\GoBillsInDallas/ Posted January 14, 2012 Share Posted January 14, 2012 (edited) http://online.wsj.com/article/SB10001424052970204409004577156603296740624.html By STEVEN MALANGA Why do cities like Buffalo decline, and what role should government play in promoting recovery? In his State of the State Address this month, New York Gov. Andrew Cuomo announced $1 billion in incentives to attract new investment to the beleaguered city by Lake Erie. "We believe in Buffalo," he said, "and we'll put our money where our mouth is." Too bad Mr. Cuomo ignores the factors that help keep areas like Buffalo inhospitable to new investment—namely steep tax rates and the high cost of government. This is an old story for Buffalo. Ever since the city began losing its manufacturing base in the 1950s and gradually declined into one of America's poorest cities (the poverty rate today is nearly 29%), the federal and state governments have poured hundreds of millions of dollars into subsidized redevelopment schemes that have yielded few tangible benefits. Buffalo may be the paradigmatic example of why expensive government revitalization efforts often fail. Back in 2004, the Buffalo News estimated that the city had garnered more federal redevelopment aid per capita than any other city in the country, a total of more than half a billion dollars since the 1970s. Yet, the paper noted, the city had virtually nothing to show for the money. Officials squandered millions granting loans and subsidies to projects that went bust. There was a proposed trade center near the famed Peace Bridge that was never completed even after the city granted it federally backed loans; a failed shopping plaza on William Street; and several hotels that defaulted on their government loans. Among the past three decades' failures have been a dozen or so businesses in the theater district—"one of Western New York's most heavily subsidized stretches of real estate," said the Buffalo News. Even when government subsidies spurred actual building, the city has seen little broader economic impact. In the 1980s Buffalo used tens of millions of dollars of federal Urban Development Action Grants to attract private investment in a few signature developments, like the Key Center office tower in the downtown, and Hilton and Hyatt Hotels. But the projects didn't produce a sustained investment boom elsewhere in the city. Sometimes these schemes have done real harm. In the 1970s, the federal government decided to invest $530 million to build a 6.2-mile light-rail system through downtown Buffalo. It was supposed to further spur redevelopment, of course. Opened in 1985 and anchored by a transit mall that banned cars, the rail line fell well below ridership projections—and downtown businesses suffered mightily from the lack of traffic. As Buffalo landlord Stephen P. Fitzmaurice wrote in 2009: "Walk down Main Street on the transit mall; aside from a few necessities like drug and cell phone stores, blight dominates." Last month the city received a $15 million federal grant to restore traffic to Main Street. These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government's redevelopment funds as "a politically motivated system trying to please everybody." But Buffalo also struggles because it remains among the highest-taxed localities in the country. According to Cato Institute scholar Dean Stansel, a Buffalo resident pays 25% more in income taxes than does the average resident in America's 100 largest metro areas. Buffalo's 8.75% sales tax, according to the Tax Foundation, is the fifth highest among the country's 120 cities with more than 200,000 residents. And the property-tax burden in Buffalo and surrounding Erie County ranks in the top 10% nationwide. These taxes have gone to support a spendthrift local government that nourishes itself at the expense of the private sector. In 2003, then-Gov. George Pataki appointed a financial control board to audit Buffalo's finances. The Buffalo Fiscal Stability Authority accused city government of financial mismanagement, inadequate oversight, and fragmented record keeping. It detailed numerous wasteful practices in city government, including loading employee contracts with expensive provisions. The city's virtually insolvent school district, for example, paid for elective cosmetic surgery for its teachers and other staff. "Buffalo must have the best looking teachers in the country," says John Faso, a former member of the control board, which lobbied unsuccessfully to have the perk ended. It continues today, to the tune of some $6 million a year. The city also struggles to cut spending because of expensive state-imposed mandates, including a union-friendly binding arbitration law that results in rich public-employee contracts, and a state law that allows unionized public workers to continue receiving the benefits of a contract—including pay increases—even after the contract has expired. Good luck getting concessions from union leaders in new contract negotiations under such conditions. But Mr. Cuomo says little about relieving hard-pressed municipalities by lifting such mandates, even while other governors have already signed laws lessening the fiscal burden on local governments. New Jersey, for example, eliminated binding arbitration, which often favored unions, and enacted a new arbitration law that allows cities and towns to impose a settlement when there is an impasse in contract negotiations. Nor did Mr. Cuomo address New York's steep tax burden, the second-highest in the country. Instead of cutting that burden, he recently raised income taxes on the wealthiest New Yorkers. In the Empire State, the official version of Buffalo's decline is that the city lost its manufacturing jobs to cheap overseas competitors. But the flight of blue-collar jobs from upstate New York began in the late 1950s when businesses and investment bolted to more competitive American states, not to foreign countries. Today, business executives consistently rank New York one of the least desirable states in which to open or expand a business. Another billion dollars in government subsidies for Buffalo won't change that. Edited January 14, 2012 by \GoBillsInDallas/ Link to comment Share on other sites More sharing options...
