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THE VIEW FROM ALBANY: PATAKI AND SILVER SPEAK

[Interview with Assembly speaker Sheldon Silver.] Q: What's your take on why upstate New York is lagging behind other parts of the Rust Belt in job growth?

Silver: I think we're still doing economic development that's a one-size-fits-all approach. The Urban Development Corp. -- or whatever they call themselves now -- probably the only forward-thinking change they've made is they've changed the name to Empire State Development Corp. They're still looking to put bandages on bleeding, on big companies that have threatened to leave. They throw money at them to get them to stay. And the reality is . . . that big companies in New York have hemorrhaged in terms of loss of jobs.

The only area that has shown growth in jobs, upstate as well as downstate, is the small-business area. And the economic philosophy of Empire State Development Corp. ignores small businesses. That's a mistake.

Q: What we hear from the private sector is that the entire economic effort in New York State is broken up into so many pieces at the local level that there's really no way it can be effective. Whose fault is that?

Silver: I think that's the failure of the (Empire State Development Corp.), really, to coordinate all of it, and to really come through with a direction. I've done some business forums around the state, and things that I hear from all businesses is the lack of available capital is what leads to the failure to develop new entrepreneurial pursuits in this state.

Q: How badly do high electric rates hurt the state's economy?

Silver: It's very important. The cost of electric utilities in New York is at least 50 percent above the national average, probably more.

The Public Service Commission has gone through a review of the electric energy companies and put forth regulations that say big companies can pick up a major reduction in electric energy. Homeowners and small businesses get almost nothing in terms of a reduction. That energy rate is going to drive them out. That energy rate is going to keep them from expanding in New York.

A better approach is probably across-the-board.

Q: How much blame do high taxes, including those from the 1980s, deserve for the problems?

Silver: I think taxes played a role, but certainly not an exclusive role. One of the other factors is that electric power is so much higher than the national average. That's probably the Number One issue, and it's not being addressed.

Q: Will the STAR program get property taxes back in line?

Silver: The imposition on localities of burdens creates that local property tax. The proposed cutback in education aid puts a burden on local government. The Medicaid takeover proposal, which the leaders of this house of the Legislature proposed to relieve the local tax burden, was not adopted. It's not enough to do a property tax relief which doesn't affect the local business tax when you're shifting the burden to local government.

Q: If you look at projections that private economists make about growth in the coming years, they predict that New York State is going to lag. Is that right, and what can be done about it?

Silver: I think (if) we would change the nature of our economic development, we can impact that positively. We should recognize that, by and large, New York is not going to be the sneaker manufacturing capital of the world and look at the industries in the economy that are likely to grow and target it to our state universities and colleges and harness those energies for job creation.

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