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Upstate competition gets thumbs down

Gov. Andrew Cuomo last week announced a $1.5 billion economic revitalization competition, and nearly half of RBJ Daily Report Snap Poll respondents gave it a poor grade. 

Cuomo came to Rochester last Thursday to announce the competition, which he said would jump-start growth across Upstate New York. Based in part on the model of the Buffalo Billion, a $1 billion state program designed to spark a resurgence in Western New York, the Upstate New York Economic Revitalization Competition would allow the Finger Lakes and six other regions to vie for one of three $500 million prizes.

Cuomo wants the regions to submit plans focused on strengthening critical infrastructure, revitalizing communities, bolstering workforce development, growing tourism and improving quality of life.

If approved by state lawmakers, the program would be funded from New York’s $5 billion surplus from recent settlements with financial institutions. The competition is slated to launch April 15; submissions would be due July 1, with the three winning regions announced in the fall.

Monroe County Executive Maggie Brooks, a Republican, and Rochester Mayor Lovely Warren, a Democrat, issued statements of support for the competition. Rochester Business Alliance president and CEO Robert Duffy, who as lieutenant governor led Cuomo’s regional economic development council effort statewide, called the new competition “a great opportunity.”

However, Republican Assembly Minority Leader Brian Kolb of Canandaigua said “another program that picks winners and losers solely at the governor’s discretion does not equate to sustained growth and long-term recovery.” He said most businesses would not benefit from the program: “For entrepreneurs to succeed, they need the government to get out of the way, not exert more influence.”

A large majority of readers—more than three out of four—think a $1.5 billion broad-based tax cut would do a better job of boosting the economy.

Nearly 500 readers participated in this week’s poll, conducted Jan. 19 and 20.

As an economic development idea, how do you rate the proposed $1.5 billion Upstate New York Economic Revitalization Competition?

Excellent: 12%
Good: 20%
Fair: 23%
Poor: 44%

In your view, which of the following would do the most to boost the upstate economy?

A $1.5 billion broad-based tax cut: 77%
The $1.5 billion Upstate New York Economic Revitalization Competition: 23%

For information on how the Snap Polls are conducted, click here.
COMMENTS:
This is a great opportunity to provide some real economic stimulus in the form of tax cuts for individuals and business. Enough with the silly competition, which pits regions against each other. We need to work together.
—Rob Ewanow

I wonder if this program is the only direct benefit upstate will see from the $5 billion “surplus.” If so, we are celebrating being shortchanged yet again.
—Matt Convery, BLM Construction Co. Inc.

Stop the Cuomo favoritism. Everyone should benefit from this surplus!
—David Wagner

The government class just doesn’t get it. It is not their job to pick winners and losers. Cut taxes and leave the money in the community. I’m beginning to think they won’t get it until everyone leaves New York State.
—Alan Baker, TB Pix

Tough choice! A broad-based tax cut reaches more companies and probably employees. But a focused choice of higher potential segments probably offers more impact, particularly since this is just a one-shot infusion. Give Cuomo credit for doing some strategic thinking about differences across the state outside of New York City.
—Hal Gaffin, Fairport

The governor views upstate as a quaint vacation area. A place worth throwing a few dollars toward roads and bridges so vacationers can view the scenery. Businesses do not need to be treated like they were all Kickstarters. Spend the surplus tax collections on education and bridges. Reduce the sales tax, or the income tax, and forget the competition.
—Linda Hunt, retired

In my view, already struggling regions should not be made to compete with each other for these funds. What will likely happen is that those who can afford to “put on the best show” will win out. Money will be spent trying to appeal to the arbiters of the competition that could have been put to better use by the regions in the competition.
—S. Wyatt

Should be based on need and competition. I’m not Republican but agree with Brian Kolb on this one. This is not a game.
—Deb Gibson

If the governor truly wants long-term economic growth, tax cuts are a great start. He can start with ending the taxpayer-funded “Start-Up NY.” So far he has spent more than $160 million of our money to bring in $90 million dollars in business; good job.
—Jeff McSpadden, McSpadden Heating & Air LLC

Where did Andrew Cuomo get all this money? He got all this money from all the people of New York. You can rob all of the people some of the time. And you can rob some of the people all of the time. But you can’t rob all the people all of the time. Give us our money back and let us spend our money our own way, and then let free market capitalism take over. Andrew Cuomo had debts to pay after the last election. The Western New York cities and universities were great supporters of Gov. Cuomo. Guess who gets the money: cities with universities. What about the rural areas that voted against Gov. Cuomo: No money. Give me my money back! (So I can pay for a free community college education for everyone else’s kid.)
—Clifford Jacobson M.D.

