One reliable character in our mythical, small-town past was the village idiot, a genial and harmless person who everyone knew, liked and ignored. Accordingly, he did no harm.
We have such a character in our midst, known as Unshackle Upstate, a pro-business advocacy group made up largely of Chambers of Commerce and activists who are usually, though not always, Republican. As individuals, the folks who lead this group are civic-minded and decent. Collectively, it’s another story. They may not intend to, but they're doing real harm to upstate New York’s economic prospects.
Unshackle Upstate offers two storylines. First, that upstate is the oppressed captive of downstate interests who abuse and neglect it. Second, upstate's considerable economic troubles are the result of high state and local taxes, high state and local spending and business over-regulation.
On these points Unshackle Upstate brooks no argument and has passionately, and loudly, made its case. It recently issued a "scorecard" rating members of the Legislature (but not the governor) on its top issues. These include over-the-top opposition to minimum wage increases (it will "crush" the economy; food prices will rise "30 percent"; upstate will lose "64,500 to 185,000 jobs"; etc.), paid family leave, prevailing wage, public campaign financing and labor agreements. The group supports gutting environmental protection laws, tax caps, reduced state spending, pension reductions, reductions in health care spending and more. It’s New York's version of the Koch Brothers or Grover Norquist.
The problem is that both storylines are provably false, if evidence-based policy is your goal.
Oppressed and abused upstate? Untrue. Upstate is the beneficiary of a massive economic subsidy paid for by downstate taxpayers. The reliably right-wing and honest Empire Center has said, “New York’s state revenues are disproportionately generated in New York City and its suburbs, resulting in a net transfer of income to upstate.” To use a downstate expression, it's not chopped liver. For every dollar upstate pays to the state, it gets back about $1.60. The opposite can be said for downstate: For every dollar sends to Albany, downstate gets back roughly 90 cents.
Well, what about those high taxes, high spending and over-regulation? The best way to measure that is to compare those communities in New York where taxes, spending and regulation are higher, and those where they are lower. Guess what? New York City and its suburbs have much higher local and state taxes, much higher government spending and much tighter regulation. Those economies are booming, and not just in the financial sector. Upstate communities with low taxes, low spending and low regulation continue to contract economically. Even the Federal Reserve, which carefully monitors this stuff, has weighed in. It just released statewide economic data with bad news for upstate: “little to no growth in the center of the state.” For downstate, good news: “New York City is experiencing strong job growth, with most of it coming, surprisingly, from outside the financial sector.”
One additional insight into Unshackle Upstate – in spite of the group's free-market allegiances, it supports Gov. Andrew Cuomo's massive taxpayer subsidies to upstate corporations (especially in Buffalo, but across upstate if you include Start-Up New York, ReCharge New York and the Excelsior program). Unshackle Upstate, the strict believer in the private sector, heaps praise on such socialistic programs: “New York State should continue and expand upon this innovative economic development model.” Hmm.
That leaves the rest of us with a choice: Shall we adopt policies that have proven to work and create economic growth? Or shall we continue with policies that benefit a few wealthy corporations but which have failed to create economic growth? Seems easy.
Now it is possible to have an ideology that disfavors large government as the ultimate threat to the health and prosperity of the people. That's a conventional philosophy, but it's not provable. It's a belief system that Unshackle Upstate is entitled to. But if your goal is economic growth and prosperity, it would seem that evidence and experience would be valued just as highly. You might even suggest that the upstate economy should try what works downstate: increased wages, increased public investment, demand-side economics and improved infrastructure. How would Unshackle Upstate react to that?
So far there's no change in the Unshackle Upstate catechism. The group is generally politically aligned with the ever-shrinking Assembly Republican delegation and occasionally with Gov. Cuomo. Continuing with the Koch Brothers analogy (without the billions of dollars), Unshackle Upstate preaches the same economic austerity, high-end tax cuts, slash government spending supply-side theory. The group is entitled to make its case as part of the swirl of lobbying and advocacy that helps keep our democracy functioning.
But there comes a time when policy makers need to explain why we persist with the same rinse, lather, repeat cycle of ideas. I don't mean to single out Unshackle Upstate, but we really are at a crossroads. The upstate economy is in genuine trouble, and it's not government spending and regulation that is causing it. It's massive underinvestment in the physical and human infrastructure. I don't criticize the transfer of wealth from downstate to upstate that is enacted in our state budget – they need the help. I don't even mind thoughtful requests for greater subsidies. I do mind advocates with phony-baloney grievances and phony-baloney economic policies who advocate for things that are not true and not effective
So I sort of apologize to Unshackle Upstate for the village idiot quip. But I don't withdraw it. And it would be grand if Unshackle Upstate decided to reassess its agenda and politics based on evidence, not wispy ideology.
Richard Brodsky is a former assemblyman who is in the private practice of law and serves as a senior fellow at both Demos and NYU's Wagner School. He is a regular columnist for the Albany Times Union and The Huffington Post.
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