/dev/null Posted January 14, 2012 Share Posted January 14, 2012 Nuh-uh, Stimulous® only helps Link to comment Share on other sites More sharing options...
GaryPinC Posted January 15, 2012 Share Posted January 15, 2012 it all comes down to the entrenched, corrupt local government. I'm sure they're licking their lips ready to funnel the money for their own purposes. Buffalo needs an FBI corruption investigation like Cleveland had a couple years ago. It's their only hope to try and force some change in their govt. Link to comment Share on other sites More sharing options...
Koko78 Posted January 15, 2012 Share Posted January 15, 2012 Throwing money into half-baked development ideas backed by corrupt politicians doesn't fix the systemic problems that cause many businesses to fail in WNY. No one wants to open a business in a state that has crushing taxes, onerous regulations and a state-legislated hostility to any business that operates north or west of Bear Mountain. Link to comment Share on other sites More sharing options...
wyobilzfan Posted January 15, 2012 Share Posted January 15, 2012 (edited) Throwing money into half-baked development ideas backed by corrupt politicians doesn't fix the systemic problems that cause many businesses to fail in WNY. No one wants to open a business in a state that has crushing taxes, onerous regulations and a state-legislated hostility to any business that operates north or west of Bear Mountain. Word. I just finished reading this article elsewhere and was going to post it here. Thought the article was right on, and throwing more money at Buffalo will only make the problems worse. Shoot, if they are going to throw away $1B... build a new domed stadium to keep the Bills in Buffalo. That would be a better use of the money than spending it on programs that will be run by corrupt politicians. Heaven forbid they do anything creative like LOWERING THE TAX BURDEN and cutting spending on entitlements. Part of the reason that 29% of the people living in the city of Buffalo are below the poverty level is because of the high % who are living on government assistance. The suggestion of bringing in the FBI to investigate a la Cleveland is a great idea. Wish I could say I was surprised that 30 years after leaving WNY, the EXACT SAME conversations are going on that led me to leave in the first place but I'm not a bit surprised. Edited January 15, 2012 by wyobilzfan Link to comment Share on other sites More sharing options...
Nanker Posted January 16, 2012 Share Posted January 16, 2012 it all comes down to the entrenched, corrupt local government. I'm sure they're licking their lips ready to funnel the money for their own purposes. Buffalo needs an FBI corruption investigation like Cleveland had a couple years ago. It's their only hope to try and force some change in their govt. For my money, they should begin investigating this. When Cuomo became HUD Secretary in 1997, he axed a federal program that had saved the U.S. $2.2 billion between 1994 and 1997 and reinstituted a system that lost the government money while earning billions for favored friends. He fired a former HUD official whose company designed the program. That wasn't the only money big money lost. When Cuomo was secretary, HUD reported that $59 billion was missing! It couldn't say where they money went, because it failed to produce audited financial statements. Link to comment Share on other sites More sharing options...
KD in CA Posted January 16, 2012 Share Posted January 16, 2012 The city's virtually insolvent school district, for example, paid for elective cosmetic surgery for its teachers and other staff. "Buffalo must have the best looking teachers in the country," says John Faso, a former member of the control board, which lobbied unsuccessfully to have the perk ended. It continues today, to the tune of some $6 million a year. The city also struggles to cut spending because of expensive state-imposed mandates, including a union-friendly binding arbitration law that results in rich public-employee contracts, and a state law that allows unionized public workers to continue receiving the benefits of a contract—including pay increases—even after the contract has expired. Good luck getting concessions from union leaders in new contract negotiations under such conditions. Go Unions!! Sticking it to the evil rich people!!! Link to comment Share on other sites More sharing options...