Cutting taxes and government regulations would do way more to stimulate economic growth than one more government program.
—Doug Lyon,
Lyon Capital Management

Another gimmick.
—Ed Jackson, retired

Clueless. Just clueless. New York gets a financial windfall and Cuomo turns it into a game show that he hosts? Strip this down and this is just a scam to buy votes and build yet more bureaucracy. I have never even heard of the “Buffalo Billion,” so that can’t be doing well. My suggestion? Put all the money in a trust to make SUNY tuition-free for in-state students and next-to-nothing for out-of-state/international. New York State would attract and retain the best and brightest students in the world. What would New York State look like if Google was founded in, say, Glens Falls? That would be “Glens Falls Gajillion.”
—Ian Cunningham

If there is any money to be spent on economic revitalization it needs to be spent to help people to achieve high school (or TASC) level education or higher. These are the folks who are falling further behind through the current “rules” for hiring. They are smart, motivated and clever. They need to be able to get jobs.
—Art North

I do expect to see a broad-based tax cut at some point, but I prefer the idea of regions competing for money instead of a handout. As more jobs are created, education improved, and poverty decreases, that should lead to the ability to have a broad-based tax cut. I am not aware at all the governor is the only one who chooses as this is built on a business plan, presentation, and need (over want).
—Keith Newcomer

You’re either big government or you’re not. Give the money back to the people by cutting their taxes. I’d rather let the market decide whose ideas are viable than the government (sshhhh … they are not very good at it!).
—Devin Michaels, Chili

Crucial to the effectiveness of this endeavor will be the objectivity and impartiality of the judges. In New York, where state government is overwhelmingly dominated by influence peddlers and self-centered politicians, it will be a challenge to develop an objective basis for selection and may be impossible to then decide on that basis. I hope for the best for our community.
—Dorver Kendig, Webster

The $1.5 billion program is better than a sharp stick in the eye, but we still have a tax problem—income and property taxes remain too high with no plan for reducing them.
—Wayne Donner, Rush

Why is it that politicians feel the need to always be spending money? Why not pay down the debt that almost caused the state to become insolvent a few years back? Reducing the debt load also reduces the states expenses and thus the tax load that each of us pay.
—John Cogan, CEO, Vantage Benefits Group

Having the state pay for mandates, thus relieving local government thereby reducing taxes, will do more to stimulate the economy than having groups beg for money.
—Chuck Wells, president, Wells Insurance

The proposal is another “progressive” proposal to insert government further into business. Reduce taxes in New York and the state will gain from it. This proposal does not address the reason that business continues to languish in our state.
—Dave Coriale, Webster

So the governor believes in competition (or is it groveling) for government redistribution of our tax dollars? But he doesn’t believe in assisting businesses in competing with other businesses and especially out-of-state businesses facing fewer tax pressures? What’s wrong with this picture? Does he really think that he and his regional development councils can pick the winners? Why can’t the governor see that what’s really needed to spur economic development, for everyone, is across the board tax relief and less regulation?
—Keith Robinson, Diamond Packaging

The governor seems to think $1.5 billion is his money to play with as he sees fit. He keeps reminding anyone who will listen that NYS has the highest taxes in the country; why is he so afraid of a tax cut? All those in Albany need to stop playing games with our tax dollars!
—Al Kempf, Fairport

Hey! Anything is better than nothing; besides, it is the taxpayers’ money! However, as usual, the devil is really in the details, and I do agree: “Get the government out of our lives.”
—J.A. DePaolis, Penfield

As usual, it’s what is in the fine print and who has been selected to render such decisions. I am “sure” there is no political bias in the process.
—David Rusin, Pittsford

Give the money back to its owners—us—the taxpayers, and then let us through local government decide what projects we want to focus our attention on. We do not need to be at feet of Big Brother Andy begging for our own money back!
—Peter Short, Pittsford

It is hard for me to approve a competitive process that has all the earmarks of a politically motivated decision process. This money should go to areas of the state that has the highest priority for infrastructure needs. We keep talking about how bad our infrastructure is, but monies don’t seem to get earmarked for those needs. It’s always spent on pet projects that benefit a few instead of the many. Competing for this money is fine, but the decision needs to be made by a completely non-political unbiased party. That is, if there is such a thing.
—Grant Osman, Pittsford

Have we become so addicted to government handouts that we now compete for them? When Danny Wegman led the effort to garner $90 million in state-funded handouts in 2012, everyone cheered. At least we got our fair share, one local businessman told me. I don’t know about you, but, my fair share was in my bank account until the state took it away and gave it to someone else.
—John Calia, Vistage International

The best investment New York State could make is to return the $1.5 billion to the taxpayers and let them make their own economic decisions—they are much better at it than the state’s bureaucrats. And the governor could have really enhanced the Southern Tier economy by letting the towns that want fracking permit it.
—Bob Worden, Penn Yan

Judging from the results of Mr. Cuomo’s “NY Works” Campaign, I don’t have much hope for this monstrous program. In “NY Works,” the state committed more than $150 million and is proud to advertise that the program generated $98 million in investments by private business. That program was good for some companies and too few New Yorkers. Media companies are probably the only ones who really profited. Wow, with such stupendous financial returns, I should ask them to invest my retirement funds! No, I don’t have high hopes for this $1.5 billion “competition.”
—G. Traikos

