A Recipe for Economic Recovery Upstate

Depending on which of the state’s major party gubernatorial candidates you believe, upstate New York is either a shining example of an economy on the mend or a blighted place where burdensome regulations are squashing the entrepreneurial spirit. 

Andrew Cuomo, who has a three-and-half-year track record he has to run on, for good or ill, gave a rousing acceptance speech in May at the State Democratic Convention, at one point saying, “I believe in Buffalo, I believe in Rochester, I believe in Syracuse, I believe in Utica, and I believe in the North Country and the Hudson Valley. And I believe we’re going forward, and we are not leaving Western New York behind.” 

It was a great political moment. However, the subtext was an acknowledgement that upstate New York continues to struggle economically. 

The latest unemployment figures from the state Labor Department show that from April 2013 to April 2014, unemployment has dropped in every upstate region; yet local unemployment remains moderately high. In areas including Binghamton, Elmira, Glens Falls and Utica/ Rome, the jobless rate remains above 6 percent. Syracuse isn’t far behind at 5.8 percent. 

The numbers don’t reflect people who have stopped looking for work or those who have left the workforce through retirement. 

According to Greg Harden, CEO of Harden Furniture, the region is still having trouble recovering from the financial crisis. 

“We were quite a bit bigger before the recession,” he said of his 250-person company based in McConnellsville in Oneida County. “We were about double the size. But what we experienced through the recession and financial crisis was pretty similar to others in the industry.” 

Cuomo’s Republican challenger, Westchester County Executive Rob Astorino, has made the upstate economy and population loss a central campaign theme—frequently poking holes in the governor’s narrative of economic revival. 

“When did living here become like a prison sentence?” Astorino asked rhetorically at the Republican State Convention last month. “ ‘I’m retired in three years then I’m out of here.” . . . ‘Once the kids finish school we’re headed south.’ Who hasn’t heard that a hundred times?” 

While issues like abortion and gun control get a lot of ink, they only appeal to small subsets of each political party’s base, and are ultimately sidebars to the single overriding priority for both candidates as they court upstate voters: job creation. 

Each candidate has his own recipe to get there. 

Astorino has embraced industrialization, saying he would open up the state to horizontal high-volume hydrofracking. But on the May 19 edition of The Capitol Pressroom he wouldn’t say how he would earn revenue from the process—via severance tax or impact fee, or both. 

“All of that is open,” Astorino said on the radio. 

Cuomo has tabled a decision on hydrofracking until after a health study is completed. Instead he’s focused attention on other burgeoning upstate industries like tourism, dairy, and wine and beer, which some see as antithetical to shale gas drilling as well as more sustainable in the long-term. 

To address the state’s high business taxes, Cuomo instituted the Start-Up NY campaign, a tax–free initiative for out-of-state and some in-state businesses to relocate or expand on the state’s college campuses. 

Astorino has referred to Start-Up NY as “a joke.” 

“Nobody’s coming from Arizona or Texas or the Carolinas or Florida to New York, with our tax burden and our regulations,” Astorino told the Auburn Citizen

Though it is still too early to assess whether Start-Up NY will be successful, some long-time upstate manufacturers like Tough Traveler, a luggage maker based in Schenectady, find the initiative tough to swallow. 

“Start-Up NY seems like quite a problem,” said Nancy Gold, Tough Traveler’s CEO. “It’s the wrong move. Everybody in New York will be paying for it. And of course as manufacturers we don’t see any reason for it.” 

In his acceptance speech at the Democratic convention, Cuomo said, “Thousands of businesses have applied to come to these start-up zones all across the state, but especially in upstate New York.” 

Gold isn’t convinced. “I can’t imagine who it’s going to help,” she said. “It’s a massive tax giveaway.” 

While the governor has focused on addressing property taxes and creating initiatives to bring business into the state, he has been less aggressive when it comes to mandate relief, creating an opening for Astorino, who has crisscrossed the state talking about why costs keep rising. 

It’s a message that resonates with Harden. “We have to continue to reform some of the regulations, some of the laws that have been drivers of New York State inefficiencies and drivers of the high costs of doing business in the state,” he said. 

It’s not as if Gov. Cuomo isn’t aware of the problem; he’s just pragmatic, saying the political will isn’t there to tackle mandates like Triborough, Scaffold and Wicks. 

But Astorino isn’t buying it. He recently told the Corning Leader that Cuomo’s efforts to limit the growth of property taxes “is only half the equation.” The other half is mandate relief, which he claims the governor has “reneged” on his promise to address. 

To underscore the point, Astorino has taken aim at one of the governor’s most generous and highly touted economic development programs—the so-called “Buffalo Billion”—calling it a program that “dangles money to one community while failing to address more structural financial and economic problems facing the state.” 

Ironically, this is precisely the argument that Syracuse Mayor Stephanie Miner, Cuomo’s former State Democratic Committee co-chair, has made when discussing her city’s pension-heavy budget. “What we want is a good policy solution to this structural problem,” she told The New York Times

Miner isn’t alone. Her calls for state help to bolster aging infrastructure as well as assistance with mandate relief have been echoed by her fellow upstate mayors, the New York State Association of Counties and the New York State School Boards Association, among other groups. 

Gov. Cuomo has been able to hold the line on state spending, successfully slow the growth of property taxes and even pass pension reform. But he has been reluctant to address the root causes of upstate’s economic stagnation, something that even members of his own party repeatedly point out. 

Upstate needs all these ingredients to help fuel its economic recovery. While Gov. Cuomo may have started the process—and deserves credit for it—Astorino is promising to finish it.