Downstate interests drive upstate costs

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Turbocharged by the national Democrats’ lurch to the left, Rep. Alexandria Ocasio-Cortez’s overnight stardom and a generalized Trump-inspired panic, the downstate owners of New York’s legislature have exceeded my dismal expectations in their first session in power.

Liberal democracy is a fragile thing—we forget that the framers of the U.S. Constitution took pains to guard against the tyranny of the majority. That’s why Congress is a bicameral legislature with different houses built on different models of representation. Defenders of pure majority rule cry “Abolish the U.S. Senate.” They forget that the Senate is designed to distribute power by geography instead of by raw vote totals, balancing the more-populist House of Representatives. This does not always lead to outcomes we like—but it contributes to long-run stability in a diverse society.

That sectional interests deserve protection is vividly demonstrated in the recently-completed New York legislative session. As I noted before the 2018 election, “where you stand depends on where you sit” has particular application to the state Legislature. After that election there were exactly three members of the majority party in the Senate representing upstate districts. If you’re new to New York politics, the majority party rules its chamber. Minority members need dentures to smile in public. 

The just-passed Climate Leadership and Community Protection Act neatly captures the mix of progressive posturing and downstate-centric policy that dominated the 2019 legislative session. 

New York has hardly been a laggard on environmental policy. Coal plants have been closed or “re-powered” to burn natural gas (including the generating plant in Eastman Business Park). Supplying 19 percent of the state’s electric power in 1990, coal’s contribution is 1 percent today with the remaining two plants set to close next year. Wind now contributes 3 percent of our electricity, a fivefold increase in generation in a decade. 

The climate bill is a triumph of ideology over practical policy and it further erodes upstate’s competitive advantage after years of lackluster economic growth. The bill sets hard targets for renewable energy, requiring the Public Service Commission to take whatever actions are required to move New York to 70 percent renewable power by 2030, from 28 percent in 2017. 2030 used to sound like it was far in the future. But think about this in reverse: Maybe I’m just getting old, but 2009 feels pretty recent to me. 

Not only does the law set implausible targets, but by mandating change through renewables, it is also unnecessarily prescriptive. Dramatic reductions in carbon emissions and unhealthy particulates have come from swapping natural gas for coal or fuel oil, yet the state continues to block gas pipeline construction, a particular problem for downstate counties confronting the 2021 closure of the 2,000-megawatt Indian Point nuclear plants. 

Moreover, despite the enormous expense of this dramatic shift in power generation, the cost will be invisible in the state budget. Whether reflected in dramatically higher energy prices or subsidies through the New York State Energy Research and Development Authority, ratepayers will bear the burden. Although consumer prices play an important role in encouraging better energy use, this approach also conveniently lets lawmakers escape the responsibility for paying for this more-ambitious new mandate.

The climate bill will differentially disadvantage upstate as our industries are far more dependent on energy than the finance sector powering New York City. As a share of total output, the state’s finance sector purchases only a fraction of the power required to run a manufacturing plant.

The Housing Stability and Tenant Protection Act brings the specter of rent control to upstate cities, too. Economists consider rent control counterproductive where housing scarcity is driving up rents. It is even more damaging where supply isn’t the problem. Drive around Rochester’s Crescent or troubled neighborhoods in Buffalo or Syracuse—the scale of abandonment and poor maintenance is significant. Artificially lowering rents will accelerate this process and simply add to the city’s list of dwellings waiting for demolition. There are better ways to help the city’s renters.

The Empire Center’s Bill Hammond summarized a raft of new laws governing the state’s health care system, including mandated coverage for three cycles of in-vitro fertilization and a range of other services. Worthy mandates? Sure. But when New York’s health care costs are among the highest in the nation, we may not wish to pay for them. 

This is the tale of two states: New York City’s economy is driven by “high value-added” firms with substantial profit margins. Its competitors are Hong Kong, London, Singapore, Toyko and San Francisco. 

Upstate competes with the rest of the world. Let’s not impose downstate costs on upstate margins. 

