NEW YORK—The troubles of New York City’s economy, including increasingly high budget deficit projections, are overshadowed by the woes of other cities in the state.
Manufacturing, as with other portions of America, for decades provided many jobs in New York. Starting in the ‘60s, the sector began shifting. From 1980 through 2010, approximately 765,000 manufacturing jobs were lost in the state, and the current number, about 457,000, is down from a peak of approximately 1.8 million in 1953.
Job gains in other sectors have offset those losses, such as the 1.7 million gained in the service sector between 1980 and 2010—but these gains have gone to downstate areas. Other cities in the state have been left with high poverty and unemployment rates.
As these cities have lost jobs they have also increasingly lost residents. Through 2010, the population shrank by 279,000 people, which is almost 15 percent of the 1980 population. Most of those who left were under 40.
Then revenues go down because there aren’t as many people, and the tax rate per person goes up. Meanwhile, federal aid is declining.
This situation is pressing concludes a recent report by the office of state Comptroller Thomas DiNapoli.
“Local and state officials, and New York’s citizens, must recognize the need for new and more serious discussions of what public policies might best address these longstanding and intensifying challenges,” states the report.
In Perspective
To put the cities in perspective, New York City’s operating budget is $68.5 billion this year, while the second highest is Buffalo at just $464.2 million, going down to the smallest, Sherrill at $6.1 million.
A source of 25 percent of revenues, property tax, is limited since it is so high in many of these cities, while other costs are rising, such as a $659 million jump in city employee benefits for 52 cities outside of New York City. Other sources of funding are needed for expanding infrastructure and other areas.
The situation can seem grim at times. A Sept. 21 analysis from the nonpartisan Fiscal Policy Institute (FPI) said new Census Bureau data concludes that virtually half of the children in upstate New York’s largest cities lived in poverty in 2011, including more than half in Rochester, Syracuse, and Schenectady.
Several options exist for attracting growth upstate, said James Parrott, deputy director and chief economist at FPI, including bringing growth into the cities and out of the suburbs.
“[Growth in the suburbs] represents a misuse of limited land resources,” Parrot said. “It entails additional infrastructure spending, building more roads and sewers and schools and so on, while those that are in the cities have been allowed to deteriorate.”
Gov. Andrew Cuomo has told local governments to expect less state aid, but Parrot said more state aid would help localities. Partnerships with universities, already happening in Syracuse with Syracuse University and Buffalo with the State University of New York campus, will help.
Mark Page, of New York City’s Office of Budget and Management, recently sent a letter to agency heads telling them that cuts of $2 billion are planned to address a $2.5 billion gap in the next fiscal year.
But local economies elsewhere in the state have more constraints because of their small size, Parrott said.
To attract young people back into these cities, they must become good places to raise families, he said, which, along with developing vibrant economies, will “take a lot of effort.”
Some Success
One way the state government has started to deal with the issues is through regional economic development councils, which come up with plans for growth and can win money from the state. Maria Doulis, director of city studies for the nonpartisan Citizens Budget Commission, said there’s already been some success through the $785 million awarded so far.
The most recent award through the councils, on Sept. 26, was almost $1 million to Garlock Sealing Technologies LLC, for energy-efficient measures. The New York City Regional Council is seeking $13 million for a broadband program that would build out fiber optic networks in “digital deserts” in the outer-boroughs.
Cities outside of the New York City can focus on boosting exports and welcoming immigrants as other ways of stemming employment and population decline.
Apart from New York City, Long Island, and Westchester County have had their foreign-born populations significantly increase, according to a 2011 report commissioned by SUNY’s Levin Institute from the Center for an Urban Future. Westchester County’s share doubled from 12 percent to 24 percent from 1970 to 2008.
Yet other cities have had declines in immigrant populations, except for Schenectady and Utica. In Schenectady’s case, Mayor Albert Jurczynski traveled to Richmond Hill, Queens in 2002, and persuaded Guyanese immigrants to accompany him on a one-day tour of Schenectady, resulting in an influx of immigrants. In 2008, the population didn’t decline for the first time in 50 years.
Hemwati Ramasami, a development specialist at the Schenectady City Planning Department, told the report authors that many of the immigrants had been opening businesses such as restaurants.
Meanwhile, Bruce Katz, vice president and director for the Metropolitan Policy Program of the Brookings Institution, said in a March speech in Buffalo that the “next economy [is] one that is driven by exports and global engagement.”
“It is imperative that you … build strong, deep relationships with your trading partners,” Katz said. “I fundamentally believe that older industrial metropolitan areas like Buffalo have a future if you get focused, plan smart, build on your strengths, and execute with discipline and creativity.”
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