"At Empire State Two Heads Are Not Better than One"
In government, an idea sometimes takes hold that promises a rare breakthrough in efficiency. The downstate/upstate split of leadership at the Empire State Development Corporation seemed to some like such an idea. In implementing it, Eliot Spitzer intended to highlight the specific needs of Upstate and ensure that they would be seriously addressed.
He hired accomplished people to do the job or, should I say, jobs. Pat Foye, the Downstate representative -- although not an economic developer -- had strong management experience; Dan Gunderson, although not a New Yorker, served as a deputy director of economic development in two states.
They hit the ground running, literally. Foye, who resigned last month, was known to hold 10-12 meetings a day. Dan Gunderson logged thousands of miles traversing the State, visiting every Upstate region.
The Result? A Disaster
However, from the standpoint of execution, the idea has been a disaster. Empire State Development -- the key development arm of the State -- has been crippled by competing management approaches and internal power struggles. Anyone who has had the remotest dealings with ESD understands that a once effective state agency has devolved into dysfunction and distracting turf wars.
Yet, in an uncommonly fierce challenge, Unshackle New York and other Upstate advocacy groups have roundly criticized Governor Paterson's decision to combine ESD efforts in one leader. Surely, these groups, which have been so thoughtful, committed and accomplished in the service of Upstate, are aware of what's going on at ESD. Yet, they have wheeled out the heavy artillery in service of the wrong war.
The battle is not the number of heads at ESD, it's the strength of the voice. Far too often, as Upstate leaders know, the rhetoric from Downstaters has been patronizing, cliche driven and uninformed, but not from this Governor. As Senator, then as Lt. Governor, David Paterson has demonstrated both understanding of and commitment to Upstate challenges and has traveled extensively to assert both.
As Governor, he has reemphasized his commitment to the Upstate Revitalization Fund, property tax reform, regionalization of economic development, environmental preservation, Wicks law revision, energy reform and a host of other important Upstate concerns.
Clinging to a Symbol?
While the idea of a powerful head of upstate development is symbolically attractive, it is largely a vacant gesture if Empire State Development as a whole is not working efficiently. Clinging to a symbol which does not serve the cause it symbolizes is neither good strategy nor sound policy.
This sudden flare-up is also a negative signal to out-of-state and in-state business interests who must be wondering what the fuss is about implementing the standard business practice of consolidating executive power in one leader.
After all, it's a buck that stops at the second floor, not two 50 cent pieces.
As Upstate advocates, we should save our press conferences if and when there is a real showing of Gubernatorial neglect. In the meantime, Govern Paterson is entitled to at least as much deference in consolidating the position as we gave Governor Spitzer in splitting it.
ruralny on 05.13.08 @ 12:35 PM EST [
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Wednesday, February 13th
"Day Two, the Movie"
In movie parlance, the term "Suspend the Disbelief" refers to the process by which a moviegoer refrains from judging whether the action on screen is believable. Even though what is unfolding could never happen in real life, the viewer pretends it is. This act of faith is rewarded with a big helping of old fashioned Hollywood inspiration. Great movies like It's a Wonderful Life, E.T., Singing in the Rain, Casablanca, or The Majestic are lost on viewers who sit there saying: "that could never happen." If you want to feel good at the end, you have to "suspend your disbelief."
Politics is not that different. The political term for suspending disbelief is the "Honeymoon." This is where normally attack-minded politicians withhold their criticisms of the new kid on the political block. You see, politicians, like most human beings, and moviegoers, need to feel uplifted. Deep down, most of them understand that politics can become a terminal disease without a healthy dose of inspiration every once in a while. So, their act of faith is to suspend the forces of gridlock: gratuitous attacks, self-righteous indignation and unabashed self promotion.
Eliot Spitzer burst on the political scene like . . . well . . .a movie star. After eight years of storybook success, the sequel, his tenure as Governor, was a big story. Day One was an anticipated event, like a star-studded opening night. Spitzer's rivals -- political leaders whose luminescence dimmed under the bright light of Spitzer's national stage -- lined up like fawning critics. The Honeymoon was underway.
Then came a twist in the plot that was stranger than fiction. This political heavyweight lost a few rounds; the steamroller ran low on steam; the reform express slowed to a crawl. What happened defied belief, not just suspended it. The curtain falls on Day One, Year One, Act One.
Curtain Up: Year Two, Act Two.
The Governor picks himself up, dusts himself off and goes at it again. This time with a conciliatory State of the State, upbeat State of Upstate, and level-headed budget message. At this point, most of the audience is hoping that year two/act two will unfold differently. Those who believe in the future of good government are still holding their breath. Yet we can predict with grim assurance that some who raise their voices in rebuke -- politicians who could, if they wished, win praise for a strong supporting role -- will instead revel in the role of the disbelieving viewer, booing mid way through the movie.