6 thoughts on “Downstate interests drive upstate costs

  1. GREAT article. The green energy initiative is both fool-hearty and economically disastrous to NYS. If you want clean air, clean water, etc. then do the best we can to actually accomplish this. Obviously, Nat Gas would be a quick, easy, affordable step in that direction…but nooooo, THAT would be “fossil fuel” so it’s automatically bad.

    The “no nat gas pipeline” stupidity tops all. Environmentally risky? uh… guess what folks, 80% of NYS ALREADY HAS nat gas pipeline under our streets, across our waterways, right up to and INTO your home! Oh, and we have a huge reserve of it in Southern NY deep under our feet, just can’t use it.

    We need more scientists and engineers running this state and fewer attorneys and donors. Sorry to you good attorneys out there, but lots of politicians are attorneys and not so good with math and science…. We need many more science and math based decisions, made by good people with smarts and empathy.

  2. Kent, where to begin. Is there a cry to “abolish the senate”? I haven’t heard that. There are lots of cries to abolish the Electoral College, but not the senate. And which senate? Is NYS Senate “designed to distribute power by geography”? If yes, how to explain that one of the largest upstate cities (Rochester) has been gerrymandered so that for decades its residents have had NYS Senate representation only responding to the needs of its suburban and rural neighbors? Many of us have fought for years for the very legislation that you bemoan, and finally feel that NYS government is representing our interests, despite our unresponsive senate representatives. We are not a small number of upstaters, as evidenced by our good number of Democratic Assembly reps from upstate urban areas.

    I do agree that our legislative bodies have become too much “winner-take-all”, but that is not a malady restricted to the NYS Senate. How to break out of our current polarization is a topic too big to tackle along with all your other points here.

    As for the Climate Leadership and Community Protection Act, if it is “a triumph of ideology over practical policy”, then physics is now ideological, because physics is telling us that we need to act radically now. Why are we in this bind? Because upstate Republicans have squandered the time we had to incrementally deal with this problem. AOC and her constituents represent younger New Yorkers (across the entire state), who are staring down a very bleak future unless radical steps are taken. The legislation is in fact insufficient to adequately deal with the emergency we are facing, and the fact that it is dubbed radical indicates how far our society has blinded itself from the workings of its own life support system. If eliminating fossil fuels from our diet dooms our economic system, then it is our economic system that needs an overhaul. Physics doesn’t care one whit whether we survive much less thrive; we must conform to its rules, not the other way around.

    If rent control is not helpful in upstate cities, then what are the policies to help our poor get and remain housed in the presence of an increasing gap between wages and housing costs? More luxury apartment developments? I heard you (on Connections) espouse a trickle-down theory of rent stabilization. Really? Trickle-down? Have we still not shed that piece of ideological garbage? Even if more luxury supply causes rents to drop in our aging housing stock (a big “if), doesn’t that only produce lots more blighted properties, since it already costs too much to adequately maintain all these high-maintenance aged properties? To me, the issue with housing in Rochester is not its high costs, but the low wages we earn here (plus the aforementioned issue with expensive aging housing stock). What have our local Republican Senate reps been doing to help raise wages in their urban districts? They have certainly voted consistently against minimum wage increases. Since they don’t really need to respond to their urban constituents (who don’t vote for them even though trapped in their districts), then these senators haven’t really had to do much of anything to benefit them, have they?

    You selected an interesting graphic regarding health care costs. It appears that it depicts insurance costs. Does it depict out of pocket costs? How about acute emergency care for the indigent in those states with low-cost “coverage” — care which is exceedingly expensive and driven by lack of health insurance coverage options for poor people in many of these states? Also, how about health care outcomes? Don’t we have better outcomes than states like MO and AL, and better health outcomes are themselves money-saving, but not reflected in stats of pure health coverage costs. (I’m sure we could obtain better outcomes for less, but comparisons with places that produce such poor outcomes is not helpful.) Just as with climate physics, if we have a system in which massive numbers of people need to be denied adequate health care to make the cost numbers look good, then perhaps it’s that system that needs revamping. I would be appalled if we tried to mimic the immoral systems currently available in those states.

