New employment data show Buffalo lags behind rest of state

Niagara Wheatfield Tribune, December 28, 2006

New data released last week by the Department of Labor show that New York employers continue to grow jobs at a steady pace, but that the Buffalo region lags behind other areas of the state.

According to New York State Chief Economist Stephen Kagann, over the year trom November 2005 to November 2006, private employment rose 62,300 or 0.9 percent. New York City, described as the leading regional beneficiary of the federal 2003 tax cuts, continued to expand with the private-sector job gains of 42,600, or 1.4 percent.

From November 2005 to November 2006, the unemployment rate declined in every one of the state’s 62 counties.

“Today’s positive economic news that unemployment has fallen in each of our 62 counties during the past year is a clear demonstration of how we have turned New York around and achieved great economic and fiscal successes over the past 12 years,” said Gov. George Pataki. “This is the result of strong growth not just in New York City but across upstate in areas like Elmira, Glens Falls and Syracuse. Working together with my colleagues in the legislature, we cut taxes by more than $140 billion, we eliminated thousands of burdensome regulations and unleashed the entrepreneurial spirit of New Yorkers, helping to lead to the creation of nearly 700,000 new private sector jobs.”

Historically, secular strength in financial markets accompanies low taxes on investments, Kagann said, and high taxes are associated with weak financial markets. From 2000 to 2003, the financial market collapse and the attack on Sept. 11 cost New York City 237,000 private-sector jobs.

“President Bush’s 2003 reductions in taxes on dividends and capital gains boosted the returns on financial assets,” said Kagann. “The city’s financial firms, particularly the securities industry, staged an immediate and dramatic recovery and posted record results – and they continue to do so to this day. Directly and indirectly, financial services are responsible for much of the strength in the city economy, not to mention soaring city and state revenues.”

Kagann notes the 2003 federal tax cuts are scheduled to expire in 2010, creating what he called “a de facto tax increase.” He said failure to renew these tax cuts would endanger the prosperity that has propelled income, jobs and tax revenues to these higher levels and would cause New Yorkers to send billions more in unreturned tax dollars to Washington each year.

Over the 12 months, most regions of the state expanded private employment, but private payrolls fell in Buffalo (-0.3 percent), Utica-Rome (-0.3 percent) and Rochester (-0.2 percent).

Among the upstate regions west of the Hudson, Binghamton, supported by strong manufacturing, is growing private jobs at the fastest rate since early 2001.

“As we end 2006, New York State’s unemployment rate is reaching toward record lows, lower than the national average, our credit rating is the highest in a generation, and we are on track to end the year with a surplus approaching $2 billion, bringing our total in reserves to $4 billion,” Pataki said. “When I took office 12 years ago, New York had virtually nothing in reserves, a $5 billion deficit, and our credit rating was tied with Louisiana for the worst in the nation.”

“As we enter 2007, I am confident that our state is on a firm financial footing that will allow New Yorkers to build on the accomplishments we have realized over the past 12 years. I thank New Yorkers for the opportunity to lead our great state for the last 12 years, and am both hopeful and confident that Governor-elect (Eliot) Spitzer will lead our state in a manner that continues the economic ascension we began in 1995.”