The canal drove early growth in New York's major Upstate cities - Albany, Syracuse, Rochester, and Buffalo. Villages dot the way, each separated by about a day's travel by mule-drawn barge. To this day, most of Upstate's population lives in the counties along the Erie Canal.
There's been turmoil surrounding the old Erie, right from the beginning. While some saw promise in a statewide channel that would ease the transport of goods, others saw it as a boondoggle; a sure waste of taxpayer money. Some New York City merchants and manufacturers opposed it, saying they would see insufficient returns on the new taxes they'd have to pay. Legislators from across the state argued against Clinton's Folly - so named after Governor DeWitt Clinton, an early proponent of the canal - saying it was no business of the state to pay for such a project, especially with citizens' taxes.
Supporters saw the Erie Canal as an opportunity to expand trade in the growing state. It would help the very merchants opposed to it, they said, because merchants would be able to ship their goods to new markets. The state should build it, they said, because the state as a whole, and even the young United States, would benefit.
Now, the old debate is heating back up again, and this time other canals, such as the Oswego Canal, are involved, too. Politicians upset over Thruway toll increases want to separate the canals from the Thruway Authority, which oversees them. Thruway officials say the canals don't generate much money, so the authority has to use toll money to subsidize them. They, too, want the responsibility for care of the canals moved elsewhere. The authority "seems to have lost virtually all its enthusiasm for the deal and that's not a good thing," says Ted Curtis, the founder and honorary chairman of Corn Hill Navigation.
Other politicians and canal advocates say the Thruway Authority has done a good job maintaining and operating the canals. It's been a reliable source of funding for the canals and has even made some improvements. For that reason, they say, the canals should stay with the authority.
Either option leaves New Yorkers to answer the same question lawmakers struggled with when the Erie Canal was built: Who should pay for it, and how? A bill, submitted in January by State Senator George Maziarz, a Niagara County Republican, and State Assemblyman Sam Hoyt, an Erie County Democrat, would establish a commission to "determine the future governance of the Canal Corporation." The corporation is the subsidiary that oversees the Erie and other canals. The bill remains in committee in both chambers.
Joyce Lobene, president of the Spencerport Chamber of Commerce, says the Erie is "the stepchild that, honest to God, nobody knows what to do with."
From the time it was built in the 1820's until 1992, the Erie Canal was under the control of the State Department of Transportation or its predecessors. It was in 1992, during the last years of the Mario Cuomo administration, that it was put under the Thruway Authority's jurisdiction.
The authority was better able to fund the canal, doubling spending after the transfer, Curtis says. Since 1992, the authority has spent more than $700 million on Canal Corporation projects and operations. That figure includes upgrades to the Erie Canal towpath, which is popular with cyclists and other recreational users. Last year, the authority spent about $80 million funding the State Canal Corporation.
The Erie Canal did once generate revenue beyond its operational costs. After the canal was first built, ships paid a toll to use it. The fees were abolished in 1882. By that time, the state had raised $42 million over the $7 million it cost to build the canal, plus expansion work. Soon after, there were signs that coming up with future funding for the canal would be troublesome. In 1898, a $9 million expansion project came to a halt because the state ran out of funding. More money was set aside in subsequent years, and from 1905 to 1918, the state expanded and rerouted its canal system.
Until the Thruway Authority - a quasi-governmental agency that does not receive state funding - took over in 1992, the state continued to fund the canals. In 1983, for example, the state used bonds to raise money to fix up the canal.
The authority has also worked to improve the canal system. In 1996, the authority undertook a $32 million improvement project with an emphasis on recreational uses like boating or trails.
Now, however, the authority finds itself in a fiscal bind.
Inflation has increased construction costs and has caused the authority to cut $300 million in projects from its $2.1 billion multi-year highway and bridge plan. Officials say they'd have to cut $1 billion in projects from long-term plans or lay off 1,000 employees to avoid Thruway toll increases. In January, authority director Michael Fleischer told the Times Union of Albany that cutting loose the canal would help eliminate the need for one or two of four planned toll hikes.
If drivers have to pay more to use I-90, it will hurt tourism and the economy, say separation proponents. For example, truckers will have to pay more for tolls, which could drive up food costs. A State Comptroller's Office report says the toll increase could mean a commercial trucker making three round trips a week from the Buffalo suburb of Williamsville to Albany could pay $3,000 more a year.
Among state politicians, the impetus for removing the canal from the Thruway Authority is to lower the agency's costs, doing away with the need to raise tolls. The problem, as they see it, is that the canals generate so little money, the authority has to use Thruway tolls to subsidize them.
