The Roaring '90s did not completely bypass upstate New York. A jump in personal wealth has shown itself in increased charitable donations, as well as in swelled state tax coffers.
Although the nation's long economic expansion has not brought a significant number of new private-sector jobs to most of the state, New York residents are enjoying an unprecedented jump in personal wealth.
In 1995, New York residents claimed $14.5 billion of capital gains from the sale of stocks and other properties, a figure that jumped to a whopping $32.3 billion in 1997, according to the most recently available IRS data.
Primarily, the rich are getting richer, but some of their money trickles down. Big houses built by wealthy area residents employ carpenters and other skilled workers and helps sales of furniture stores and other retailers.
Increased capital gains tax revenue helps the state cut property taxes, which benefits homeowners.
The IRS data does not divide the state by region, but about 75 percent of the state's capital gains in 1997 was claimed by individuals with adjusted gross incomes topping $200,000.
Capital gains in taxable form are primarily paid by the wealthy, said Lewis Mandell, dean of the University at Buffalo School of Business. The broader population benefits, however, when the state collects its share of the capital gains through tax revenue, he said.
"Anything that causes tax revenues to jump is good for all of us. Although this may not last," Mandell said.
Leaders of Western New York charities noted that the increasingly wealthy are reaching out to the needy.
"The people of Western New York are, in their hearts, very generous and very concerned about those in the community that aren't doing as well as they are. We are the benefactors of those in the community who are doing well," said Monsignor Henry J. Gugino, diocesan director of Catholic Charities.
New York residents made $6.7 billion in charitable donations in 1995 and increased their giving to $9 billion in 1997, according to the American Association of Fund Raising Council.
Monsignor Gugino and other fund-raising executives said the number of stock donations to their charities has risen steadily in the last three years.
"If you look back two or three years, there were about 20 people who donated stock. Now, it's more than 100 people," said John Garfoot, vice president of finance and administration for the United Way of Buffalo and Erie County.
The local United Way has established accounts at most brokerages within the last three years to accommodate the increasing number of donors who want to give stock.
Stock gifts allow donors to avoid paying capital gains taxes.
The United Way sells the stock after receiving the donation.
"The position we take is, you have given us a gift and you know what the value of that gift is. We don't want to take the risk of the equity falling," Garfoot said. "We don't want to take that AOL stock at $110, hoping it will go to $125, and watch it fall back to $80."
Garfoot pegs the value of stock donations during the 1998 campaign at about $300,000. The local United Way campaign netted $17 million in 1995 and $18.8 million in 1998, healthy growth for a community losing population.
The fastest growing segment of the campaign is large gifts. In 1997, 35 donors gave $10,000 or more to the United Way of Buffalo and Erie County. Seventy gifts topped five digits last year.
"We don't attribute that all to the stock market, but it certainly doesn't hurt," said Robert M. Bennett, president of the organization. "The potential for that (large gifts) is quite extraordinary still. If the stock market is the cause of that, wonderful."
The heart of the United Way campaign is still the tremendous number of individual contributions made by area residents through payroll deduction, United Way officials said.
Affluence is also showing up as increased consumer spending in Western New York. Several local home builders said custom homes were the hottest segment of their market this year. Increased home building puts skilled laborers, such as electricians and plumbers, to work.
Essex Homes had a handful of custom orders, each topping a half million dollars, under construction this summer. The median home price in Western New York is about $85,000.
New car sales in the Niagara Frontier were up about 10 percent during the first half of the year. A large segment of the increased demand was appetite for sports cars such as the Porsche 911, which starts at $71,000.
Checkpoint Foreign Car Sales & Service in Tonawanda was about 30 BMW's ahead of last year's pace by July.
"We're selling as many as we can get," sales manager Greg Lewis said.
New York State's Department of Taxation and Finance collected $1 billion of capital gains tax in 1995, an estimated $2.4 billion in 1997 and projects capital gains revenues of $3.3 billion for the 1999 tax year.
The extra revenue helped Albany pay for many things, from the school tax reduction (STAR) program that eased the property tax burden to extra education spending for younger New Yorkers.
Although the stock market has been a one-way elevator, heading up, for most of the decade, it does go through down times. The question is, what happens in upstate New York if the faucet runs dry?
The biggest impact may hit Albany, if the capital gains revenue reverses ground. The bigger the numbers get, the higher the risk, said Sen. Richard Dollinger, D-Rochester.
For example, projecting 10 percent growth on $1 billion of capital gains revenue is a $100 million increase, but projecting the same growth on $3.5 billion means banking on an additional $350 million.