Call it tragedy or comedy, this plot is as thick as it gets: unless the hero rights the ship of state, it will sink further into the muck of self interest. He may not be your hero, but Spitzer is on an epic quest. You see, he actually believes that a fair and proper balance among the stakeholders in the murky tug of war that has become New York's government can be restored, and that the ship can be righted. For added plot interest, this protagonist -- or antagonist if you prefer -- is one of the few people to show up in Albany in a long time with the courage to try and right it. And if you like suspense, the well- being of millions of New Yorkers hangs in the balance.
A happy ending is far from guaranteed, but one thing is certain, the outcome depends not just on the leading man, but on us, the viewers. The least we can do is stay put in our seats and give the story a chance before walking out of the theatre.
ruralny on 02.13.08 @ 15:22 PM EST [link]
Friday, October 19th
Taming the “Perfect Storm” of Unaffordability in New York: Short Circuit on Energy in New York
(First in a three part series on energy in New York)
Eliot Spitzer took office as Governor on January 1, 2007 announcing his intent to quell the perfect storm of high taxes, high energy costs and high Workers’ Compensation costs. These factors have long been cited as major impediments to economic development in New York State resulting in a decline of New York’s economic power. Nowhere was this felt more deeply than in Upstate New York which has been in economic free fall for more than 40 years.
True to his intent, Governor Spitzer rolled out proposals in the early part of his Administration that addressed high property taxes. Property relief was implemented through increases in the homeowner’s deduction under the Star Program. While not a full fledged assault on property taxes, it did result in a substantial decrease to residential taxpayers. Upstaters benefit from property tax relief because property taxes have been rising much faster than personal income.
Upstaters especially benefit from property tax relief because property taxes have been rising much faster than personal income.
With regard to Workers’ Compensation, the Governor reached a compromise with the State Legislature that is projected to result in billions of dollars of decreased costs. Employer groups have responded positively, suggesting that their savings could range from 20-40% in premiums annually. This will impact Upstate New York because a decrease in Workers’ Compensation costs translates directly into greater economic development upstate.
A decrease in Workers’ Compensation costs translates directly into greater economic development upstate.
The third debilitating economic impediment comprising the “perfect storm” is the high cost of energy. While there is great ferment in the energy efficiency and renewable energy arena--see the next in this three part series--there was no progress this year in fast tracking power plant construction. Revision of Article X of the Public Service Law was a major priority of the Administration but it became bogged down in disputes over what kind of plants would be covered and where the plants could be built.
New York State has been without a power plant siting bill since 2003, adversely affecting the State's future energy supply.
Governor Spitzer's Article X proposal was intended to fast track the permitting process for clean power projects as a way to meet New York's growing energy needs while minimizing air pollution, including greenhouse gas emissions.
The traditional energy community found this “green focus” limiting and not calculated to accomplish the timely siting of major electric generating facilities. The proposed law had no provision for nuclear plants and required that coal plants include unproven carbon capture technologies, thus leaving natural gas, a cleaner but more expensive fuel source, as the only traditional form of power generation that could benefit from Article X.
Also, population density restrictions in the Administration’s bill limited construction to upstate, which, was unattractive to utilities due to the lack of sufficient transmission capacity to deliver power produced upstate to higher priced markets in New York City and Long Island. Although the population density limitations were dropped at the 11th hour, thus making downstate natural gas plants theoretically possible, other provisions were added that were abhorrent to the utility industry which promptly withdrew its support. The legislation died.
Failure to reach accord on the siting of new generating facilities deepens the worry among some that growing demand will expose consumers to higher prices, service curtailments or both.
Failure to reach accord on the siting of new generating facilities deepens the worry among some that growing demand will expose consumers to higher prices, service curtailments or both. Moreover, upstate is vulnerable to price up ticks for additional reasons not applicable downstate.
Consider the following ten factors that make upstate and rural sections of the State vulnerable to increasing fuel prices:
- In order to get to work, most upstate, and in particular, rural dwellers drive longer distances. The more rural, the longer the distance. Accordingly, price hikes in fuel oil make travel to one’s job, to the family doctor or the grocery store more and more expensive. Moreover, the fact that upstate/rural dwellers earn much less than their wage-earning counterparts downstate, makes the cost of gas as a percentage of income much greater.
- Aggravating the cost burden of fuel oil to the upstate dweller is the cost of home heating oil. One can easily envision a day in the near future when home heating oil cost $4-$5 per gallon, resulting in a heating bill of more than $5,000 which translates into nearly 20% of the average annual income of a rural New Yorker.