drinkTHEkoolaid Posted January 16, 2012 Share Posted January 16, 2012 Government isn't big enough to study the best projects and we don't have enough committees to study said proposals and not enough crook politicians to line their pockets. We need to raise taxes to pay the oversight panels and study groups and.union wages. Still think liberal big government is the answer ? Can't imagine why states like Texas and north Carolina thrive while states like NY and Michigan flounder in perpetual incompetence and mismanagement Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted January 17, 2012 Share Posted January 17, 2012 http://www.buffalonews.com/sports/24-sports-news/article713115.ece And... Doesn't New York City reside in the same "business unfriendly" state Buffalo does? Link to comment Share on other sites More sharing options...
B-Man Posted January 17, 2012 Share Posted January 17, 2012 (edited) http://www.buffalonews.com/sports/24-sports-news/article713115.ece And... Doesn't New York City reside in the same "business unfriendly" state Buffalo does? Every time that I conclude that Dave is just another troll....posting inane comments just to get a reaction...he posts a reply that proves he really does not comprehend very much at all. (I would call him an idiot, but I don't want to have to pay DC Tom.) Throwing money at a problem, that came from NY taxpayers to begin with does not make a state "business-friendly" and if you do not understand the relationship that NYC has with the state government and its taxes and payouts, perhaps it would be wiser of you to not comment. . Edited January 17, 2012 by B-Man Link to comment Share on other sites More sharing options...
Alaska Darin Posted January 17, 2012 Share Posted January 17, 2012 Every time that I conclude that Dave is just another troll....posting inane comments just to get a reaction...he posts a reply that proves he really does not comprehend very much at all. (I would call him an idiot, but I don't want to have to pay DC Tom.) Throwing money at a problem, that came from NY taxpayers to begin with does not make a state "business-friendly" and if you do not understand the relationship that NYC has with the state government and its taxes and payouts, perhaps it would be wiser of you to not comment. . To say nothing of the windfall they enjoy from having the world's financial center in their yard. Everyone loves to hate on Wall Street but without it, NYC would make Detroit look like a boomtown. Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted January 17, 2012 Share Posted January 17, 2012 You Conservative morons are pathetic I love netting a whole bunch of you clowns all at once! http://www.nytimes.com/2012/01/17/nyregion/despite-long-slide-by-kodak-rochester-avoids-decay.html?_r=1&scp=1&sq=Rochester&st=cse And new York state killed the camera too, I guess? Rochester doing fine To say nothing of the windfall they enjoy from having the world's financial center in their yard. Everyone loves to hate on Wall Street but without it, NYC would make Detroit look like a boomtown. Another unproved and unprovable load of drivel vomited up by Darin Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted January 19, 2012 Share Posted January 19, 2012 What's the tax rate in Witchita? http://www.nytimes.com/2012/01/19/us/wichita-clings-to-airplane-capital-identity.html?nl=todaysheadlines&emc=tha23 Will the government destroy all the jobs in the country? Link to comment Share on other sites More sharing options...
Alaska Darin Posted January 19, 2012 Share Posted January 19, 2012 You Conservative morons are pathetic I love netting a whole bunch of you clowns all at once! http://www.nytimes.c...ochester&st=cse And new York state killed the camera too, I guess? Rochester doing fine Another unproved and unprovable load of drivel vomited up by Darin Unprovable? NY State Department of Labor Study A couple of highlights: "The fallout from this meltdown has been most keenly felt in the greater New York City metropolitan area" "The REMI model forecasts that between 2007 and 2012, GRP (expressed in fixed 2000 dollars) will drop by $58.4 billion -- equivalent to the combined economies of the Rochester, Utica-Rome, and Binghamton metropolitan areas." ** **This is just because of the economic downturn. Not Wall Street relocating and taking all their high paying and tax positive non-government jobs with them. In summary: NYC depends on Wall Street for somewhere around ONE THIRD of it's revenue. If Wall Street packed up and moved somewhere else, NYC becomes just another liberal cesspool - JUST LIKE DETROIT. There's literally no floor to your idiocy. Link to comment Share on other sites More sharing options...
