What do University of Rochester President Joel Seligman, RIT President Bill Destler, Wegmans CEO Danny Wegman, and Mayor Lovely Warren all have in common? From the looks of their recent political excursions, a divine mandate to lobby the state government.
In early March, a delegation of political, business, and education leaders made its annual march down to Albany to “demand our fair share” for Rochester, as Rochester Community Coalition member Kenneth Warner put it. Of course, the RCC isn’t the only group out to save Rochester from the whims of state legislators. The Finger Lakes Regional Economic Development Council, co-chaired by Joel Seligman and Danny Wegman, has continued to campaign for its 24 “transformational priorities”, which range from renovating the Eastman Business Park to supporting a Bristol Mountain Winter Resort Aerial Park Project. Of similar significance is Mayor Lovely Warren’s tireless efforts to bring home the bacon for Rochester. The Mayor’s office revealed last week that it has already secured a $6 million unrestricted State Aid bump from Albany, and Warren is now pushing for a $100 million grant to build a performing arts building in downtown Rochester.
What is most interesting about the coordinated efforts of Rochester’s greatest leaders is the justification given for their various projects. Kenneth Warner explained in a March 3rd Democrat and Chronicle article that his lobbying is crucial for countering the “stinginess” Albany displays uniquely towards Rochester. Mayor Warren justified her $100 million request for a theater in no small part by arguing that other upstate cities are currently getting larger handouts from the capital. It is also quite telling when the Rochester Community Coalition’s first “2014 Top Priority for State Investment” is a change in the calculation for Aid to Municipalities (AIM) funding that seeks to eliminate per-capita “disparities” with other Upstate New York cities.
After reflecting on the justifications of such policy proposals, one has to wonder just how economically sound the arguments for them are. Our policy makers in Albany need to be carefully weighing the costs and benefits of taking wealth from New York’s entrepreneurs, consumers, and savers and spending it on a “Mountain Winter Resort Aerial Park” in Bristol or a $100 million Theater in Downtown Rochester. In such cases, it would be somewhat less than comforting to know that our policy makers are being pressured to make delicate decisions in the name of producing numerical symmetry in aid. One would dearly hope that critical calculations of municipal aid and project awards would be based solely on careful, pragmatic considerations of maximizing New Yorkers’ welfare. Anything less would be the equivalent of a parent respecting the complaints of a jealous child.
Of course, even if the state of New York stands to lose out, what are the costs Rochester could face from inefficient state grants? What do Mayor Warren’s citizens actually have to fear if the state doles out unjustified grants to them? Well, first and foremost, it sets political precedents that will eventually backfire when Rochester inevitably reaches a point of political weakness in the future. The city of Rochester only received an $88 million AIM grants this year, according the Executive Budget published by the governor’s office. However, if the yearly lobbying troupe begins to have its requests granted on the basis of equity, other municipalities will, in turn, be able to use this same argument by citing the new “disparity” as a pretense to request more aid for their own “winter resorts” and “performing arts centers.” In other words, if the equity argument proves successful for one city, it’ll surely be tried for others, and Rochester will end up footing someone else’s bill.
Looking at Rochester’s population trends, it becomes clear that higher taxes in exchange for small political favors are simply not an option if this city is ever going to make a long-term recovery. According to U.S. Census estimates, inhabitants and jobs have been streaming consistently out of Rochester since 1960, and while the decline has slowed in recent decades, these trends have yet to reverse (or even stop). In a Forbes article last July, President of the Kauffman Institute Carl Schramm pointed out that, since the beginning of its decline, the Empire State has been pursuing small, short term projects instead of focusing on long-term growth and competitiveness. The states that New York lost its jobs to in the 1970s and 1980s were specifically those with lower taxes, less regulation, and more economic opportunity. As Texas and California became more competitive and business friendly, New York piled on tax and regulatory burdens one after the next – in no small part because of the intense pressure from interests groups across the state scrambling to fund their pet priorities. The outflow of human capital was reflected every decade in the census. Today, Rochester, Buffalo, and Syracuse are dipping towards new lows in population and job numbers, at a time when many of their impoverished citizens need sustained relief. Last fall, data from the Mercatus Center of Virginia cast doubt on the potential for a turn-around when it declared New York State the most taxed and most regulated province in the U.S.
Ultimately, it’s one thing for Rochester’s leaders to venture out to Albany and seek policies that will provide Upstate New York with sustained economic development. They could promote expanding the EB-5 visa pool for skilled immigrants, lowing the estate tax (which has been shown to drive out wealthy individuals), or getting rid of onerous red tape and inefficient industry regulation. These are the changes that will save New York from an exodus of human capital. But “equity” won’t keep jobs or businesses in Rochester, and it certainly won’t bring any back. If Rochester is only going to send its most talented leaders to the capital to petition for petty earmarks, maybe it’s best if the lobbyists stay home next year. Maybe everyone’s time would be better spent if Danny Wegman kept to his grocery stores and President Seligman focused on his students.
Jares is a member of
the class 2017.
