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Region needs solid boost Governor names new development chief but now must make upstate office work

Observers who had hoped Gov. Eliot L. Spitzer would name an upstater to head the upstate division of the state economic development agency might be disappointed he chose a Pennsylvanian. But the governor's prime criterion for his selection was the ability to get the job done, and Daniel Gundersen looks like the real thing.

Gundersen has performed this kind of work for two states and one large city, and with a notable record of success. With his selection, the Empire State Development Corp. will now have two leaders, one in the agency's long-standing office in New York City, focused on downstate development; and a new one in Buffalo, headed by Gundersen, responsible for reviving the moribund upstate economy. He'll have his work cut out for him.

Gundersen's record in Pennsylvania, where he runs the day-to-day operations of the state's economic development office, and before that in Maryland and Philadelphia, is cause for optimism. Under his direction, Pennsylvania last year was North America's top cross-border investment in attracting new manufacturing. In Maryland, he lured several hundred high-paying jobs . . . out of New York City. Working as co-head of the development corporation, he'll now have the chance to keep such jobs in the state.

Here, he will need help to get that done. That help can be divided into two categories. First is the staff he will have in his Buffalo office. The earliest test of the office's potential will be in how well it is staffed, in terms of the number of workers -- still undecided -- and, more important, their experience in real economic development. He and Spitzer should know upstate is watching.

The first step is encouraging. Spitzer also appointed attorney Kenneth A. Schoetz, a lifelong Western New York resident, as the upstate division's chief operating officer. Schoetz is well aware of this region's economic pain, and as a longtime aide and head of Spitzer's Buffalo office when he was attorney general, he already has a working partnership with the new governor.

The other help Gundersen will require is no less important but entirely out of his control. Jobs and population haven't fled because New York lacked an upstate development czar; they fled because a dysfunctional government made this state too difficult to bear.

New York's high taxes, exorbitant workers' compensation rates, arcane regulations and unbalanced labor laws plainly describe the central fact of this state government: It is beholden not to voters or taxpayers, but rapacious special interests. Together, they have driven upstate into the ditch.

Spitzer's election campaign was all about changing that dynamic, but to accomplish that, he will need the cooperation of the Legislature, meaning of course, its two leaders, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno. That won't be easy to secure, but without it, Gundersen's prospects are hobbled. Upstate might improve under his attention, but it can't become more than the state's competitive disadvantages allow.

Spitzer started his reform of the state's development arm by saying he would move the entire Empire State Development Corp. upstate. He then said he would have co-equal upstate and downstate branches. He now needs to make that "co-equal" status a reality by providing a staff equal, in numbers and expertise, to the downstate division serving a much healthier economy in New York City.

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