ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed

City Journal

search
Close Nav

Pay-to-Play Government

eye on the news

Pay-to-Play Government

The Joseph Percoco verdicts reveal how doling out cash has become the unquestioned premise of running New York. March 14, 2018
Politics and law
New York
Economy, finance, and budgets

A federal jury in Manhattan did more than convict one-time gubernatorial uber-confidant Joseph Percoco on felony corruption charges—it also delivered a damning verdict on Governor Andrew Cuomo’s stunningly ineffective upstate economic policies.

Both Percoco’s crime and Cuomo’s policies involved giving people money to do what they otherwise wouldn’t have done—but while Percoco is likely headed to prison, the upstate economy is going nowhere. Neither circumstance will be helpful to the governor as he seeks a third term this fall, but neither will be fatal, either—not given Cuomo’s eight-figure campaign accounts (largely derived from the state’s notoriously lax fundraising laws) and New York’s tolerance for dodgy elected leadership. What Percoco did was a crime; what the Cuomo administration has been doing for almost eight years—dishing out greenbacks to interest otherwise-disinterested investors in an economic wasteland—is perfectly legal. But that can be a distinction without a functional difference when politicians are pushing free cash around the table, especially when those politicians have almost total spending discretion, and when such rules as exist are opaque and politically driven.

The governor’s stated goal was simple enough. Cuomo said that he would revive upstate’s blighted economy, but he never addressed what had wrecked it. Some of the region’s problems lie beyond any governor’s reach—the Rust Belt, for instance, extends far beyond Buffalo. Upstate winters have always been a formidable investment barrier. And New York State has worked overtime to degrade whatever competitive advantages it might once have enjoyed: New York is heavily taxed, over-regulated, Green-obsessed, and ranks among the most business-unfriendly states in the nation.

And yet, as New York City has repeatedly demonstrated over the past 25 years, effective executive leadership can make a difference. Rudy Giuliani made New York livable again, and Michael Bloomberg lifted the city out of its post-9/11 depression and set it on course to reclaim its status as a global economic engine. Bloomberg’s critical insight was that money matters, but it’s not all that matters. Potential investors are attracted to New York for many reasons—among them location, prestige, and opportunities for economic synergies. They’re often willing to pay tax and regulation premiums to settle into equally premium space. It’s good for business.

So Bloomberg largely refused to play the “incentives” game, offering relatively few of them to lure investment. Instead, the administration did its best to remove impediments to growth, while making targeted investments of its own. Exhibit A is the rezoning of Manhattan’s long-fallow Far West Side. Along with the City Hall-financed extension of the No. 7 subway line into that area, this initiative touched off a construction explosion that will last at least another decade, created thousands of new jobs, added billions to the city’s property-tax rolls, and created development ripples now lapping over Brooklyn and Queens.

No parallels are exact, but when Andrew Cuomo assumed the governor’s office in 2011, he took precisely the opposite tack. He set about offering “incentives” to bring in new investment, and he left the extraordinary disincentives to doing business in New York alone. But laissez-faire won’t cure the dysfunction caused by tax-vacuuming, special-interest-driven government; it will take aggressive executive effort, requiring skill and political courage, to pull that off. These are rare commodities in Albany, and the Cuomo administration is no exception.

But, again, the pay-to-play arrangement isn’t working, either. The Percoco trial will be followed shortly by a second proceeding, this one alleging corruption in a Syracuse-area development project financed by administration “incentives,” and involving another Cuomo administration superstar—Alain Kaloyeros of the State University Polytechnic Institute. Meanwhile, the upstate-revival program’s bellwether, the Buffalo Billion project, has produced virtually nothing of value. Lesser undertakings, including a $15 million film-production hub in Onondaga County, have flopped. And Cuomo’s tax-dollar-buttressed gambling casinos are vastly underperforming expectations.

While Bloomberg’s effort to get government out of the market’s way was spectacularly successful, Cuomo’s decision to run what amounts to an anti-free-enterprise administration has produced nothing but stagnation, further decline, and eye-popping scandal. Expect more of the same.

Photo by Spencer Platt/Getty Images

Up Next
eye on the news

Teachers’ Choice

Mayor de Blasio’s second pick for schools chancellor won’t buck the mayor or his union allies. Bob McManus March 9, 2018 Education, New York

Contact

Send a question or comment using the form below. This message may be routed through support staff.

Saved!
Close