With the inauguration of a new governor, a visitor to Albany certainly
is swept up by the sense of excitement and great opportunities.
Governor Spitzer brings new leadership, new vigor, and new ideas to
state government. Our goal today is to add to his new ideas.

In announcing his agenda to revitalize Upstate New York, Governor
Spitzer said “The vision and goal of this effort is to tackle the
underlying structural problems [emphasis added], make strategic
investments, and develop new engines of economic growth throughout the
regions.” To implement that vision, he proposes an ambitious 15-point
program.

However, the governor’s announced program does not yet address the
underlying structural problem of how New York State’s system of 1,545
“little boxes” municipal governments is costly, ineffective, and
actually retards regional economic growth.

Let me make seven points to illustrate this.

#1 – Setting aside the five counties (boroughs) that constitute New
York City, there are 57 counties in the state. I identified the central
urban place (city or village) in each of those 57 counties for 1950 and
tracked what happened with them over the next 50 years. Fifty-six (56)
of the 57 cities and villages were worse off (compared to their
neighbors) in Census 2000 than they had been 50 years ago. The only
“little box” city that was better off in 2000 than it had been in 1950
was the city of Saratoga Springs, which was actually a village with a
town’s geography masquerading as a city. Fifty-six out of 57 – going
backwards.

#2 – New York’s major cities have the second worst average credit
ratings in the country. Only New Jersey’s cities (another “little
boxes” state) have worse credit ratings. Governor Spitzer proposes to
“significantly expand state aid to depressed upstate cities and towns”
but also promises that “with this new aid, we will require
municipalities to practice better financial management and make
stronger efforts to achieve governmental efficiencies.”
 
Let’s look at what’s been happening to many upstate cities’ property
tax base (adjusted for inflation) over a recent 15-year period
(1990-2004):

* Schenectady 	- 11%
* Buffalo	-19%
* Syracuse 	-21%
* Utica 	-27%
* Rochester 	-37%

Their tax bases are hemorrhaging. State government decrees that cities
must have fixed boundaries in the Age of Sprawl and then does nothing
to control sprawl. It’s a lethal combination. One cannot fix the
problem by just requiring cities to “practice better management.” The
state’s “rules of the game” have dealt cities a hand that they cannot
win.

#3 – Suburban sprawl and core abandonment now are not just eroding the
cities but many older suburban towns. It’s not just Buffalo but
Tonawanda and Cheektowaga. It’s not just Rochester but Irondequoit,
Gates, Greece, and Brighton. And so on, region by region. The older
suburban towns are being dealt fewer and fewer winning hands now.

#4 – I strongly doubt that the governor and legislature will summon the
political will to mandate massive municipal mergers although they
probably have the constitutional power to do so. I certainly don’t know
whether or not the state Court of Appeals would rule that Article IX of
the state constitution limits the legislature’s power in that respect.
But, as a practical matter, it’s too late for mergers on any meaningful
scale.

Consider this question. What is the real city of Albany? Is it just the
actual 21-sq mi, 96,000-person municipality that we know? Or, in terms
of the way people really lead their lives, moving throughout the region
to work, shop, play, and seek services without regard to municipal
boundaries, is the real city of Albany actually the entire Albany
urbanized area – 560,000 people living in 284 sq mi? Clearly, the real
city of Albany is the latter.

Who are the real city of Albany’s peers?    Who else has around 500,000-600,000
residents living in an area of around 200 or more sq mi? Denver,
Nashville, Charlotte, Fort Worth, Portland, Oklahoma City, and Tucson.
But these are all actual municipalities with unitary governments. They
have big $30 billion plus tax bases and Aa and Aaa credit ratings.

When you add up all the individual municipal tax bases, the real city of Albany has about a $30 billion plus tax base but it’s broken up among 50 to 60 “little boxes.” The biggest slice is the $3.5 billion tax base of the actual City of Albany with its run-of-the-mill A2 credit rating. This region just cannot compete with the Charlottes and the Portlands. They don’t even consider you “the competition.” And a municipal merger here or there will not create equivalent “Big Boxes” in New York State that can compete.
#5 – To be able to compete with the “Big Boxes,” the state must mandate that the many little boxes act like a “Big Box.” The state must mandate inter-governmental collaboration: regional, anti-sprawl land use and transportation planning; regional “fair share” workforce housing; unified, regional economic development programs; and regional tax base sharing to share the benefits of growth. If the governor and legislature can summon the sense of urgency for change that the voters expressed, they can do this.
#6 – But if the governor and legislature are not prepared to mandate reform, they must at least enact new “rules of the game” to strengthen local governments that want to attack serious regional problems through real collaboration. They should enact regional compact legislation that would authorize county government to take the lead in organizing multi-municipal compacts around critical issues that transcend municipal boundaries, such as I’ve listed above. The regional compacts should be rewarded by strong state financial incentives, such as priority for state road, sewer, water, park grants, etc. The new state law should also authorize a compact-organizing county to hold a special election. If, protecting their “turf,” too many city councils and boards of supervisors refuse to ratify the compact (highly likely, in my opinion) the county could hold a referendum of all the voters in the compact area. It would be a “one box” election; each voter would vote not as a resident of their “little box” but as a resident of the whole “Big Box.” If a majority approved the compact, it would be binding on all the municipalities. If the voters rejected the compact … well, that’s democracy. They’ve chosen to live with the status quo.
#7 – Housing is a vital regional issue. The central regional question is always what gets built where for whose benefit? Since residential property is typically about two-thirds to three-quarters of a community’s property tax base, economically segregated housing patterns lie at the heart of fiscal disparities from municipality to municipality. Economically segregated neighborhoods result in economically segregated neighborhood schools. High poverty schools are low performing schools. Housing policy is school policy. As my colleague john powell says, “Space, not race, has become the mechanism to divide people.” Jim Crow by income is replacing Jim Crow by race. It enforces the “segregation of opportunity.”
Our coalition is calling upon the governor and legislature to commit at least $100 million annually to a State Housing Trust Fund. With a dedicated funding source, the Housing Trust Fund would be a key tool for helping meet the need for affordable shelter for many. In concert with regional compacts, the Housing Trust Fund could move beyond affordable shelter to create “opportunity-based housing” that provides access to good jobs and good schools in mixed-income communities.
Promoting racial and economic diversity everywhere through mixed-income communities is the best housing policy, the best school policy, the best fiscal policy – the best policy for the Empire State of the 21st Century.