Right Target, Andrew
Behind gov’s economic plan
In his compelling inaugural speech on New Year’s Day, Gov. Cuomo embraced “a very specific mandate for change that the people want.”
“It starts with jobs, jobs, jobs, getting the economy running once again,” Cuomo said.
Of course, government doesn’t actually create jobs -- although it’s pretty good at destroying them. But Cuomo knows that comparative employment trends are the best available barometer of whether the state’s policies are fostering economic growth.
And if he’s inviting New Yorkers to evaluate him based on that measure, there’s certainly plenty of room for improvement. New York lost more than 300,000 jobs during the Great Recession of 2007-09, with its unemployment rate peaking at a 15-year high of 8.9 percent. And statewide job recovery in the last year has been in line with the national norm: weak.
Yes, the nation as a whole averaged worse in both jobs lost and unemployment during the recession. But that’s mainly because the Empire State’s economy never soared as high as the rest of the country’s during the last expansion -- or during previous booms, for that matter.
Cuomo may recall that the beginning of the end for the first Gov. Cuomo -- his father, Mario -- was the economic downturn that dawned in 1990.
For most states, the recession of the early 1990s was brief and mild -- a mere speed bump amid what would turn out to be the nation’s greatest postwar expansion. For New York, however, 1990-93 brought the deepest employment downturn since the 1930s -- made worse by the tax hikes enacted by the state government and New York City in response to a worsening fiscal crisis.
Before it was over, the state had lost half a million private-sector jobs -- and Mario Cuomo was about to lose his.
New York’s relative economic performance improved during Gov. George Pataki’s first two terms, which began with significant cuts in state spending and taxes. In fact, by the end of the ’90s, the state had managed to surpass the nation’s private-sector job-growth rate for two years in a row -- one of the few times that has happened during an economic expansion.
Nonetheless, New York’s long-term performance has been abysmal. From 1990 to 2010, the private-sector job base in the Empire State expanded by a net 6 percent -- a performance that ranked 45th out of 50 states during that period. Nationally, by contrast, private employment in late 2010 was still 19 percent above the 1990 level, despite millions of job losses during the latest recession.
Nearly all of New York’s weak job growth has been concentrated south of the mid-Hudson Valley. Upstate has been a picture of stagnation, producing no net new private jobs outside the heavily government-subsidized Capital Region.
This can’t be simply written off as a syndrome of the nation’s old, cold places: While the basket-case state of Michigan has lost jobs and Ohio has barely gained any over the last 20 years, private-sector employment has grown 9 percent in Pennsylvania, 11 percent in Indiana, 18 percent in Wisconsin and 25 percent in Minnesota.
That’s why Cuomo’s pledge to cap state spending and property taxes is so important. High property taxes have made all of New York an expensive place to live and do business. Unlike Pataki’s School Tax Relief (STAR) homestead exemption or the income tax “circuit-breaker” favored by Assembly Democrats and labor unions, a broad 2 percent cap on property-tax levies would benefit owners and occupants of all types of property -- commercial and multi-family as well as single-family homes.
The first details of Cuomo’s financial emergency plan are due to emerge today in his State of the State message. Meanwhile, “jobs, jobs, jobs” is the right goal.
This piece originally appeared in New York Post
This piece originally appeared in New York Post