"Poor old Buffalo": Wasting more money on what can only be fixed by conservative fiscal policy...

One of The Motley Monk's friends used to say with a sad voice, "Poor old Harry."  It seems that Harry used to cry "poor mouth" to this friend, even though everyone knew that Harry had plenty of dough.  And so, whenever Harry's name would come up in conversation, this friend would lower his head, look down at the floor, nod his head back and forth, and in that sad voice say, "Poor old Harry."

An article in the Wall Street Journal might have been aptly titled, "Poor Old Buffalo."

Ever since Buffalo, New York, began losing its manufacturing base in the 1950s, it steadily declined into one of the nation's poorest urban areas.  To stem this tide, the federal and state governments poured hundreds of millions of dollars into redevelopment plans.  By 2004, Buffalo had received more federal redevelopment aid per capita than any other city in the country.

How much federal redevelopment aid?

More than 500B since the 1970s.

And what does Buffalo have to show for this largess?

Virtually nothing.  In fact, the poverty rate today is nearly 29%.

So, what does New York's Governor Andrew Cuomo plan to do?

He recently announced $1B in incentives to attract new investment in Buffalo.

In the Wall Street Journal article, Steven Malanga argues that this new infusion of money will be wasted for the simple reason that Buffalo is inhospitable to new investment due to its steep tax rates and the high cost of local government.  To wit:

• A Buffalo resident pays 25% more in income taxes than does the average resident in America's 100 largest metro areas.
• Buffalo's 8.75 percent sales taxis the 5th highest among the country's 120 cities with more than 200k residents.
• Buffalo's  property-tax burden ranks in the top 10% nationwide.

So, where has all of this tax money gone and where is it going?

According to Malanga:

• To support a spendthrift local government that nourishes itself at the expense of the private sector.
• To fulfill a union-friendly binding arbitration law that results in rich public-employee contracts.
• To fulfill a state law that allows unionized public workers to continue receiving the benefits of a contract even after the contract has expired.

Has the sun set on Buffalo?

Reading these statistics, all The Motley Monk can do is lower his head, look down at the floor, nod his head back and forth, and in a very sad voice say, "Poor old Buffalo...a statist's Paradise."


Let the discussion begin...



To read the Wall Street Journal article, click on the following link:
http://online.wsj.com/article/SB10001424052970204409004577156603296740624.html