New Report: How to Revitalize Upstate New York

NEW YORK, NY – If postindustrial states like Ohio can attract corporations like Intel to invest billions, why can’t upstate New York do the same?  In a new report for the Manhattan Institute, senior fellow Eric Kober argues that upstate New York should maximize its own advantages rather than chasing big companies at vast public expense. He examines the labor market of the last two business cycles in upstate New York and provides recommendations for facilitating greater economic development. 

Kober provides a thorough comparison of New York’s upstate metro areas to those downstate and similarly deindustrialized ones in the Midwest. He points to higher tax burdens and a worse regulatory environment to explain why the upstate region’s recovery from 2009 slowed by comparison to the New York City area, where most of the state’s growth occurred. He also notes the state’s manufacturing subsidies have produced poor results; rather, the region’s job growth is led by health services instead of manufacturing, which has receded in most areas. He cautions that greater manufacturing subsidies funded by high taxes are unlikely to make the region a winner against other states’ cities that offer a better tax environment, comparable or better public services, and in some cases greater labor forces and amenities compared to upstate New York’s cities.  

Instead of more poorly performing subsidies for attracting manufacturing, Kober argues New York should focus on reducing its tax and regulatory burden, bringing these closer to those of competing states. He also cautions against poorly directed spending. New York State spends more than its neighbors on some services, such as elementary, secondary, and higher education and some components of health care, without producing notable superior results.   

Upstate metros should also build on their impressive cluster of universities and research centers. State priorities should build on programs for private sector partnerships with research centers, which have yielded favorable results. Such measures could slow emigration of talented graduates to other areas. Additionally, alongside lower taxes and smarter public university spending, Kober points to public support for revitalizing downtown areas as a promising sign for improving land use. Governor Kathy Hochul’s support for proposals to remove redundant highways is a good start and can be complemented with similar actions in more cities, better transit services, and zoning for concentrated development.  

Click here to read the full report.