As a resident of the upstate portion of New York (not the Big Apple) I have written frequently about the depressing, negative effects which liberal tax and spend policies combined with strangling regulatory burdens have had on the state, as well as the economic death spiral which has followed. Many of the complaints I hear from residents of the more rural, upstate region center on the unbalanced power held by New York City and the complete disconnect between the government and the more conservative, rural communities to the north and west. But even as a person studying and experiencing these effects first hand, I don’t think I ever grasped the full impact of this disparity in the way it’s spelled out by William Tucker of the American Media Institute.
Upstate New York is becoming Detroit with grass.
Binghamton, New York — once a powerhouse of industry — is now approaching Detroit in many economic measures, according to the U.S. Census. In Binghamton, more than 31 percent of city residents are at or below the federal poverty level compared to 38 percent in Detroit. Average household income in Binghamton at $30,179 in 2012 barely outpaces Detroit’s $26,955. By some metrics, Binghamton is behind Detroit. Some 45 percent of Binghamton residents own their dwellings while more than 52 percent of Detroit residents are homeowners. Both “Rust Belt” cities have lost more than 2 percent of their populations.
Binghamton is not alone. Upstate New York — that vast 50,000-square mile region north of New York City — seems to be in an economic death spiral.
The fate of the area is a small scene in a larger story playing out across rural America. As the balance of population shifts from farms to cities, urban elites are increasingly favoring laws and regulations that benefit urban voters over those who live in small towns or out in the country. The implications are more than just economic: it’s a trend that fuels the intense populism and angry politics that has shattered the post-World War II consensus and divided the nation.
That comparison between the city of Binghamton and the wreckage of Detroit is a true eye opener, but it’s not the only such story in the non-city portions of the state. IBM was once the powerhouse of employment in the greater Binghamton area, employing more than 16,000 people as recently as the late 1980s. Today the entire complex has been sold to local developers and the computer giant employs a few hundred people (many of whom are contractors) renting out a tiny portion of the old complex. Kodak employed 62,000 people in Rochester during the same period as IBM’s heyday. Today there are roughly 4,000 workers. Xerox and Bausch & Lomb were also huge employers there but are now largely (or entirely) gone.
These stories are repeated over and over again in cities and towns across the upstate region, so it’s more than coincidence. Tucker ties it all together.
The economic woes of the Empire State trace back to Albany, and a state government that is legendary for its ability to tax and spend. Strict election laws insulate incumbents of both parties, making the state legislature the longest-tenured in the nation. Petitions to put insurgent candidates on the ballot require tens of thousands of signatures and are regularly rebuffed by the courts on technical grounds. Ballot initiatives that have led to tax reform in other states are not permitted. Politicians are protected from voters and have built a spending machine unmatched in virtually any other state. New York, despite its shrinking population, spends more money than all but a handful of states.
The primary example is Medicaid. New York is the only state that forces its cities and counties to help finance Medicaid. As a result, for every dollar appropriated by Albany, Washington contributes two — and New York’s local governments must kick in a fourth.
Pay particular attention to the section on Medicaid highlighted above because it’s a fight which is raging in states across the nation today. The effect here has been nothing short of devastating. From the top down perspective, as Tucker documents, the state of New York spends more than twice as much money on Medicaid as California while serving less than half the number of people. The “revenue sharing” scheme put in place by Democrats from the city has left some places like Chenango County with fully one half of their property tax income going to Albany just to pay for Medicaid. If you think half is bad, Erie County – home to the Buffalo Bills – sends every dime of their property taxes to Medicaid and they are essentially bankrupt.
Returning to the initial premise of this piece, we’re not seeing a red state vs blue state problem here. It’s large, liberal cities run by high spending Democrats using their numeric advantage to pass policies which bleed smaller, more rural areas to death. It takes place in many states other than New York, too. Pennsylvania is a study in two countries, really, with the urban centers of Philadelphia and Pittsburgh constantly at war with the rural land known as “Pennsyltucky” stretching between them. I’m sure you can find more examples in your own back yards.
But what is the solution? There have been debates raging for years in the Empire State about finding some way to split off New York City as its own state or allowing portions of upstate to secede and sign on with somebody else. But as long as the cities hold the numerical edge on the votes in the state government, there’s not much that anyone can do. It’s a culture war over a way of life and the economic realities of wildly different societal climates. And there’s no end in sight.