By Dave Renzi
The year-old crisis on Wall Street is causing deep concern among Upstate families who have watched the value of their retirement, college and personal savings plummet along with the Dow. Along with lessons about deregulation, diversified portfolios and careful investing, we’re learning more about how Albany hedged our tax dollars, and made our economic recovery even more difficult.
The consequences of Albany’s addiction to Wall Street over the past decade is now clear. Today, tax revenues from Wall Street pay for about one-fifth of Albany’s spending, a 1000 percent increase from 1980.
Meanwhile, Upstate’s economy has languished. Manufacturing — the mainstay of the our economy, once providing paychecks for 2 million Upstate residents — now accounts for just 330,000 jobs. Overall, Upstate has the same number of jobs today as it did 10 years ago.
The reasons for Upstate’s economic malaise? The usual suspects: high taxes and energy costs and uneven investment by Albany in critical infrastructure. But most significantly, overspending is the cause of our economic problems.
As Wall Street revenues poured in, Albany politicians pulled out the check book and the credit cards, increasing spending by more than twice the rate of inflation since 2003, and racking up an oppressive level of debt for our children to repay.
When we should have been investing in Upstate jobs, we instead poured more money into entitlement programs like Medicaid, which was larded with new and unaffordable accessories not offered by other states. School budgets soared out of control, even as the state increased its own school aid to historic levels, and New York’s support for public education outranked the entire country.
Meanwhile, Albany made no real effort to identify or rein in waste. A study by the federal government found that 10 percent of spending on entitlement programs like welfare and Medicaid could be the result of fraud and abuse.
Breaking Albany’s Wall Street addiction won’t be easy. Like any family whose budget is out of whack, Albany will need to tighten its belt.
But care must be taken to make sure that already struggling regions of the state aren’t asked to carry a disproportionate burden, as occurred with the last round of across-the-board cuts that eliminated hundreds of Upstate corrections jobs, including in Jefferson and St. Lawrence Counties.
Albany must learn that it can no longer put the interests of one region of the state over another.
[Dave Renzi is a candidate for State Senate in the 48th District, including Jefferson, Oswego and St. Lawrence Counties.]