Pataki and the Upstate Economy

Polls show New York Voters say the economy is their top concern this election season. Republican governor George Pataki argues he's the best candidate to deal with the current recession because of his success in creating 600 thousand jobs over the past 8 years. But most of those jobs were in New York City and the suburbs - which prospered during the boom years on Wall Street. WNYC's Beth Fertig traveled to Buffalo recently to see what Pataki's policies have done for the upstate economy.

There isn't a lot of foot traffic in downtown Buffalo. Even at lunch hour, the crowds on Main Street are small. On this day the only attraction is a farmers market just outside a food court.

Once a thriving steel town, Buffalo has yet to recover from the loss of its manufacturing base. Trish Coppola surveys the quiet streets with shops that are still lying vacant. She works nearby and says there isn't a lot going on.

COPPOLA: We need more stores downtown. We need grocery stores downtown. We need people to move downtown. Because I'm sick of going to drug stores on my lunch hour. It's the only place there is to go!

And yet, there are signs of life. Buffalo's nightclubs are thriving. A few banks and telecommunications companies have been expanding lately. And office buildings are beginning to attract new tenants.

Three years ago, Jim Barnes moved his Digicon printing company from the suburbs of Buffalo to a former windshield wiper factory downtown.

BARNES: Right now we're doing some holiday promotions for Transworld entertainment which owns a couple of thousand record stores and media outlets.

Barnes had an incentive to move to come here. His company is located in what the state calls an Empire Zone. A tax free zone created to lure more business to economically lagging regions. Barnes says Digicon is saving 30 to 40 thousand dollars a year in taxes. He bought a new printing press. And he's been able to expand to 85 full time employees.

BARNES: We've probably grown by 6 people since we've been down here. That doesn't sound like much but that's almost a 10 percent gain in employment.

But not everyone at Digicon has prospered from that growth.

Outside, a few temporary workers from the packaging room are taking a break. They make about 7 to 8 dollars an hour. Half as much as Digicon's highly skilled full time staff. Omar Cobert and Sahi Ingram - who both have kids to support - say the company's expansion hasn't put more food on their tables.

OMAR: I'm saying a couple of other people got good jobs, but as far as the lower class we're still on the ladder trying to get to the top. SAHI: So! I don't think nothing changed in Buffalo, I think it's the same. I've been living in Buffalo for 30 years, you know what I mean nothing changed. Everything the same.

The pessimism outside Digicon, and the optimism inside, are both indicative of what's happening now in Buffalo. Governor Pataki has tried to help the economy by investing in programs like the Empire Zones. The state has also cut business and personal taxes by 25 to 30 percent. Today, New York is no longer ranked last in the nation for job growth - as it was under Pataki's predecessor, Mario Cuomo. But despite these efforts, Buffalo's poverty rate has barely budged over the last decade. It was 26 percent according to the 2000 Census. Meanwhile, the city's population declined by 11 percent.

Buffalo's mayor, Anthony Massiello, acknowledges there's still a long way to go. Yet the Democrat has endorsed the Republican governor because of the progress he's seen so far.

MASSIELLO: I mean there are a lot of examples here where the state has come to the table and rolled up its sleeves to help small business and some giants retool, reinvest in their capital and either maintain or expand their jobs.

Under Pataki, the state spent 88 million dollars on loans and grants in Erie County and Buffalo alone, luring companies such as General Motors. The state has now committed 110 million dollars to build a high tech medical research center. There are plans to help redevelop the abandoned waterfront. And the Governor has been ubiquitous lately, awarding grants like one to a childcare center in an African American church.

PATAKI: This will allow up to 100 children from here, from Buffalo, children during their school ages from 6-16, the chance at this family life center

The fact that many of these announcements have occurred in a gubernatorial election year has not gone without notice. Len Lenihan, chairman of the Erie County Democratic Party - which is endorsing McCall - says the Governor's approach to the region has not been consistent.

LENIHAN: Basically it's been what I call targeted grants to selected business and also silver bullet projects. Yes the state has helped us very much and yes we're appreciative, and both parties played a role, but this area needs comprehensive revitalization.

The lagging upstate economy is a big issue in this election season. Pataki's opponents say any growth was driven by the boom on Wall Street - and didn't make its way up to the counties north and west of Putnam. Here's Carl McCall at a recent televised debate.

McCALL: If upstate New York were a separate state we'd be 50th in the nation in terms of job growth. Because Governor Pataki's approach to Economic Development has been to provide contracts to relatives and help people who really don't need it. My plan is to professionalize economic development.

Both McCall and Tom Golisano, of the Independence Party, have criticized the administration for giving out hundreds of millions of dollars in subsidies to encourage companies such as IBM and General Electric to stay in New York. These efforts are aimed at producing and keeping jobs. The Pataki administration notes that most of these companies have exceeded their targets for job creation and retention. But upstate companies have had more trouble lately. Nearly a third of them failed to meet this year's goals.

Whether that's a product of policies or the national recession is hard to tell. Richard Dietz. an economist with the Federal Reserve Bank of Western New York, says it's also hard to know what would have happened without the Governor's grants and tax cuts.

DIETZ: You know upstate's particular situation has been one where economy not growing much, it's been going through a structural shift over past 3 decades so it's difficult to say broadly speaking if economy helped by these policies. That's not to say these policies are harmful but it's again very difficult to determine what the impact has been.

Last week, Governor Pataki was asked why he thinks places like Buffalo are still struggling 8 years after he was first elected.

PATAKI: Well I think if you take a look at what we've been through over the course of the last year plus, a national recession, a dramatic decline in the stock market, the horrible attacks of September 11th, the entire country has felt the impact of that. Yet still today we have over 600,000 more private sector jobs.

But Pataki's opponents claim the state is in a weaker position to handle the current recession because of the way he managed the budget. Taxes are still among the highest in the nation. Many counties are now raising property taxes. (Partly because of the economic downturn, but also because the state made them pay more for Medicaid.) And New York is still tied with Louisiana for having the lowest credit rating in the nation, according to Moody's Investors Services.

In downtown Buffalo, it's not hard to find someone concerned about the future. At Maureen's Flower Market, store owner Maureen Bartley says her business is growing, now, after three years of hard work. But looking around at the abandoned brick buildings here east of Main Street, she's skeptical about the prospects for other companies.

MAUREEN: We need more blue collar jobs, that's what we lost in Buffalo 20 years ago when our steel industry went down. We need more blue collar jobs where people can make a nice living, go home, take care of their family and be proud of what they're doing.

And that's a difficult task for whomever is elected governor. For WNYC I'm Beth Fertig.