May 13, 2019

Splitting The Empire (Part 1)

As the New York State legislative session moves towards its June conclusion, conversations about the disparity between how upstate and downstate interests are represented in Albany will likely continue long after our representatives go home for the rest of the year.

You'll recall that in the 2018 election, the Republicans lost their majority in State Senate, which they had held only with support from the Independent Democratic Conference (IDC). The loss made New York a 'trifecta state' - one of 14 states fully controlled by Democrats, to go along with 22 fully controlled by Republicans. In New York, cities are blue across the state, but most upstate counties are solidly red.

Since the election, there has been renewed discussion on what can be done to allow folks north of Westchester County - that broad area that everyone buckets into a hot mess called "upstate" - so that we can regain some semblance of representation of our interests in state government, and to make it harder for the folks who represent NYC to ignore all of us up here.

The idea getting the most attention is the wrong one, I think -- splitting up the Empire State. And, to muddy the waters, there are two distinct ideas on how best to make the worst decision.

Let's take a look at one of them.

Probably the most talked-about plan would split New York into two states, turning the collective counties north of NYC into the 51st state (sorry, Puerto Rico). This plan is supported by Batavia-area Assemblyman Stephen Hawley, who wants a referendum to let us vote on the plan, and at least in part by State Senator Daphne Jordan, from Saratoga County, who wants to study the costs of making the split to see if it makes "economic sense."

The thing is, this idea has been tossed around for a while and there are already studies that suggest it's a bad idea, for a number of reasons, including these from the article linked in the paragraph above:
  1. The tax gap: back in 2011, a study identified a tax gap of $14B per year, based on 2009 data. And the gap would probably be worse now. So what does that mean? Either drastic cuts to services, or huge increases in taxes to pay for what we get now. 
  2. Economic impact: the data suggests that Upstate would be near the bottom of the list of all states in terms of the impact of our economy. Not only have population and income growth been concentrated in NYC, but job growth has also been concentrated there. And that's going to have another impact, shown below.
  3. Fewer workers: a study last year identified our shrinking labor force as a "big challenge."  For example, in the 12-county CNY area surrounding Syracuse, there's been a decline of 43,800 workers since 2007 - that's 6.1% - compared to an increase of 6.3% in the nation's workforce overall. 
  4. Lost incentives: The 0% tax on upstate manufacturers, in place sine 2014, would be gone, unless Upstate could independently sustain it. A similar fate would likely befall other economic development incentives and tax breaks, many of which are funded by settlements with big banks located in NYC and other Attorney General lawsuits - funding that would no longer be accessible. 
  5. SUNY schools: 50 of the 64 campuses in the SUNY system are in Upstate, but most of the students come from downstate. Without the benefits of reduced in-state tuition, fewer students would likely come up here, leading to reduced government subsidies, which could make some of the schools less viable, causing job losses, income losses, and probably population losses as well. 
Sounds like maybe we want to listen to what E.J. McMahon says. He's with the Empire Center for Public Policy, the conservative think tank in Albany.
This could touch off a healthy debate if it leads people to actually take a sober, honest look at what is it you're trying to get away from. Right now, all you're trying to get away from is an enormous subsidy.
The other plan suggests that we keep New York one state, with three autonomous regions. We'll look at that next time.

1 comment:

  1. Interesting. And makes total sense. I will now move on to Part 2.