Before he left office in 2006, Governor George Pataki called for the removal of the Canal Corporation from the Thruway Authority. Last year, State Senator Vincent Leibell, a Putnam County Republican, introduced a law to do that. It stalled in committee and was reintroduced this year. There is no companion bill in the Assembly.
One of the major questions lawmakers and canal advocates have is how to fund the Canal Corporation if it's separated from the Thruway Authority. State Senator Mike Nozzolio, a Seneca County Republican, wants the canal moved into the State Department of Parks, Recreation and Historic Preservation. Others have made similar calls, but even those who support such a move say there is an inherent problem. With the sluggish economy, the state would have a tough time coming up with the millions of dollars needed to fund the Canal Corporation - around $80 million a year. The state is also billions of dollars in debt, and lawmakers are at odds over how to close that gap.
One option that hasn't generated a lot of discussion is reinstating tolls on the canal. Canal advocates have argued against the idea, saying it would pose a barrier to tourism. Boaters already have to pay to use the locks, they say, and further fees could deter them.
Canal tolls were reinstated in the 1990's and stopped again in 2006. They raised about $250,000 a year, but it cost just under half of that amount to administer the collections, Curtis says, making it not worth the effort.
"It was one thing when there was a huge amount of commercial traffic on the canal," Curtis says.
Commercial shipping on the canals was in serious decline by the 1950's, due to the rise of automobiles and railroads. When the St. Lawrence Seaway opened in 1959, the remaining ships began to abandon the canals. The last regular bulk shipments on the canal - jet fuel for the former Griffiss Air Force base in Rome, Oneida County, and cement - stopped in the mid-1990's. General Electric has started using the Erie and Oswego canals, however, to ship wind turbines from its Schenectady renewable energy plant to the Great Lakes.
The Erie Canal is not the cornerstone of the state's economy that it once was, though canal advocates say it plays a key role in local and regional economic development. Most people now think of the canal as purely recreational. It's a place to go for a walk or a bike ride or to take a leisurely boat cruise.
"It's not canal money, because the canal itself doesn't bring any money at all into the community," says Mayor Vicky Daly of Palmyra. "It brings the people with the money into the communities."
And in some cases, she says, those visitors like what they see, so they move there or start a business there.
Because of the economic development potential, Will Condo, a former coordinator for the now-defunct Western Erie Canal Heritage Corridor, says Empire State Development may be a good home for the canals. The agency is the state's economic development arm and runs the I Love New York program. The move would help put the emphasis on canal tourism and could also boost economic development activity, Condo says.
In the Rochester region, there are communities that have realized the Erie Canal's potential as an economic development tool. They've capitalized on the canal's recreational opportunities as a way to improve quality of life. The canal draws people to downtowns, and as a tourism attraction, it brings visitors into the communities.
In 2000, there was a small marina built along the canal in Palmyra, with the goal to attract passing boaters into this Wayne County village of just under 3,500 people. Over the years, they've also made sure the canal is connected - via a walking path - to a downtown grocery store, pharmacy, and post office, so boaters, cyclists, and other canal travelers can easily get to them. And they plan on investing another $725,000 - mostly grant money - to add more canalside amenities, including parking and restrooms.
Other communities have done similar things. In the village of Pittsford, elected leaders and business owners saw potential in a stretch of old barns, mills, and storage along the canal. They transformed Schoen Place into a shopping and scenic destination and, more recently, added offices. It now draws people from well outside the village limits. Pittsford and Fairport are often cited as examples of well-done canal development, and were early leaders in that area.
In Spencerport, simply building a canalside gazebo has helped. Having a place where residents can gather for concerts, or where travelers can stop and rest, has helped draw people into downtown, says Lobene.
And in Fairport and Brighton, developers have plans to build canalside residences, offices, and retail.
Daly and Mayor Bob Corby of Pittsford are cautious of any move to break the Canal Corporation away from the Thruway Authority. Daly worries that, in light of the outcry over Thruway toll increases, people may act in haste.
"I think we're moving too fast," she says. "I think it's just a knee-jerk thing."
The state needs to make sure there's money to invest in infrastructure and maintenance projects, Corby says. A mix of public and private projects is needed to make sure the canal lives up to its potential, he says.
"We're really at a critical point here," Corby says. "Some of us have viable waterfronts, but I that that there's still a lot of work that needs to be done so that there's continuous activity on the canal."
Canal communities have a unique charm, Corby says, which makes them attractive places to live and work. People are looking for communities with strong identities and strong senses of history. The canal is an asset for the communities that line it, Corby says, and all they have to do is to find ways to take advantage of it.