New Funding is Progress in Meeting a $10 billion Clinton Global Initiative Commitment to Action to Invest in American Infrastructure
New York – In the wake of Hurricane Sandy, the New York City Teachers Retirement System has pledged $1 billion to new investments in infrastructure projects, including improvements to transportation, power, water, communications, and housing in New York City and throughout the tri-state area.
While all projects will be rated on the basis of their return and the fund’s fiduciary standards, potential investments could range from repairing bridges to rebuilding housing destroyed by the hurricane. In addition to repairing and upgrading facilities used by hundreds of thousands of New Yorkers, the infrastructure fund could create thousands of jobs.
This pledge is part of a multi-year Clinton Global Initiative (CGI) Commitment to Action made by the AFL-CIO, American Federation of Teachers (AFT), and partners at the inaugural CGI America meeting in June 2011. The AFL-CIO, AFT, AFL-CIO Building and Construction Trades Department, Union Labor Life Insurance Company, American Federation of State, County and Municipal Employees, AFL-CIO’s Housing Investment Trust, AFL-CIO Working for America Institute, and other partners committed to encourage both workers’ capital and skilled labor to contribute to large-scale investments in the reconstruction of America’s built environment. Working with money managers, asset consultants, pension funds, developers, and federal, state and local governments, the Commitment to Action will finance the construction and repair of quality public infrastructure which will result in at least $10 billion in workers’ capital invested in this area within five years. The CGI Commitment also includes a pledge to invest $10 to $20 million in energy efficient retrofits and an effort to train 40,000 new apprentices and 100,000 mid-career construction workers in the skills necessary to work on 21st century infrastructure projects. To date, the commitment has reached more than $2.7 billion of its total goal.
At a press conference this afternoon, President Bill Clinton, Secretary of the Department of Housing and Urban Development and point person for the Obama Administration’s long-term Hurricane Sandy recovery effort Shaun Donovan, UFT President Michael Mulgrew, Comptroller for the City of New York John Liu, and AFT President Randi Weingarten announced the $1 billion allocation, which will not only create jobs, but also strengthen infrastructure so New York is better prepared to protect vulnerable populations from the rising sea levels, droughts, and increased frequency of storms that coincide with climate change.
“Together the work will benefit our future not only in terms of more efficient buildings and reducing the threat of climate change, but also in the lives of teachers, construction workers, and in lowering energy costs for people all over America,” said President Clinton. “This is a remarkable commitment. It represents a very significant step forward in meeting the entire AFL-CIO CGI commitment to bring Americans back to work, to bring inefficient buildings up to speed, and in this case, to putting us on the path to a sustainable future for New York City.”
“The critical commitment of the Teachers Retirement System at this early stage is one that I hope will inspire and encourage others,” said Secretary Donovan. “This infusion of private capital is like seed money that will allow us to address not only the recovery from Sandy but also the underlying infrastructure challenges that our communities face.”
UFT President Michael Mulgrew said: “We have been working for months to create an investment strategy for the teacher pension fund that will help meet New York’s pressing needs for repairing and updating our roads and bridges, our water and power systems, and middle-income housing. Hurricane Sandy has brought those needs into keener focus, and I am happy to stand here today and say that the teachers of New York City are taking a leadership role in helping to rebuild our city and state.”
“New Yorkers prove their determination and ingenuity in times of adversity,” said New York City Comptroller John C. Liu. “Sandy hit us hard, but the superstorm will not keep us down. This innovative plan could help us rebuild the City, create jobs, and yield solid returns on our pension funds. Together we can produce great projects that are also sound investments.”
“This investment is another example of America’s educators stepping up to not only educate and care for our children but to also revitalize our communities, create jobs, and strengthen our economy,” said American Federation of Teachers President Randi Weingarten. “New York City Teacher Pension funds have always taken a lead in tough times to rebuild our city, from buying city bonds to avert bankruptcy in the 1970s to investing hundreds of millions in the stock market to bolster the economy after 9/11when economic activity had pretty much stopped in lower Manhattan. This investment continues that tradition in the wake of superstorm Sandy and budget cuts that have stifled investment and is part of a broader effort by labor to invest in America’s future and create jobs. I couldn’t be prouder of my home city, my home local, of the labor movement, and to be doing this with President Clinton and the Clinton Global Initiative.”
