Sooner or later, New York will recover from the physical effects of this week’s super-storm, just as it did from the cataclysm of 9/11. But as the focus shifts from emergency response to long-term recovery, state and local officials will find themselves grappling with budgetary challenges in some ways even more daunting and complex than those created by the destruction of the World Trade Center.

Gov. Cuomo has estimated New York’s state and regional “economic revenue loss” from Sandy at up to $6 billion. While that figure is below most estimates of 9/11’s immediate impact, the storm’s massive physical destruction and economic disruption obviously has been much more widely dispersed throughout the metropolitan area.

And unlike the man-made calamity at Ground Zero, this week’s natural disaster damaged or destroyed numerous state and local government facilities all over the region — including parks, offices and health-care institutions, plus subways, rail lines, tunnels, highways, streets and airports.

Cuomo wants the feds to pick up 100 percent of the Sandy disaster-relief costs — as they did (for the first time ever) after the World Trade Center attack 11 years ago. He can make a strong case that, compared to where things stood in 2001, New York is not nearly as well positioned to deal with a disaster on this scale.

But then again, neither is the federal government.

In the fall of 2001, the nation was just entering what would be a mild recession after the prolonged boom of the 1990s. Budgets were still in the black in both Washington and Albany.

Sandy, by contrast, hit a month after the federal government ended its fourth straight fiscal year with a deficit above $1 trillion, with debt headed to its highest share of economic output since 1950. Regardless of who wins next week’s election, the “fiscal cliff” looms at the end of the year.

The storm also came just days after Comptroller Thomas DiNapoli warned that New York’s state tax collections “continue to lag behind expectations” and “financial risks remain.”

The city’s own budget on the eve of Sandy was tenuously balanced in the short run, but with long-term gaps projected at more than $3 billion by fiscal 2014. The outlook was, if anything, shakier for local governments in storm-wracked Long Island and the lower Hudson Valley, which have recovered much more slowly from the Great Recession.

Then, there’s state Metropolitan Transportation Authority — owner-operator of what this week became the world’s largest partially inundated transit, bridge and tunnel system. And the bi-state Port Authority, all but tapped out by the rebuilding of the World Trade Center, has suffered extensive damage to its facilities in both New York and New Jersey.

Yes, politicians combine an enormous sense of entitlement with a congenital tendency to pass the buck. But given the combination of sharply reduced revenues and sharply increased costs in the wake of Sandy, it’s hard to see how Cuomo (or his counterparts in Trenton and Hartford) can quickly come up with all the extra cash that will be needed to cover the quickly mounting costs of the recovery.

Quite apart from the MTA, New York City alone spent $30 million on emergency contracts in the first three days after the storm hit. Other governments in the storm’s path live much closer to the margin.

Whether it comes in the form of loans, grants or financial guarantees, the federal government will need to play a huge role in the recovery — and that role will need to be resolved soon.

But federal officials will also need to learn from the excesses and mistakes of the post-9/11 recovery period. President George W. Bush’s unhesitating offer of $20 billion in aid to New York, two days after the attack, was an act of heartfelt generosity. But since no one knew whether $20 billion was actually required, it also wasn’t carefully spent.

With that in mind, the publicly funded portion of the Sandy recovery shouldn’t go forward without firm guarantees of much greater accountability from every level of government involved.

One other difference between 9/11 and the Sandy disaster may lend itself to a less wasteful recovery effort this time around.

The building of a new World Trade Center was less an economic imperative than a patriotic and political objective, complicated by the traumatic loss of thousands of lives, which ultimately lent itself to the monumental grandiosity that marred the entire project. By contrast, government’s top priority in Sandy’s aftermath boils down to a straightforward necessity: making New York fully functional again.

But even a no-frills rebuilding will be very, very costly.

Read article at NYPost

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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