Bulletin #7: May 24, 1999
To stimulate Upstate, cut taxes. To do that, cut spending.
Upstate's economy was devastated by high taxes in the late 1980s and early 1990s, as shown by an authoritative new report from Governor Pataki's Chief Economist, Dr. Stephen Kagann. Thanks to major tax cuts enacted over the past five years, things are improving. And yet, the report adds, the damage inflicted by years of high taxes was so great that Upstate's climb out of recession "has been long and, in some places, slow."
The evidence strongly supports each of those points. That's also true of Dr. Kagann's other major conclusion: More tax cuts will mean still more (badly needed) growth.
Manufacturing is key Upstate - and it's sensitive to taxes.
"Upstate New York is one of America's great industrial corridors," the Kagann report says. "The heart of the Upstate economy is manufacturing." Ranked in terms of manufacturing jobs as a proportion of all private-sector employment, the region would rank 16th among the states.
Manufacturers pay even more attention to cost differentials than do other industries - because they must. That means taxes are especially critical to the success or failure of the Upstate economy. So if we want to see Buffalo, Rochester and all of Upstate catch up to the nation's growth rate, cutting taxes on manufacturers - at the state and local levels - is absolutely essential.
Manufacturing isn't the only important industry Upstate, of course. Buffalo is now a regional banking center; the Capital Region and Central New York are each home to thousands of jobs in the insurance sector. Each of these major industries would benefit from tax cuts proposed by Governor Pataki, Senator Bruno and the other legislative leaders.
Spending restraint is an essential part of the strategy
Cutting taxes means restraining spending. It's possible, in the short run, to combine major spending increases and tax cuts. But, in the long run, that just means more debt passed on to our children. New York can't afford that.
Let's get real. Cutting taxes is absolutely essential, for the benefit of all New Yorkers. And so is restraining the ceaseless demands for ever-higher spending.