Northern Exposure: The Give and Take Between Upstate and Downstate

Upstate, it’s time we have a talk about our relationship.

The State Capitol in Albany. (Photo by Daniel Barry/Getty Images)
The State Capitol in Albany. (Photo by Daniel Barry/Getty Images)

Hey, upstate, we like you. A lot. You’ve got so much going for you: the majesty of the Adirondacks, the ever-improving Finger Lakes wineries and, yes, you, underrated Albany; snobs disparage you but we know you boast incredible museums, cheap yet elegant housing stock and an Olmsted-designed park.

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But it’s time for a frank conversation about us. Region to region. Upstate and downstate. You haven’t been pulling your weight for a long, long time, and many experts on our relationship confirm this. Now, we know, we know, you’ve battled through some rough times: economic blight, IBM jilting Kingston for Westchester, Rochester-based Kodak never comprehending digital cameras and declaring bankruptcy, to name a few. It might have sunk a less resilient region. And we’ve been there for you. But you have been doing so much better lately. This may be tough to hear, but you really must start pulling your weight. (We need to also deal with your control freak tendencies and that oppressive Urstadt Law, but let’s discuss all of that after November 4.)

Oh, you want facts. 

New York City and its surrounding suburbs have long paid more to Albany in taxes than we’ve gotten back in state funding—and the reverse is true for the rest of the state.

Ask David Birdsell, dean of the Baruch College School of Public Affairs. New York City, in his analysis, subsidizes “the north … which the people up north do not understand or appreciate. They’re convinced it’s all us welfare slackers down here in the five boroughs.”

In fact, we’ve paid more than 45 percent of the state’s taxes and revenue—but got back only about 40 percent of the state’s expenditures. Know how much ending that discrepancy would boost our coffers? Between $4 and $6 billion, estimates the Rockefeller Institute, which could be used to improve schools, maybe open a public hospital for a change or give New York City residents—who pay some of the nation’s highest taxes—a modest refund.

By the way, you have a lopsided relationship with Long Island and our other suburbs as well. They’ve contributed at least 24 percent of the money to the state and gotten back just 18 percent of its funding, the Institute found. I mean, we’re doing just fine, but sometimes, it feels like we’re the boomer parents and you’re the millennial kid still living in the basement. And that’s not sexy.

Upstate counties paid just 28 percent of the state’s taxes but benefited from 42 percent of its spending. Does that seem fair?

O.K., you have a point, most of the state’s big earners live in our area—and therefore pay the most taxes on income and bonuses. Kajal Lahiri, distinguished professor of economics at the University at Albany, agrees with you. “Income tax or the taxes out of bonuses form a huge part of the New York State budget,” he explained, “and then that gets distributed throughout the state—and in that sense, New York City supplements other parts of the state.”

Also, as Donald Boyd, senior fellow at the Rockefeller Institute, observes, “People who are in the top 1 percent of New York City probably are not moving upstate, and those jobs aren’t going to come upstate.” Sorry.

But according to Mr. Lahiri, you are doing pretty well in some places. Albany actually has a better economy than New York City—at least measured in unemployment. The capital region has seen a gain from small, high-tech firms in software and health care.

Then there’s Rochester, which lost jobs because of Kodak. “They are now basically gone,” Mr. Lahiri acknowledges. “However, Rochester is doing pretty good, actually.”

Why? Education, with successful schools like the University of Rochester spurring the growth of more technology firms that in turn bolster the local economy almost as well as Kodak did.

Admittedly, what works in some of your cities doesn’t in others, Mr. Lahiri frets. Syracuse, for instance, is home to a highly regarded university with a powerhouse basketball team—Go Orangemen!—but the economy is “stalling” there, he said.

Why have places like Syracuse—along with Western New York, the Buffalo area and the Southern Tier along the Pennsylvania border—struggled so mightily? Mr. Lahiri said despite all those political ads touting government investment and slamming government for not doing enough, it’s unlikely state government can spark the economy at all. “It cannot come from the governor,” he said. “It has to come from the local area business leaders.”

Your business leaders.

Sometimes, we just get the feeling that we are in our own universe, which begs the question: why aren’t we in New York City our own state? Hey, hey, stop crying, we’re not breaking up.

We understand that it’s not as simple as a taxes in, services out equation.

Mr. Boyd of the Rockefeller Institute reminded us of that. “Is there value to … being part of New York [State], and having access to the Adirondacks or other things?” he asked. Are New York City residents “better off or worse off” if somehow separate from upstate? “There are so many other considerations,” he goes on. “There’s a prison system upstate, there’s a university system upstate.”

We hear you, upstate. It’s complicated. Look, we go back a long way, and this was a good, important talk. But let’s continue our dialogue.

This story has been updated to correct that Rochester has been boosted by schools like the University of Rochester, not Rensselaer Polytechnic Institute — which is located in Troy.

Northern Exposure: The Give and Take Between Upstate and Downstate