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This is the final installment of New York: State in Decline, an 8-part series by Albany bureau chief Jay Gallagher on New York's state government and how it often fails residents and businesses. In Part Eight, Gallagher offers an overview of the state's economy and examines some of the proposals to invigorate the business climate.

A biography of Jay Gallagher, and a
Q&A with the author of this series.

Just three years ago, Keith Wilson and his wife were living what most people would consider to be the good life in Hermosa Beach, Calif., a waterfront suburb of Los Angeles known for its exquisite sunsets.

He had a good job with a dynamic bank, a 30-minute commute considered manageable by Southern California standards and, of course, warm, sunny weather 12 months a year.

Then he packed up and moved to the Rochester area to become the chief financial officer of PAETEC, a fast-growing telecommunications company.

"When I tell people back there that we had 10 feet of snow last year, but lost out on the Golden Snowball Award (for most snow for an upstate city) to Syracuse, they just shake their heads," Wilson said.

Wilson's tale qualifies as a man-bites-dog story because New York annually loses tens of thousands of people, many of them young professionals like Wilson, to Sun Belt locations and the companies, many of them refugees from upstate winters, that have relocated there.

Many of those who have stayed or who moved to upstate New York in particular cite special circumstances — ties to a family, a pool of workers skilled in a specific area or a love for the outdoors.

State officials are aware that it is the economic climate, and not meteorological conditions, that impact the decisions companies, and workers, make when it comes to locating or relocating.

So, now, state and local governments offer hundreds of millions of dollars a year in tax breaks and other incentives to dozens of companies. The money is meant to induce some businesses to relocate to New York -- or to keep companies from leaving the state.

The incentive program has had successes and failures. The experiences of four companies -- Refcon, Intercos, PAETEC and Fala Technologies -- suggest how the program is supposed to work, and how it sometimes does not work.

One way the state is trying to rebuild its economy is by luring well-paying high-tech jobs.

The state spent $300 million to build a nanotechnology center at SUNY-Albany and is developing four similar centers of excellence in other parts of the state.

The results, so far, have been modest, but officials express confidence in the program.

Meanwhile, some business people believe the only way to improve the economic climate in New York is by reforming state government.

Mark Bitz, an Onondaga County turkey farmer, has organized one initiative to change the way business is done in the state. His focus is on the nominating process in both major political parties.

Reinforcing such efforts was the recent publication of a New York University report that claimed New York has the "most dysfunctional" legislature in the United States.

The report seems to have generated some momementum for reform, but long-time Albany-watchers are skeptical that any signiciant changes will be made.

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(Photo: Jamie Germano)
Keith Wilson moved his family from sunny southern California to take a job in Rochester.