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Upstate is a stagnant economic morass kept afloat, barely, thanks to the thriving New York City financial sector, say downstaters.

New York City is a funnel sucking upstate tax dollars into an overly generous social welfare system, reply upstaters.

Who's right? Upstate vs. downstate New York is the mother of all divides, a bitter, long-running feud that rivals the Montagues and the Capulets, the Hatfields and the McCoys, Bill Clinton and Ken Starr.

Though rooted in geography and culture, the divide runs deepest in Albany policy debates.

SUNY vs. CUNY, highways vs. subways, prisons vs. crime prevention: Everything with a dollar sign in front of it has the upstate-downstate divide behind it.

"I think regionalism is the hidden fault line in New York State politics, and I think it's been that way throughout the century," said Bruce Gyory, an Albany lobbyist and formerly an aide to Gov. Hugh Carey.

Earlier this century, the upstate-downstate divide was more clear: largely rural, Republican upstate New York vs. the Tammany Hall-dominated urban giant that straddles the intersection of the Hudson River and the Atlantic Ocean.

New York City politicians and residents struggled under the yoke of the GOP-dominated State Legislature, which passed laws ensuring that the populations of Manhattan, Brooklyn and -- after consolidation in 1898 -- Greater New York City wouldn't be fairly represented in the State Senate and Assembly.

George Washington Plunkitt, a turn-of-the-century Tammany Hall district leader known for his philosophies on "honest graft" and other political matters, thought upstate Republicans had rigged a state government that took advantage of New York City.

"In this state the Republican government makes no pretense at all," he said. "It says right out in the open: 'New York City is a nice, big, fat goose. Come along with your carvin' knives and have a slice.' They don't pretend to ask the goose's consent."

But the automobile, Levittown, the interstate highway system and the post-World War II baby boom all coalesced to form a new socio-political force, the suburbs.

Three distinct regions

While New York State is often simply divided into "upstate" and "downstate," it is really composed of three distinct regions:

One, the five boroughs of New York City, with 7.3 million people.

Two, the affluent downstate suburbs surrounding New York City: Nassau and Suffolk counties on Long Island, plus Westchester, Rockland and Putnam counties in the lower Hudson Valley, 3.7 million people.

Three, everything else (i.e., upstate), 7 million people.

Upstate residents want lower property taxes, more spending on highways and price supports for milk. In general, they are in favor of the death penalty and building more prisons. On the other hand, New York City residents want rent-controlled apartments, mass-transit funding, lower milk prices and generally favor prevention programs over tough-on-crime initiatives.

And downstate suburbanites tend to support ideological conservatives in upstate, but because of business ties, support New York City on transportation and economic issues.

"I'm a conservative Republican, and I have to go into a room and meet with a liberal Democrat (Speaker Sheldon Silver of Manhattan) and try to come up with something that works for all of New York, including my rural district that has six counties, 47 towns and 21 villages," said Assemblyman Thomas M. Reynolds, R-Springville, who was leader of the Assembly Republicans before resigning the position to run for Congress.

With billions of tax dollars at stake, policy-makers often attempt to paint the other regions of the state as a drain on the taxpayers -- and voters -- in their districts.

"Once you have identities built around geography, all politicians get sucked into this game of whether their region gets a fair amount of money," said Jeffrey Stonecash, a political scientist at Syracuse University.

At least one upstate politician doesn't go along with the New York City-bashing.

"I don't buy it," said Mayor Masiello, who navigated the upstate-downstate divide as a state senator. Noting Gotham's position as the world's financial capital and a prime tourism destination, he said, "Instead of looking at New York City as this monster draining money away from upstate, people should realize that it does bring a number of benefits to the entire state."

Slicing up the pie

Over the years, a handful of think tanks -- but few government agencies -- have gingerly addressed the dual issues of: a) How much money does each region of the state send to Albany and (more importantly) b) How big a slice of the pie is sent back?

One of the most comprehensive studies was done in 1991 by the Center for Governmental Research, a Rochester-based organization that analyzed the fiscal year 1990-91 state budget.

The report, a draft that was never officially released, found that upstate counties overall receive far more from state government than they contribute, while New York City just about breaks even. The largess enjoyed by upstate -- particularly rural upstate -- comes out of the pockets of residents of the downstate suburbs, according to the study.

Kent Gardner, director of economic analysis at the center, said that an updated report covering the fiscal years from 1992 to 1996, which should be released sometime this autumn, reaches the same general conclusions as the 1991 report.

For every dollar in state taxes paid by upstate counties, they receive $1.08 back in state aid, the report says. New York City receives $1.26 for every tax dollar it contributes. Long Island's two counties receive 60 cents, and Westchester, Rockland and Putnam counties receive 52 cents.

But New York City pays more of the costs of government administration that, upstate, are borne by the state, noted Gardner, such as bureaucrats' salaries and the office space that houses the regional branches of state agencies. When the money municipalities receive for these state operations is factored in, upstate ends up receiving $1.41 for every dollar contributed in taxes, while New York City ends up breaking roughly even.

"There's a myth, perpetuated by upstate newspapers, that New York City is draining money out of the state treasury," said Assemblyman Edward C. Sullivan, D-Manhattan, a charge he said doesn't add up. "We contribute more than our fair share of income to the state," he said.

Overall, New York City and its suburbs have a negative balance of state payments (taxes paid minus funds received) of nearly $3.3 billion, while all of upstate has a positive balance of $3.4 billion, according to the report.

With New York City essentially breaking even, it's the five downstate suburban counties that bear much of the burden of state government -- funding state university campuses, salaries for state prison employees and Albany's contribution to local school districts.

The center found that 40 to 50 percent of taxes paid by residents of Nassau, Suffolk, Westchester, Rockland and Putnam counties -- among the state's wealthiest counties -- are spent in other parts of the state.

