Long-Term Solutions Needed To Jumpstart Upstate Economy
This past week, Governor Spitzer gave his State of Upstate address in which he recognized the need to address the problems facing our upstate communities. While his speech included a plan to infuse $1 billion in capital into our local economies, he did not provide the details on how he will pay for these promises, and the governor did not detail the solutions needed to address the root cause of problems plaguing upstate’s economy this year.
From high taxes and increased energy costs to job losses, residents and businesses can no longer afford to wait for the immediate changes required to return New York state to a true global competitor. For too long, those leading state government have been mostly influenced by downstate political agendas, focusing their energies on New York City and its surrounding areas. Years of neglecting upstate communities have had disastrous consequences for their residents and businesses, forcing many to flee the state in search of better opportunities elsewhere.
Data illustrates the severity of the situation. According to information received from the ALEC-Laffer State Economic Competitiveness Index, New York state ranked 49th in the nation –below only Vermont – on economic outlook. The index was based on 16 variables, including top marginal personal and corporate income tax rates, property and sales tax burdens, debt service as a percentage of total tax revenue, and estate taxes.
While I am sure the governor has good intentions in pumping $1 billion into upstate’s economy, not all of these initiatives are a good use of taxpayers’ dollars, especially if these resources are borrowed and add to the state debt. A report released by the state comptroller urged state lawmakers to enact a new debt cap and indicated that state funded debt grew to nearly $51 billion in Fiscal Year 2006-07, a 31 percent increase in 3 years. This translates into $2,797 per person, the second highest per capita in the country.
In order for upstate New York to, once again, experience growth, we need to eliminate the factors that have led to its current economic decline, without further contributing to state debt. As such, my legislative priorities for the year include bold measures such as enacting a property tax cap, implementing a comprehensive energy program that will reduce the cost of energy and gasoline, repealing the Corporate Franchise and Personal Income Taxes for manufacturers, investing in agricultural research and development so our state remains a world leader in agricultural production, reducing health-care costs by eliminating waste in Medicaid, making prescription drugs and medical care more affordable and allowing small businesses to be eligible for basic STAR benefits.
While these initiatives would help jumpstart our economy, we must simultaneously rein in state debt. To do so, I am supporting legislation that would prohibit the practice of “back-door borrowing” and limit the amount of revenue debt that may be issued in a fiscal year to 35 percent of the capital budget for that year. Additionally, I am supporting legislation that would require 10 percent of the surplus at the end of a fiscal year to be used to retire the state’s highest cost debt and that the amounts that are required to be deposited into the Tax Stabilization Reserve Fund be increased.
I am hopeful that the governor, in recognizing the need to improve living conditions for upstate residents, will be an open partner for change and implement many of the initiatives that I am pushing for. As I look forward to the future, I am optimistic that the tone of urgency present in the governor’s State of Upstate address will translate into real action. From tourism to agriculture, Upstate New York has much to offer the world and I will work closely with state leaders to ensure that our region’s economy is once again growing and thriving.