Written on Sunday, June 24th, 2007 at 9:11am by Christopher Smith | 2 Comments

Graduation Message 2007 – The Upstate Economy Still Stinks

ilovenewyork

It seems like I write the same blog post every couple of months or so and very little seems to change…

The only way to slow the “brain drain” from Upstate New York and stimulate economic development is to lower taxes, address the rising cost of government, and allow the private sector to create employment opportunities. It is said so often that it’s become totally mundane.

Let the Elmira Star-Gazette repeat the refrain one more time…

Take a good look at the class of 2007 this weekend as New York students say goodbye to high school. This might be the last time you’ll see most of them. Except for vacations and visits, far too many of these graduates will spend the rest of their lives looking over their shoulders at their hometown.

The Business Council of New York State reported last month that an online survey it put on its Web site drew more than 1,000 responses indicating that upstate was actually the first choice as a place to live right after graduation for about 75 percent of the upstate who responded.

But the kicker was that within 10 years, only 28 percent expected to still be in the state. What does that say? That maybe right after college, the kids will hang with upstate for a first job but longterm they want out? That’s not encouraging, especially since the survey also showed that nearly half of the respondents ranked job opportunities as the main factor in their decision about where to live.

So, what did Spitzer accomplish on “Day One” and what did the houses of the New York State Legislture accomplish this term to reverse the exodus of young people from Upstate? Not much.

Negotiations over issues ranging from campaign-finance reform to charging vehicles to come into Manhattan to changes in construction laws blew up Thursday, as lawmakers neared the end of this year’s legislative session with few accomplishments and plenty of acrimony between Gov. Eliot Spitzer and Senate Majority Leader Joseph Bruno.

While Spitzer and his aides had been hinting all day that agreements were near on a host of issues, in the end, not only did none of them materialize, but one deal already made — to overhaul the Wicks Law that governs most public-construction contracts — unraveled.

While there was some early progress with sunshine on member item spending and ethics and lobbying reform, significant progress was not made on the issues that cause companies to pull up stakes and relocate elsewhere. Worker’s Comp, Taylor Law, Wicks Law, high taxes, and the general exorbitant cost of governance were not addressed in a meaningful way to make us competitive with other states.

But, Spitzer did announce a new campaign to keep kids here after college called “I Live New York” and put his wife in charge of the panel discussion.

That should really resonate with college grads who can take a job with a cool company in Chicago or work for a collections agency in Buffalo.

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2 Comments

  1. starbuck says:
    June 25, 2007 at 9:18 am

    only way to slow the “brain drain” from Upstate New York and stimulate economic development is to lower taxes, address the rising cost of government, and allow the private sector to create employment opportunities.

    Mundane but true, and if one is to seriously discuss the condition of our job market at all, you nailed the points most worth making.

    Problem is, electoral evidence consistently shows the percent of NYS-ers who agree are a distinct minority. Even in rare cases when an incumbent moves on, the “fresh face / new blood” who replaces them do not push for serious changes along the lines you suggest. If they did, they’d be back in private sector after the next election. Candidates who try, John Faso for example, discover just how unpopular a message that is with the majority, both downstate and upstate.

    Spitzer’s concept of “lower taxes” was a convoluted property tax rebate plan amounting to about $1.5 billion, if I recall correctly – approx one percent of state’s $120B annual tax revenues. And he coupled that in same budget with about a half billion of business tax hikes (”loophole closings”!). This in a budget that according to the new comptroller’s analysis grew about 8 or 9% over Pataki’s final spending spree budget. Our State Senate Republican leadership is even further left than Spitzer about spending and wanted even more. Even when Bruno moves on one of these years, his replacement will be a similarly big fan of spending, and if not then he or she will be replaced by someone who is.

    And in Erie Co., even “reform-minded” new-blooded fresh faces in our county legislature had zero interest in even small enough cuts in local non-mandated county spending to give us a token sales tax cut. Wasn’t even raised as a possibility for debate. Despite talk show callers, there’s really just no public majority demand here or anywhere in NYS for real cuts in taxes of spending. Taylor, Wicks, etc., are also not going anywhere. Political leanings of the majority make it far too easy for unions to rev up public support on their behalf. Only leverage toward unions is local control boards, and we see how unsustainable those are.

    At what point does one properly shift blame from elected officials and just realize a strong majority of NYSers, not just downstate but here too, simply like growth in govt spending programs more than they like redirecting wealth into private sector growth? Either that or some of them simply refuse to believe that nation-high taxes/spending 50% above the average state’s is truly a big impediment to private sector growth. Just be sure a top economic bureaucrat lives here with us to feel our pain and learn to appreciate what uniquely special people we are and how much we really truly deserve more success – the Donn Oprah Esmonde philosophy of economics.

    Hey, things could be worse- just imagine how many new grads we’d be losing if Hillary hadn’t implemented her plan for govt to grow private sector jobs by 200,000 upstate… then we’d really be screwed!

  2. Fabio Escobar says:
    June 25, 2007 at 9:38 pm

    Why would anyone give up money willingly? Whether that is the correct characterization or not, that is how most of Albany sees those tax dollars. Thus, to expect those funds to be redirected into private sector growth (read: tax breaks) seems a bit naive. Given the history of governmental hostility towards tax breaks, there is little reason to hope for substantive and lasting tax relief.

    Can a solution issue from such pessimism? Sure, but it’s not a governmental solution. It consists in seeing NY State as a place that doesn’t afford a middle class kind of life. In other words, draw down your expectations for the financial future one can have in NY State and particularly in WNY. Assume that even if you’ll make about 40K in your 40s and 50s, you’ll have little to no disposable income. Assume also that you’ll top out in the low 50s by the time you retire, and probably have no retirement income beyond what SS will give you (if anything), or anything saved for retirement. Assume that your benefits will suck unless you buy supplemental insurance that is probably not worth the cost. Assume zero to few luxuries, particularly any expenses related to entertainment (and take time to consider the possibility that children are a luxury you might not be able to afford).

    In other words, plan for a bleak future. By doing so in our 20s, most of us could avoid that same future and still live a pretty good life in a region with one of the lowest costs of living in the country. In some cases, that’s a smarter call than opting for the (mythical?) greener pastures of not-NY.

 

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