Region's survival depends upon support for reform
By BRUCE FISHER AND WILLIAM A. JOHNSON JR.
First published: Sunday, November 30, 2008
New York is shrinking. The Empire State has continued to diminish in rank and influence over the past 30 years, as first California and then Texas surpassed it in population and political status.
Between 1970 and 2007, the two largest states had combined population growth of 28.9 million, while New York increased by a meager 1.06 million. Florida, Arizona and other Sun Belt states have also had exponential growth.
By 2020, upstate New York may be unrecognizably smaller. A recent county-by-county analysis of population trends in all 50 states tells the story.
The Wharton School's Peter Linneman and Albert Saiz predict that by 2020, every county outside the New York City metro area will lose population. Chautauqua County, despite its strong tourism base, agriculture and tradition of entrepreneurship, will lose tens of thousands of residents. The counties in the Mohawk Valley between Albany and Syracuse will fare the worst. Cayuga County, near Syracuse, will lose 60 percent of its people. The immediate Rochester area won't lose much, but that's not saying much — because it won't grow, either. New York's second-largest metro area, Buffalo, will shrink another 10 percent.
Pennsylvania, Ohio and Michigan look about the same in the Linneman-Saiz model. But the situation for New York is particularly difficult. It's time for state government to shed illusions about upstate's ability to turn itself around and accept four facts:
Until the Sun Belt fills up and runs out of water, we won't grow.
Our local government structure is unsustainable even now. By 2020, it will be completely dysfunctional.
Many local governments count on state aid to balance their budgets. According to the state comptroller, more than $4.1 billion was distributed to counties, cities, towns and villages outside of New York City in 2005, and an additional $9.8 billion was spent on school aid. Given the $47 billion projected state deficit over the next four years, it will be nearly impossible to sustain these levels of state support.
Our land-use practices undermine our economic sustainability.
As our population grows older, smaller and poorer, and the state's financial crisis escalates, we need to radically restructure local government, re-think our land-use practices and use new technology tools to manage government services regionally.
State government, at both the executive and legislative levels, has to get engaged in proactive ways uncharacteristic of its past hands-off approach. The status quo is no longer acceptable.
Since 1990, three gubernatorial commissions have advocated the same thing: Restructuring local government is long overdue, and very achievable.
Former Lt. Gov. Stan Lundine led the latest commission, which made numerous recommendations to modernize antiquated structures, share services with adjoining jurisdictions and consolidate structures whose autonomy is no longer justified by expense or practice. Gov. David Paterson generally endorsed the findings last spring, but his attention has been distracted by the larger fiscal crisis.
The secretary of state has grant funds that help local governments pay for whatever technical assistance they need to do merger or shared-service agreements. The 21st Century Demonstration Project Fund, which evolved from the work of the Lundine Commission, promotes "large-scale, transformative change in municipalities … that can be used as living laboratories for municipal innovation." The first of these grants, which will give incentives for creativity and risk-taking, should be awarded next spring.
Unfortunately, too many state and local elected officials and the special-interest groups that control the flow of business in Albany resist any change in the status quo. As the recent aborted special legislative session demonstrated, leaders continue to punt in the face of impending fiscal ruin.
Land-use practices, which are dictated by local home rule preferences, continue to impair the state's ability to re-position itself. In Monroe County, for example, the three largest development projects, each estimated to cost more than $250 million, involve two that aim to restore downtown Rochester's economic viability, and a third to transform a nearly abandoned inner-ring suburban mall into a mixed retail, entertainment and commercial project.
All will require huge public subsidy, and all will compete in a county with a declining population and challenged tax base.
Other retail and commercial projects are being proposed within this same shrinking metropolitan region, without regard for duplication or need. The same situations are in play elsewhere in the state. A regional land-use policy would rectify these intolerable redundacies.
If these trends are to be changed, the governor, Assembly speaker and Senate majority leader must:
Identify which of the Lundine Commission recommendations they can collectively, or individually, embrace. Those items must take priority for enactment in 2009.
Educate the populace about the need for local government reform. The public must be able to envision how restructured local governments will look and perform. This is where technology can be useful, using the tools of GIS, social networking, and other sophisticated modeling and distance-communication tools. One picture is worth a thousand words.
Help create an environment in which all key constituent groups understand that the only way New York will ever successfully compete against the Sun Belt is through radical transformation of all of our municipal structures, not mere tinkering with a few of them.
New York can no longer rely on Wall Street to foot 20 percent of the state's revenues. Neither can it rely on the upstate tax base.
We simply do not have $130 billion (see chart) to fund archaic, inefficient and duplicative local governments. With population shrinkage and a humbled Wall Street, we won't have that kind of money tomorrow, either.
That's why the budget crisis must result — at the very least — in implementing the Lundine Commission report. Even if we somehow do come up with the funds to sustain local government as currently organized, our experience tells us that we shouldn't. Why should we continue to rely on downstate taxes to subsidize upstate dysfunction? More efficient, consolidated and regionalized local government could, in a conservative estimate, yield a 10 percent savings.
That $13 billion in annual savings is about equal to the projected deficit facing Gov. Paterson. That's money that should either be saved or invested, not spent as it is now — if we're going to survive past 2020.
Bruce Fisher is the director of the Center for Economic and Policy Studies at Buffalo State College and a former Erie County deputy county executive. William A. Johnson Jr. is distinguished professor of public policy and urban studies at Rochester Institute of Technology. He previously was mayor of Rochester.
Cost of government
In 2005 (the last year for which the state comptroller's reports are available), the cost was more than $240 billion.
$110.3 billion State government
$69.8 billion NYC government and schools
$30 billion 698 other school districts
$18.7 billion 57 counties
$6.3 billion 932 towns
$3.8 billion 61 cities
$2.3 billion 556 villages
These figures don't include billions more in spending by 2,403 special purpose districts and public authorities in the state.