B-Man Posted January 19, 2012 Share Posted January 19, 2012 There are other liberal root causes to Buffalo's problems. The Atlantic Why Does Buffalo Pay for Its Teachers to Have Plastic Surgery? How a broken collective bargaining system has kept a ridiculous, multimillion-dollar perk alive.By Jordan Weissmann Jan 18 2012 In Buffalo, New York, the heart of the American rust-belt, the public school system pays for its teachers to get plastic surgery. Hair removal. Miscrodermabrasian. Liposuction. If you can name the procedure, it's probably covered. No, I am not exaggerating. And no, this article is not an excuse to make "Hot For Teacher" cracks. When I write that Buffalo's school system pays, I mean it literally. The perk is included as a self-insured rider in its teachers' contract. Therefore, the district has to cover the cost of each nip and tuck itself. There's no co-pay, so the school district ends up footing the entire bill. It estimates the current annual cost at $5.2 million, down from $9 million in 2009. This in a city where the average teacher makes roughly $52,000 a year. The plastic surgery tab would pay salaries for 100 extra educators. If Wisconsin Governor Scott Walker's legislative assault on public sector workers was a prime example of right-wing excess on the issue of organized labor, the story of Buffalo's teachers and their botox should be looked at as cautionary tale for the left. You see, nobody particularly wants to keep the plastic surgery rider. It's an embarrassing mole everybody agrees should be removed, a vestige of an earlier era that the school board would love to scrap, and that the teacher's union has said it's willing to give up. But because of New York's broken collective bargaining system for government employees, it's survived, ugly and in tact. As The Buffalo News has reported, the rider existed for years with little notice. It dates back at least to the 1970s, when "getting a little work done" wasn't par for the course among women (and some men) of a certain age. Instead, it was intended to cover serious reconstructive surgery, on burn victims, for instance. In 1996, the rider was nearly cut. But after the daughter of a district employee was hurled through a windshield during a car wreck, requiring surgery to repair scars on her face and body, union officials lobbied to keep the benefit in place. That was then. In the years that followed, plastic surgery boomed in the United States thanks to non-invasive procedures like Botox and laser-skin treatments. Buffalo doctors began advertising directly to teachers through their union's newsletter. Predictably, the school district's tab fattened. In six years, usage of the perk tripled, and by 2009, about 500 employees were taking advantage of the opportunity to get free cosmetic surgery. A single doctor billed the district $4 million. Now, of course, Dave's knee-jerk response to this will be " so, you are blaming the poor teachers for this, you right-wingers make me sick" . Link to comment Share on other sites More sharing options...
TPS Posted January 19, 2012 Share Posted January 19, 2012 And in the midst of all the negative, Buffalo ranks 4th in the world for income growth over the past two years... My link Link to comment Share on other sites More sharing options...
DC Tom Posted January 19, 2012 Share Posted January 19, 2012 And in the midst of all the negative, Buffalo ranks 4th in the world for income growth over the past two years... My link When you bottom out, where else can you go? Link to comment Share on other sites More sharing options...
Chef Jim Posted January 19, 2012 Share Posted January 19, 2012 When you bottom out, where else can you go? Kind of like someone on unemployment earning $10k a year getting a job paying $40k bragging that in one year he increased his income 400% Link to comment Share on other sites More sharing options...
3rdnlng Posted January 19, 2012 Share Posted January 19, 2012 And in the midst of all the negative, Buffalo ranks 4th in the world for income growth over the past two years... My link It was all Terry Pegula's doing, taking the Sabres to the salary cap limit. Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted January 19, 2012 Share Posted January 19, 2012 Unprovable? NY State Department of Labor Study A couple of highlights: "The fallout from this meltdown has been most keenly felt in the greater New York City metropolitan area" "The REMI model forecasts that between 2007 and 2012, GRP (expressed in fixed 2000 dollars) will drop by $58.4 billion -- equivalent to the combined economies of the Rochester, Utica-Rome, and Binghamton metropolitan areas." ** **This is just because of the economic downturn. Not Wall Street relocating and taking all their high paying and tax positive non-government jobs with them. In summary: NYC depends on Wall Street for somewhere around ONE THIRD of it's revenue. If Wall Street packed up and moved somewhere else, NYC becomes just another liberal cesspool - JUST LIKE DETROIT. There's literally no floor to your idiocy. You are just so stupid When you bottom out, where else can you go? Link to comment Share on other sites More sharing options...
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