What About Upstate?

What About Upstate: Where Do We Go From Here By: Stuart H. Brody



Had you traveled along the Erie Canal at the turn of the 19th century, you would have seen evidence of a thriving economy. Canal bosses coaxing boatmen, mules tugging on boat lines, barges loaded with agricultural bounty and the industrial output of thriving upstate cities.

Workers in Buffalo, seamstresses in Utica and granite cutters in Albany were fighting for and getting better pay and working conditions and raising the standard of living for their families.

Yet, the emerging industrial colossus of the twentieth century triggered a depletion of our region. First the region was drained of work as investment capital shifted to large communications and transportation hubs in New York City and further west. Then, the sons and daughters of Upstate’s entrepreneurial pioneers left home to follow work downstate.

As the economy declined, the network of roads and waterways began to collapse, as did investment in the region. Before World War II, more than 50% of capital earned in rural areas was plowed back into local economies. Now less than 20% of that capital is re-invested locally.

The glory of upstate New York can still be seen, but mostly in out-of-print books or in aging cultural centers kept alive on meager county budgets.

What began as a downhill spiral triggered by historic economic transitions has become a federal and state government program of calculated deprivation. War on rural America was first declared in the 1980’s when less government was viewed as an end in itself without regard to consequences. Block grants were designed to hide the holes in social services necessitated by shrinking the federal government and massive deficits. Long-standing responsibilities of the federal government were shifted to the states and funded by inadequate “blocks” of money.

Tax cuts sound wonderful but they are often a subterfuge to put money in the hands of wealthier taxpayers, while everyone else struggles to meet school, town and county budgets. The property owner has become the taxpayer of last resort. All over upstate New York, property taxes are forcing people off land held by their families for generations.

Another cost pushed down to the local taxpayer is Medicaid. New York is one of only two states that requires counties to pay these costs. Medicaid alone costs most counties more than half their tax revenues and in some cases more than 70%. This is revenue that would otherwise go to build the economic and social infrastructure of upstate New York, from economic incubators to baseball fields, community arts and mentoring programs.

Steady capital outflow for more than a hundred years has created an infrastructure vacuum leading to state and federal “largess” as the means of assuring rural subsistence. Transfer payments constitute 75% of all federal and state spending in rural New York –50% greater than in urban areas.

The result is a population dependent on a declining stock of hand me down’s and give-a-ways and balkanized economic development agencies competing for a declining pot of benefits. The loss of rural economic vitality has led to abandonment of traditional rural values and social and political demoralization. Consider this depressing fact: member items—the ultimate anti-democratic grab bag—have become a vital economic development tool.

The “largess” based economy of subsidies and grants must be shifted to a “self-sufficiency” model – investing capital in our communities, linking the ingenuity of small and flexible businesses with regional and international marketplaces, and attracting newcomers and tourists by preserving the land, waterways and skies.

Notwithstanding the need to focus on building from within, partnership with state government is indispensable to stabilize property taxes as well as health, education, energy, housing and transportation costs. Without control over those burdens, growth through economic investment and job opportunity can be quickly eroded.

In the coming months I plan to use this space to discuss policy concepts that may help upstate New York regain its economic independence and vitality.

Here are some ideas, I’ll be discussing:

1. Keeping our skies clear and our landscape clean.
2. Encouraging capital formation for small business development.
3. Requiring incoming businesses to make long-term commitments in return for public support.
4. Professionalizing and regionalizing economic development agencies.
5. Developing the tourism infrastructure.
6. Protecting the local tax base from unfunded State mandates.
7. Funding programs to assist family farms.
8. Encouraging the development of affordable, clean and renewable clean energy.
9. Building alliances among rural organizations.
10. Encouraging exploitation of new markets based on the Internet.

Governor Eliot Spitzer has made helping the upstate economy a priority of his administration. I’ll also discuss these developments and report on progress. I welcome reader feedback and input. Together we can contribute to the process of change that will benefit all New Yorkers.






ruralny on 01.23.07 @ 06:36 PM EST [link] [1 Comment]