- Many homes in upstate, especially rural areas, are not energy efficient and in some cases are not even insulated, increasing the costs of home heating oil.
- Long cold seasons further exacerbate the dependence on home heating fuel and the vulnerability to price demands.
- Rural regions have to import most of their household supplies and foodstuffs, yielding increased transportation charges and higher prices for these essential items.
- Despite promising developments upstate, many homeowners don’t have the resources to make even modest infrastructure improvements, like installing efficient light bulbs and insulation.
- The sprawl of upstate communities makes community heating systems infeasible, thus making economies of scale less impossible.
- At existing fossil fuel prices, most renewable energy sources appear costly and beyond the reach of many upstate/rural municipalities and homeowners. (In the third article of this series, we will look at the Energy $mart Park Initiative of the North County as a case study in how to make renewable energy, especially bio mass, more attractive in the Adirondacks.)
- Hydro power, the cheapest of all power sources, is generally available to big businesses and to municipalities favored with long-term contracts with the New York Power Authority, but is unavailable to most upstate communities.
- Conservation techniques such as those envisioned by the Governor’s 15 by 15 are promising, and indispensable, but depend on extensive public re-education, a major challenge both upstate and downstate.
As the Administration regroups to launch another siting bill to supply downstate users with more power, it needs to also focus on the throat clutching hold of price volatility on upstate populations.
If upstate and rural New York are not to fall further behind, energy policy must be viewed as an equity issue for all of New York, not solely as a capacity issue for downstate.
If upstate and rural New York are not to fall further behind, energy policy must be viewed as an equity issue for all of New York, not solely as a capacity issue for downstate. The Administration is well aware of these issues and has the problem in its sights; it needs to move fast and more comprehensively to avoid losing ground in the fight to restore the economic viability of Upstate New York.
In my next column, we will look at the question: Are there bright spots on the energy horizon?
ruralny on 10.19.07 @ 12:44 PM EST [
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Wednesday, June 20th
Going Green Upstate: A success story
In the heartland of this state, Tompkins County, a Supervisor of the Town of Caroline named Don Barber is making a difference. Rather than waiting with bated breath as the great issues of the day are settled—progress on the a new State power generation siteing law, or news on the terms of the Regional greenhouse Gas Initiative, or for new leaders of the PSC or NYSERDA to be appointed—this Upstate Town Supervisor is setting an example for municipal officials everywhere
Supervisor Barber’s personal commitment is impressive. He bikes to work, has solar panels in his home, works his farm with draft horses, travels around in his Hybrid car, and his construction firm has been featured for its aggressive recycling program.
Politically too, he has striven to generate consciousness about renewable energy and energy efficiency. Before he was elected--and one of the reasons why he was elected--one of Mr. Barber’s campaign events a tour of solar energy installations in our Town. The event got so much publicity that NYSEG overcame their initial reluctance and finally agreed to connect Don’s home solar system to the grid.
Don believes there is a connection between personal commitment to Alternative Energy and being elected to public office. His first legislative initiative was an energy audit of the Town’s old and historic buildings and he secured a grant from the State to implement several energy saving tasks including installing insulation and ceiling fans to drive heat down for high ceilings, a programmable thermostat, and energy efficient lighting.
In 2004, in exchange for the Town purchasing a portion of its electricity from Wind Power, Community Energy gave free power to three local schools.
The Town Board made itself a goal, and met that goal, to purchase, in 2005, 100% of the Town’s electricity from Wind Power and asked for private donations to help offset the premium. Needing to raise roughly $1200 for premium, we asked for donations. The community response was great enough that we raised $3600 – enough for three years.
Don’s and the Town Board’s leadership has inspired private citizens to create a committee called “Energy Independent Caroline”. The launched a “Heating Solutions” campaign (inform residents of ways to conserve energy). They are currently going door to door asking people to complete an energy awareness survey and are passing out compact fluorescent light bulbs (donated by 2 chain stores) to those completing the survey. They will also be performing a carbon analysis of Town energy usage and making policy recommendations from that analysis. In addition, they are organizing another fund raising campaign for the purchase of wind power.
For alternative energy, change can be done by individuals, businesses, and governments – both separately and collectively. The Town of Caroline’s effort started with just a few and is now spreading. Demonstrating once again - an individual’s power to affect change.
Don Barber and the Town of Caroline have demonstrated something critical to the success of Upstate: Don’t wait for the world to change around you. Start the change yourself. Examples like this show the true power of Upstaters to change their own destiny.