"What our study shows is that people who are wealthy bear a disproportionate burden," said Gardner.

"It's called pocket-picking," countered Sheldon Sackstein, a Long Island certified public accountant and member of Action Long Island, a business advocacy group. "They pick our pockets and send it to Albany."

Sackstein bristled at the notion that Long Island, as one of the wealthiest parts of the state, has an obligation to share its wealth. "Don't come to us, New York State, and say (Long Island has) so much wealth," said Sackstein. "Let me help take care of my
own, first."

But some hold that the debate over regional equity in state spending is an argument that misses the point.

"There's traditionally been debates about getting a 'fair share,' which is the wrong debate to be having," said Andrew Rein, a senior researcher at the Citizens Budget Commission, a Manhattan-based watchdog of city and state government. "Upstaters think they're sending all their tax dollars to New York City, and the city thinks they're not getting their fair share."

There is a societal burden, he said, to provide financial support to those who need it, and in this state more of the people who need social services live in New York City.

Rein argues, "If you should get only as much money as you send, you don't need to have a state government."

Looking out for WNY

One of the chief factors that affects a region's share of the budget pie is its ability to coordinate efforts to obtain state funding. Representatives of Buffalo and its suburbs are known for their effectiveness during the closing days of legislative sessions, when large amounts of discretionary spending are at stake.

"It's called clout," Gardner said, adding "the Buffalo delegation is able to bring home the bacon."

It warms the hearts of even the most cynical political observers to see Buffalo Democrats and suburban Republicans setting partisan animosity aside in order to win funding for the Buffalo Philharmonic Orchestra, improvements to the Stadium Formerly Known As Rich and other local projects.

"In order to be a force, we absolutely need to act together," said State Sen. Dale M. Volker, R-Depew, a senior Western New York senator.

The study by the Center for Governmental Research shows that this legislative bonhomie has paid off: the Buffalo-Niagara Falls area received 21.5 percent more in state expenditures than it paid in taxes in 1990-91, for a positive balance of over $300 million.

Other large upstate cities didn't fare as well. The Syracuse area received only 5.2 percent more than it paid out ($48 million), while the Rochester area received 9.9 percent less than it sent to Albany (a net loss of $140 million).

Removing the Buffalo, Albany, Rochester and Syracuse metropolitan areas from the mix, the rest of upstate receives 48.9 percent more in state payments than it pays in taxes, for a whopping positive balance of $1.7 billion.

But, not surprisingly, many people still insist that New York City -- which has the bulk of the state's Medicaid and welfare recipients -- is a burden on the state.

"If you look at it from a (social) services point of view, most of the need is centered there, but most of the cost is borne by upstate," said State Sen. Joseph L. Bruno, R-Brunswick, the majority leader. He said that 75 percent of funding for social services goes to New York City, but the city's taxpayers only pay 40 percent of the cost.

"I've seen the numbers, (which claim) that New York City is not a drain. I don't believe it," said Volker. He added, "You really have to watch yourself when you say upstate gets a good deal."

Aid locked up

If you ask Assemblyman Daniel L. Feldman, D-Brooklyn, why so much money flows to upstate districts, he answers with one word: prisons.

"The juiciest piece of political pork in the State Senate, which is run by upstate Republicans, is the prisons," said Feldman, who is chairman of the Assembly Committee on Correction.

In an article he wrote for Public Administration Review, Feldman reported that largely rural State Senate districts represented by Republicans in 1992 accounted for 89 percent of all state prison employees, held over 89 percent of all state inmates and received over 89 percent of all money spent by the state Department of Correctional Services.

Put another way, 81 percent of state prison employees worked in Assembly districts represented by Republicans, and those districts received 81 percent of state corrections funds.

There is little room, and less desire on the part of residents, to build prisons in the densely packed neighborhoods in New York City. Upstate communities, however, clamor for the influx of jobs and state aid the construction of a new prison signals.

Recently, state correctional facilities have been built in Alden (1992), Sonyea in Livingston County (1991), Napanoch in Ulster County (1990), Gouveneur in St. Lawrence County (1990) and Brocton in Chautauqua County (1989).

"What you get is a picture of most inmates being sent from compact, urban neighborhoods to upstate, rural prisons," Feldman said in an interview, "along with $30,000 worth of taxpayers' money per inmate."

One state, indivisible

Many of those who pander to the resentments of one region's residents toward another part of the state don't harbor serious hopes that they'll change anything.

Take State Sen. John R. Kuhl, R-Hammondsport, who this spring, just as he has every year for nearly a decade, introduced a bill that would split the state in two along the border between Westchester and Rockland counties.

And this year, just like every other year that Kuhl has introduced the bill, it languishes in committee without a prayer of making it to the floor for a vote by the full Senate.

Critics may view Kuhl, who represents a large swath of the Finger Lakes, as a modern-day Don Quixote -- tilting at the windmill of New York City to appease constituents who consider it to be a fearsome dragon. But Kuhl said his bill reflects legitimate concerns of voters in his district.

"That's what my constituency thinks is best for the future," he said. "They see two very different societies." He added, "Some of them say, 'Why don't you just cut the City of New York off and let it drift out to sea?' "

Neile Weissman, a Manhattan computer salesman and tenant activist, disputes Kuhl's belief that New York City is a drain on the state but agrees with splitting the state in two.

"I don't see why it's one state," he said. "If the question is whether it should be one state or two, I don't know anybody who could offer a reason for it being one state."

But New Yorkers will probably have to remain uneasy partners in this marriage of inconvenience.

The last time residents of one section of a state voted to split off and form their own state -- and Congress gave its blessing to the divorce -- came when supporters of the Union broke away from Confederate Virginia and established West Virginia.

That was in 1863.