Cuomo’s billion: Pay careful attention to the language
by Geoff Kelly - posted 8:35 pm, January 4, 2012
AV columnist Bruce Fisher sends in this dispatch on Governor Andrew Cuomo’s State of the State promises to Buffalo:
A newly revised version of a Penn State study of the powerful positive impact of locally owned businesses was released just before New York Governor Andrew Cuomo announced a $1 billion economic development package for Buffalo. Citing the persistent poverty and population decline of Buffalo, Cuomo announced an unprecedentedly large set of inducements for the area, specifically targeting out-of-town investors.
“We know from experience that large investments in growth industries can pay substantial dividends,” said Governor Cuomo in his second State of the State speech on Wednesday. “We saw great results from a substantial, sustained state investment,” he said, citing the recent history of growth in high-tech industry in Albany. The state-funded Center for Excellence in Nanotechnology is one of the most often-heralded success stories.
Penn State economist Stephen Goetz earlier this year published his study of the impact of locally owned, stand-alone firms with between 10 and 99 employees compared to large, remotely headquartered firms that employ more than 500 workers. He found that the small firms create a much greater overall economic impact, including paying higher wages, than the large, out-of-town firms.
Goetz and his co-authors, who report their findings in the current issue of Economic Development Quarterly, studied data from the Edward Lowe Foundation on the economic growth and residence status of business owners in 2,953 US counties, including both rural and urban counties. “This is really a story about startups,” said Goetz. “Many communities try to bring in outside firms and large factories, but the lesson is that while there may be short-term employment gains with recruiting larger businesses, they don’t trigger long-term economic growth like startups do.”
Cuomo said in his speech that he will look to the recently-empaneled Buffalo Regional Economic Advisory council, co-chaired by UB President Satish Tripathi and Larkin District entrepreneur Howard Zemsky, for advice. “Let’s empower the Buffalo Regional Council to develop a viable plan to create thousands of jobs and spur at least $5 in new investment and economic activity.”
“Today,” said Cuomo, “I say to national and global industries: Come to Buffalo. The State of New York is ready to invest $1 billion in a multi-year package of economic development incentives,” he said, in order to leverage a five-to-one return on investment. Cuomo also announced major initiatives in energy, including seeking increased hydropower from Quebec, increased “fossil fuels” from Western New York for Downstate users, and a plan to create more Buffalo-area access for renewable energy, including hydro and solar, that is generated regionally.
Buffalo Mayor Byron Brown responded to the governor’s statement by stating that developments like Canalside and the Buffalo Medical Campus were already underway and should receive further state investment. The recent recommendations of the Regional Economic Council, however, made no reference to Canalside, focusing instead on workforce investment, technology development and various anti-sprawl initiatives.