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Refuel the economy

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The bankruptcy of Detroit should be a fair warning to New York that some of our cities may not be far behind. New York’s problems are rooted in the same quagmire: loss of a widespread manufacturing tax base, loss of population upstate, increased dependence on volatile sales tax revenues and personnel contracts agreed to years ago, which promised rich benefits that are coming due now.

Already, Nassau County and Buffalo are operating under financial control boards, which control spending. In Syracuse, Mayor Stephanie Miner points out that her city’s bill for health insurance for its retired workers exceeds the cost of health insurance for its active workers.

The mayor of Rochester, Tom Richards, said his city has seen “recreation centers, libraries, festivals and events, neighborhood revitalization efforts — all fall victim” to tight budgets. “We see the loss of things that make city and urban living attractive,” he told the Albany Times Union.

St. Lawrence County is in fiscal disarray as it attempts to scrape together enough cash to operate. The county awaits the governor’s signature on a bill that increases the local sales tax 33 percent.

But that infusion of cash merely brings the county even over the mid-term. It will not create an environment that will encourage growth and the creation of new opportunity.

The state has warned Ogdensburg that inpatient care at the St. Lawrence Psychiatric Center will end soon. Several school districts fear they are nearing educational bankruptcy having spent down their fund balances as they pay the bills for rapidly rising pension and health care costs.

New York cities are hamstrung by state law that guarantees employees automatic step increases in compensation even if their labor contract has expired, thus driving costs inexorably higher. Residents must accept less services while paying higher and higher property and sales taxes.

It is no wonder that many New Yorkers have looked to the less-harsh weather of South Carolina or other southern states where taxes are lower and manufacturing jobs abundant. Or to North Dakota’s job machine, which supports its rapidly growing petroleum extraction business.

New York needs to take heed of Detroit and establish a strategy for growth. The governor has forced property tax limitations on local governments and established a lower cost pension tier for new employees.

Those are excellent first steps. But more must be done.

Schools and local governments need incentives to merge. Government labor law needs revision to prevent pyramiding of overtime during the last years of an employee’s career to drive pension payments upward.

And once labor contracts expire, all pay schemes should be frozen until a new agreement is in place. Perpetuation of promises made in an old contract financially straps local government.

But these are only minor adjustments to slow the growth of costs. The ultimate solution is creation of more revenue.

There is an opportunity to initiate a program to rejuvenate upstate and its challenged cities. New York must make an investment in its electric power generation and transmission industry to make New York the envy of the nation with a reliable cost effective supply of electricity. Just last week, New Yorkers strained our electric system by demanding record quantities of power — that occurring despite the moribund upstate economy.

A key to smoothing the way to a better tomorrow would be an investment by the New York Power Authority to increase transmission capacity and develop new sources of power. NYPA should be directed to expand the Taylorville line from Massena to Marcy to import more hydropower from Quebec. The Authority should plan, encourage and build new natural gas-fueled generating facilities in the Hudson Valley, the southern tier and western New York to expand reliable supply while simultaneously removing antiquated coal burning-generating stations from New York’s inventory of power plants.

And the new plants should be powered by natural gas mined from the Marcellus shale, which awaits exploitation in the state. A decision by the governor to allow fracking and an order to the Power Authority to finance and build the necessary facilities will do wonders in putting New Yorkers back to work in decent jobs, which will reinvigorate New York’s rural economy.

A growing economy will assure New Yorkers that their cities will not face bankruptcy and the pain of such financial stress.

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