How New York City Strangled New York State

Having lived in the Empire State on two separate occasions, once upstate and once in the city, I can say with high confidence that the place is a complete and utter mess. In fact, there is no “New York State” anymore, just the Empire of the Five Boroughs and the taxpaying serfs in the hinterlands:

Upstate New York is becoming Detroit with grass.

Binghamton, New York — once a powerhouse of industry — is now approaching Detroit in many economic measures, according to the U.S. Census. In Binghamton, more than 31 percent of city residents are at or below the federal poverty level compared to 38 percent in Detroit. Average household income in Binghamton at $30,179 in 2012 barely outpaces Detroit’s $26,955. By some metrics, Binghamton is behind Detroit. Some 45 percent of Binghamton residents own their dwellings while more than 52 percent of Detroit residents are homeowners. Both “Rust Belt” cities have lost more than 2 percent of their populations.

Binghamton is not alone. Upstate New York — that vast 50,000-square mile region north of New York City — seems to be in an economic death spiral.

“Seems to be”? From Albany westward, the place is a basket case: Syracuse, Rochester, Buffalo — the former Erie Canal and Great Lakes powerhouses have hit the skids. The population imbalance between them and the NYC metro area is so great that it doesn’t matter what they do or how they vote: the governor of New York is elected exclusively by the residents of the city and Westchester County.

Upstate New York, the portion that lies beyond the New York metropolitan area, has become “The Land That Time Forgot,” a broad swath of depressed cities and low-profit farmlands that stretches from Newburgh and Poughkeepsie in the Hudson Valley through the old manufacturing centers of Schenectady and Troy, across the Allegheny Plateau to Syracuse, Rochester and Buffalo, all the way west to Jamestown, the city with the lowest percentage of college graduates in America.

For more than half a century, this huge region — once the nation’s breadbasket and a manufacturing capital — has been losing jobs, dollars and people. “It all began in 1959 when the interstate highway system was completed,” says Carl Schramm, professor of innovation and entrepreneurship at Syracuse University. “That was also the year commercial jets went into service and half the homes in Florida were air-conditioned.”

… upstate New York is tethered to New York City, whose residents overwhelmingly support higher taxes, stricter regulation and bigger spending than the national averages. Those policies are blamed for upstate’s economic woes by many in the region.

“Basically what you’ve got in New York is a state tax code and regulatory regimen written for New York City,” says Joseph Henchman, vice president for state projects at the Tax Foundation in Washington. “Legislators say, `Look, New York is a center of world commerce. Businesses have to be here. It doesn’t matter how high we tax them.’ I hear that a lot. But when you apply that same logic to upstate, the impact is devastating.”

Illinois finds itself in a similar position, as does California, where the Bay Area and Los Angeles, with a fraction of the state’s physical space, treat the “other California” as peasants to be exploited. The fact that all three are blue states speaks for itself.