It would generate more wealth for more people if the state did the following: 1. Identify metrics and goals that would eventually make the state more competitive with other states. 2. Create an incentive system with checks and balances that rewards state legislators to do the best job for the most people. For example, if unemployment goes down to 4.5 percent and the average wage goes up XX percent or to a specified dollar amount, then legislators would get a specified bonus added on to their salary—in other words, pay for performance just like in private industry. 3. Limit how long a legislator can serve but do allow legislators to obtain jobs in other areas of government. 4. Pursue legislation that gets the state OUT OF as many areas of the economy as possible. For example, there is no reason that the state should operate a ski resort OR maintain the roads when private firms could do a much better job at lower cost. 5. Many of the great projects that Gov. Cuomo is pursuing are beyond what is in the state’s power to efficiently pursue. 6. The role of federal and state government alike is to create the economic ENVIRONMENT for private industry and individuals to fairly pursue happiness. 7. The over-riding principle to be followed is the "greatest good for the greatest number." 8. Laws that strongly influence "who benefits have been set up to favor those already in power or have economic wealth. This is one key reason why the relatively few have accumulated a disproportionate amount of wealth—not just in the U.S. and in N.Y. but around the world.
—Ray McClure, Fairport

Keep an eye on the facts versus the political puffery. The Buffalo "Billion" is no where near $1 billion, and it has not created anywhere near the jobs the governor and his flacks proclaim. Buffalo’s economy is not showing significant improvements compared to other cities in Upstate New York or the Northeast. Net result to date: the Buffalo Billion is 90 percent talk and 10 percent performance. As for the governor’s "competition" for $1.5 billion for the rest of us, there is something unseemly about the whole thing, like making a dog sit before it gets a treat. It reflects Cuomo’s insatiable desire for control, to appear the benevolent king delivering gifts to the masses. It would be far better to eliminate the mandates giving us the highest property taxes in the nation, lower tax rates across the board (S corps, LLCs and C corps alike, and the endless excise taxes that raise our energy costs), and tell the bureaucrats at DEC, DOL and the other state agencies that business is not the enemy to be punished at every turn. New York is still one of the worst places in America to run a business. Nothing in the governor’s ladling out our own tax dollars to selected "winners" will change that.
—Bob Sarbane

In the long run, when government picks winners and losers it will ultimately fail whether it’s done by local, state or federal entities. The policies of the federal government and states like New York have resulted in one of the slowest economic recoveries in history. In fact, over the past few years, the birth rate of active businesses in the United States has been less than business closings for the first time since the statistic was created. There are too many regulations, taxes and too many resources in the hands of inefficient government. The governor and his advisers should: 1) Educate themselves by reading the works of economists like Milt Friedman and Art Laffer. 2) Make important structural changes like working to make New York a “right-to-work” state, renegotiation all public union contracts, etc. Government shouldn’t be acting as a middleman.
—John Rynne, president, Rynne, Murphy & Associates Inc.

A limited-focus, tax-funded competition for only the larger urban areas of upstate seems more of a political payoff than a serious economic stimulus. If the governor is serious about stimulating the upstate economy, then he should remove the growth-killing regulations, taxes and unfunded-mandates that are driving jobs out of all of NY, especially in the red parts of the state—the rural counties. You know, the places that did not vote for him. And shame on our local supposedly conservative and business-friendly leadership for not seeing through it in the hopes of "getting some.” Good for Kolb for speaking up. It takes courage to stand for what you believe when dollars to your constituent base are at stake.
—Jim Garnham, Penfield

The “Buffalo Billion” is indeed proving itself as a successful model. Unfortunately, the proposed Upstate New York Economic Revitalization Competition does not follow the same model. The idea of making regions compete against each other is fundamentally wrong and unnecessary. Allegedly, the intent was to weed out pet projects and projects that are not good uses of the funding. The best way to encourage good projects would be to put the $1.5 billion (or more) into a fund that regions would apply to on a project-by-project basis. Good projects would be funded, and bad projects would have their funding request rejected. Buffalo did not develop a plan in advance for its billion; funding was released as projects took shape. Upper and lower funding thresholds could be set to ensure that no region loses out while other regions walk away with the bulk of the funding.
—DeWain Feller

New York State just hammered ALL businesses with a 1.2 percent surcharge on payroll for our Federal UI for fourth quarter 2014, because they didn’t have the money to pay it. Gov. Cuomo announces this competition. Where did they find the money for this? Why aren’t our elected officials implementing tax relief for existing businesses? Why isn’t economic development monies spread evenly around the state to help all? I hope they don’t wonder why wages haven’t gone up!
—Jennifer Apetz

1/23/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

 

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