes now closer to downtown jobs and commerce. Importantly, as cities compete in the global marketplace for businesses and residents, ease of transport between and within cities will be a critical element in determining the winners and losers. American cities and suburbs mired in traffic jams may come to regret their over-reliance on auto transport.

The new Governor not only must deal with the new demands of entrenched interests, but he must address the legacy of those interests: the large structural deficits that make investment in infrastructure or anything else a profound challenge. He is correct in going after federal money for infrastructure. However, those subsidies are always partial and more money will be needed. When generating new capital, the new Administration needs to avoid the tendency by the past several governors to fund infrastructure through poorly funded debt. It is not borrowing per se that is the problem. In fact, a piece of infrastructure that has a useful life of three decades can be financed over that period of time. The issue is the nature of the revenue stream that is used to pay back the cost of the infrastructure investment. The payback must be based on the increased wealth and nonmonetary benefits generated by the investment. Some of the benefits may be the indirect impact of clean air, water and fewer traffic jams. Some of the benefits of rapid mass transit may be the increased property values of land that is now “closer” to the central business district. The revenue stream used in New York to payback transit improvements has relied too heavily on the fare box, instead of other sources such as congestion fees, tolls and business taxes. These are unpopular sources of revenue, but investments in the future do not come for free.

In addition to investments in transit, the state must do everything it can to attract private investment in the green economy that is now being built. It starts with energy efficiency: insulation, smart grid technology, public vehicle recharge stations, energy audits and large scale reduction of wasted energy. Energy efficiency policy can and has been pushed at the state level. The current tax that all New Yorkers pay on power is now funding $500 million in energy efficiency work each year. It can be coupled with a state feed-in tariff policy,guaranteeing that small scale renewable energy generators obtain access to the grid and a fixed, long term price for the power they generate. This will encourage the development of renewable energy. Renewable energy investors need protection from the current boom and bust cycle in fossil fuels. An economic development program focused on energy and mass transit can create jobs in New York right now and make the state more attractive business venue in the coming decades.

While visionary investments are needed, so too is an attack on the cost structure of nursing homes, health care, education, public sector pensions and overlapping and inefficient government jurisdictions and public authorities. New York is no longer rich enough to afford the expense and inefficiency of its public sector. A more effective and efficient government is needed to ensure that services to the most vulnerable New Yorkers are maintained as we reshape the state for a new era of economic growth.

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