Peter on 06.20.07 @ 04:40 PM EST [link]
Thursday, February 15th
What’s New in Spitzer’s Budget
Governor Spitzer’s new budget unveiled a substantial package of reforms. The budget is notable for sweeping policy changes on several fronts, and, most important to us, represents a positive direction for upstate New York.
Among the budget items of greatest concern to upstaters are increased property tax relief targeted for middle class taxpayers, strategic investments in health care, including reforms to provide access to health insurance coverage for all children, $50 million increase in targeted aid to distressed cities, towns and counties, and a $300 million nanotech initiative.
While these initiatives help all New Yorkers, they hold the potential to benefit Upstaters in ways not seen before. The needs of upstate/rural NY ARE different despite the tendency of most politicians to lump them together. Let me provide a few examples.
Property taxes are far more crushing upstate than in downstate because they comprise a higher percentage of residents’ incomes. High taxes resulting from decades of federal and state indifference, including irresponsible tax cuts, have placed tens of thousands of rural New Yorkers at risk of losing homesteads held in their families for generations.
Rising fuel costs may be obnoxious to downstaters, but if you live in rural New York and must travel 40-60 miles one way to your job, or if you pay nearly $3.00 per gallon for home heating oil on near poverty level incomes, fuel prices are definitely more challenging.
The gaping hole in the safety net caused by not having health insurance is more acutely experienced when virtually no private employer in rural New York can afford to provide it to its employees. In upstate New York, where commercial loans are always difficult to obtain, aspiring entrepreneurs are faced with a banking policy known as “external obsolescence” which means that the value of collateral is automatically discounted 25% because it is located in an economically depressed area.
Mr. Spitzer’s budget, which addresses property taxes, Medicaid costs, and health care costs, is likely to result, indeed, he has fashioned it to result, in relief for homeowners and families. We think it is a good bet that his attention to upstate New York will continue and manifested in other ways.
Yet this is a good time to reiterate the gargantuan challenge he and his policy makers face in addressing the root problems of upstate New York.
Steady capital movement away from the region 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, while balkanized economic development agencies compete for an insubstantial pot of benefits. The loss of rural economic vitality has led to the abandonment of traditional rural values and social and political demoralization. Consider this depressing fact: member items—the ultimate anti-democratic grab bag—have become an accepted substitute for planned economic development.
Consider this depressing fact: member items—the ultimate anti-democratic grab bag—have become an accepted substitute for planned economic development.
Most political leaders have simply not educated themselves concerning the unique features of the upstate economy. County by county or region by region analysis of primary economic engines are sparse and largely anecdotal. Accordingly, rural policies tend to be top down, one-size-fits-all solutions – often in the form of grants having little to do with inherent structural problems.
For instance, one North Country community received a Small Cities grant to install electric poles and wires to low income homes, but there was no money to fix the wiring inside the home to accommodate the power, thereby actually increasing the hazards to the households.
What is needed is a new policy approach to upstate economic regeneration: The largesse-based approach to upstate problems must be eradicated and a self-sufficiency model built in its place.
The largesse-based approach to upstate problems must be eradicated and a self- sufficiency model built in its place.
What would such a model mean? For one each region/community must develop its own inventory of resources, define its own future and yes, even raise much of its own capital. The state’s role would be to facilitate that process and prime the pump for its initiatives. For instance:
* Revamp technical assistance grants to help regions identify their inventory of resources, formulate regional strategic plans, and raise local capital.
* Leverage investment to stimulate local capital formation to make and sell products marketed outside the region.
* Use of the $300 million budgetary allocation for nanotech to promote rural nano technology products and processes, including university technology incubators.
It is also critical to remember that employment opportunity is not the sum total of self-sufficiency. The future “self-sufficiency” model of upstate/rural development must also encompass affordable property taxes, affordable housing and health care costs, sustainable education (including training geared toward regional specialization), energy efficiency, equitable distribution of energy and renewable energy alternatives, and reliable and affordable transportation and communication networks. Without steps to achieve these goals, gains through economic investment and job opportunity can be quickly eroded.
We will examine these issues in the coming months. Looking forward to your feedback.
Peter on 02.15.07 @ 10:47 AM EST [link]
Tuesday, January 23rd
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:
- Keeping our skies clear and our landscape clean.
- Encouraging capital formation for small business development.
- Requiring incoming businesses to make long-term commitments in return for public support.
- Professionalizing and regionalizing economic development agencies.
- Developing the tourism infrastructure.
- Protecting the local tax base from unfunded State mandates.
- Funding programs to assist family farms.
- Encouraging the development of affordable, clean and renewable clean energy.
- Building alliances among rural organizations.
- 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 [
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