GNO Inc President and CEO Michael Hecht returned today for his weekly segment with Newell to discuss the state of business and industry in the metro area as more and more Louisianians get vaccinated, COVID infection rates in the region continue to drop or hold steady, and the American Rescue Plan puts hundreds of millions of dollars into city coffers.
“Mayor Cantrell has said that they are putting together a commission to help formulate a strategy for that spend,” Newell began. “Are you guys part of that commission, or have you been approached about possibly participating?”
“I don't know if we're going to be formally part of that commission, but we certainly are in regular conversation with the mayor and her team about these monies, as well as the federal monies that we expect to come down,” Hecht answered. “And not just through the Rescue Plan - there are now the 12 appropriations bills for which we can now do earmarks for the first time in a long while, and then a prospective infrastructure plan in the summertime. We want to make sure that we're not just supporting the right initiatives for New Orleans, but that we're regionally coordinated and we're presenting as much of a united front as possible to our delegation. There are a lot of conversations going on right now!”
“A number of key legislators, both Democrats and Republicans, are saying to local governments, make sure you spend this money wisely because we will be looking, when you come up here looking for capital outlay,” Newell said. “And if we feel like that you haven't tried to leverage these dollars appropriately - we're not funding you!”
“That's probably not a totally empty threat,” Hecht pointed out. “The thing about getting these big hunks of one-time money is it's not as much of a bonanza, it's not as easy as it seems. You've got a snake trying to swallow the cow type of problem. We have to figure out how we spend the money efficiently and we have to figure out how we leverage other dollars in doing it, because that's the smart way... you want to leverage private dollars as well as future federal dollars. You also want to make sure that we're not building metaphorical “Taj Mahals'' or white elephants that we've got to maintain and clean going forward, for which we don't have recurring fundings sources to do so. So on one hand, it's wonderful to be getting these funds, the $5 billion coming to the state, the $375 to New Orleans, $80 million plus going to Jefferson - but it has to be spent responsibly.”
“There's kind of three ways we can spend the trillions of dollars that the country is receiving right now,” Hecht continued. “At some point the spigots are going to get turned off. They have to be, right,? But while the money is flowing, some money can be spent just to return us to where we were a year ago, or to rehire everybody just to continue as if the last year was a bad dream. That might be convenient and easy and politically simple to do, but it's not necessarily what we would do if we were trying to run our businesses in a responsible way. We would say, have we gotten leaner? Have we gotten smarter? Let's retain that.”
“The second way you can spend the funds, which I'm much happier about, is on critical needs. This week you talked about some of the critical needs that the Sewerage and Water Board in New Orleans has in terms of power generation, for example. Well, if we can use one time funds, crisis money, to get us over that hump, then I think that that's fine. That's a good use of these funds. I don't think that relying on disaster spending is a great strategy, but we've seen from Katrina and the oil spill that we can make actually good things come out of these, like coastal restoration. The third thing, which I'd love to hear more about, is how we can use these one-time monies to do things that are transformational for future generations. That's really what's exciting, although the political benefit is not as immediate because it's going to happen well after you're gone as an elected official. I'm thinking about what happened in New York City, where they turned Randall’s Island into a new tech park - that was a generational project, and it was done with funds that came actually out of 9/11. Those are the three tranches we are going to pick from - going back where we were, dealing with a problem today, or thinking about the future.”
Hear the entire interview in the audio player below.
