From a business perspective, nothing could be worse during this period of economic uncertainty than the chaos and instability that have characterized New York state government during the past two years.
As things stand, there is every chance that the State Senate will be paralyzed by partisan rivalries right up to the 2010 election, and perhaps beyond. In the interim, the New York economy will continue to drift, with job creation coming from sectors that rely on public spending--health, education, public construction and government bureaucracy--while the tax revenues needed to support these sectors evaporate.
What should happen next in Albany is a coming together of leaders from the public and private sectors, business and labor, to forge a long-term plan for economic recovery and growth. This plan should be statewide in scope, while reflecting the unique assets and opportunities of each region.
Gov. David Paterson's appointment of Richard Ravitch as lieutenant governor gives us a state official who is uniquely capable of leading such an effort. But Mr. Ravitch is hostage to the same contentious politics that have disrupted New York City school governance and derailed efforts to deal constructively with the state's fiscal and economic crises.
If fractious politics continue, New York will see further erosion of its manufacturing, agricultural and service sectors and zero growth in technology-enabled emerging industries. There will be no resources to support education and research. New York will be left out of the innovation economy.
Components of an economic plan are easy to identify:
Replace failed Empire Zones with a program aimed at building advanced industry clusters offering high-paying jobs in every part of the state.
Help entrepreneurs start and build businesses in these clusters through expanded access to capital, more favorable regulation and targeted state procurement policies.
Capture research and business-support operations that corporations and banks are looking to bring home as the cost advantages of running these operations overseas diminish. Offer a combination of tax credits, low-cost power, and creative partnerships with universities and community colleges.
New York state is rich in assets: a deep and diverse talent pool; many of the world's leading business and financial firms; outstanding academic, research and cultural institutions; and much more. In the past, the richness of our resources has allowed New Yorkers to tolerate some sloppy stewardship in state government. What comes next in Albany will, hopefully, reflect a recognition that New York no longer has that luxury.
Crain's New York Business published this op-ed on July 27, 2009.