“Infrastructure investments are critical to maintaining our economic security, as has been brought into stark relief by Hurricane Sandy,” said Gary LaBarbera, president of the Building and Construction Trades Council of New York. “Today’s announcement of a $1 billion investment by the New York City Teachers Retirement System in our infrastructure underscores the leadership role that organized labor, working with the Clinton Global Initiative and our friends in business and government, can play in bringing the level of resources to bear that are needed to collectively meet this challenge and create thousands of jobs.”
Investments in infrastructure have the potential to provide enhanced fixed-income returns, while creating jobs, enhancing our nation’s competitiveness, and addressing the threat of climate change and foreign energy dependence. Recent estimates of the number of jobs created directly or indirectly by infrastructure investment vary from 18,000 jobs per $1 billion invested (American Public Transportation Association 2009 study) to 36,000 jobs per $1 billion invested (University of Massachusetts at Amherst 2009 report).
The Teachers Retirement System infrastructure investments could take the form of bonds purchased by the fund from owners of the projects, or in partial ownership of the projects themselves. Recommendations about actual projects or the form of investment in them will be made by investment professionals on the Comptroller’s staff to the trustees of the TRS, who will make the final decision. The Trustees of the New York City Teachers’ Retirement System (TRS) are: Chairperson Melvyn Aaronson, United Federation of Teachers; Sandra March and Mona Romain, United Federation of Teachers; John Liu, New York City Comptroller; Kathleen Grimm, New York City Department of Education; Carolyn Wolpert and Frieda Foster, Mayor’s appointees. The New York City Teachers Pension Fund manages assets of approximately $46 billion for approximately 110,000 in-service members and nearly 80,000 retirees.
About the Clinton Global Initiative
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI) convenes global leaders to create and implement innovative solutions to the world’s most pressing challenges. CGI Annual Meetings have brought together more than 150 heads of state, 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date CGI members have made more than 2,300 commitments, which have improved the lives of over 400 million people in more than 180 countries. When fully funded and implemented, these commitments will be valued at more than $73.1 billion.
President Clinton established the Clinton Global Initiative America (CGI America) to address economic recovery in the United States. CGI America brings together leaders in business, government, and civil society to generate and implement commitments to create jobs, stimulate economic growth, foster innovation, and support workforce development in the United States. Since its first meeting in June 2011, CGI America participants have made more than 170 commitments valued at $13.4 billion when fully funded and implemented. To learn more, visit cgiamerica.org.
About the American Federation of Teachers
The AFT represents 1.5 million pre-K through 12th-grade teachers; paraprofessionals and other school-related personnel; higher education faculty and professional staff; federal, state and local government employees; nurses and healthcare workers; and early childhood educators.
About the United Federation of Teachers
The United Federation of Teachers represents approximately 200,000 members, including approximately 75,000 teachers and 19,000 classroom paraprofessionals, along with school secretaries, attendance teachers, guidance counselors, psychologists, social workers, adult education teachers, administrative law judges, nurses, laboratory technicians, speech therapists, and other employees, along with more than 28,000 New York City family child care providers. The union actively supports policies, legislation and programs that promote attaining educational equity, closing the academic achievement gap and assuring parent and community voice in school governance.
About the Office of the New York City Comptroller
New York City Comptroller John C. Liu serves as the investment advisor to, custodian and trustee of the New York City Pension Funds. The New York City Pension Funds are comprised of the New York City Employees’ Retirement System (NYCERS), Teachers’ Retirement System (TRS), Police Pension Fund (POLICE), Fire Department Pension Fund (FIRE) and the Board of Education Retirement System (BERS) and are collectively valued at $127 billion as of 9/30/2012.