    Kent, it strikes me that you are a bit too enamored of your data and not enough interested in validating whether you are measuring the right things. It would be great to see you take this opportunity (New York State’s now Democratic-leaning senate) to re-examine long-held assumptions and habits. If Paul Krugman could do it, surely you can too! The stakes are as high as they’ve ever been for humanity.

  3. You make a number of valid points, “Contrary Mary,” and I appreciate your comment. I’m not going to provide a detailed refutation to each, although I would push back on two–rent control and your characterization of my position on the climate law.

    As you listened to the discussion on Connections, you should know that I support a number of the tenant protections in the law. We seem to agree that Rochester’s housing problem is one of low incomes, not scarce housing. Rent control helps not one bit with that problem and, for the reasons well described in the good research that’s been done, would exacerbate the problem for those most in need.

    As for the climate law, my problem is with the means, not the end, and the likely consequences of driving energy prices up significantly for Upstate. These costs are highly predictable and occur near in time.

  4. I am enjoying these discussions and unpacking of important issues. I struggle with the upstate vs. Downstate framework. Even my auto spell capitalized downstate and left upstate in lower case. The upstate Downstate devide is not one I want to buy into. The different parts of upstate, Monroe County, the City Rochester and the five boroughs that make up New York City could easily fall along a continuum not easily categorized as upstate or downstate. There are challenges, concerns and aspects of governing and representing a global city such as New York that simply do not line up with or that be can be fairly compared to the vast and complex interest of the rest of the state. If the issue is balanced representation within the NYS Senate, then I say let’s get on with the business of electing people that will help bring broader state representation to the Senate.

  5. In reply to Kent’s reply, first, thank-you for reading and considering my views. Regarding the climate law, it is good to recognize that there are thousands of upstate NY citizens who have fought for years (a good decade-and-a-half or more) for actually significant climate change action. We have marched and written letters and met with our legislators and tried to educate the public and begged and pleaded in every way we could for action at the federal, state, and local levels. The moneyed interests (plus NYS’s home rule) have blocked us at most every turn as we have watched our children’s future become more and more dismal. Climate science says we have about twelve years (or is it now eleven) to radically reduce our carbon emissions. If 2030 seems close to you, how about 2031? I get your point about the legislation perhaps harming upstate more than downstate, but the answer is NOT to try to shoot down this most significant (albeit inadequate) legislation. Let’s celebrate it for BEING radical, and try to modify it to better share the pain. And do not delude yourself into thinking that pain is avoidable at this late date. Also, keep in mind that the legislation is VERY unlikely to actually be implemented as passed. Sadly, home rule + money will likely prevent it from making much of a dent in the mountain of work we have ahead of us. That is, we will be blocked until we are absolutely desperate, at which point it won’t much matter what we do. For now, I’m taking a few moments to be proud that my state is taking a lead and signaling how important this issue is.

  6. Kent, you seem to think increased use of natural gas somehow helps reduce greenhouse gas emissions. Your logic escapes me. You state correctly that coal is now providing essentially none of NY’s electric power. New natural gas infrastructure won’t be replacing coal — instead it will be increasing net GHG emissions by displacing nuclear power or renewables. But the fundamental point is that we simply can’t afford to continue using fossil fuels when every ton of CO2 added to the atmosphere will be heating up the climate for centuries. More gradual steps would have been possible if we had started in 1989, but decades of industry disinformation and GOP demagoguery precluded that.

    Further, your hyperventilating about increased energy costs neglects the fact that renewable energy, solar or wind, is now cost-competitive with fossil fuels and still getting cheaper. (see https://www.forbes.com/sites/dominicdudley/2019/05/29/renewable-energy-costs-tumble/#69e0ed1fe8ce) Upstate residents tend to pay about 11c/kWh for electric power (below the national average, btw). I chose to go with an ESCO option providing exclusively renewable-sourced power, so I’m paying an outrageous 8c/kWh instead. A lot remains to be seen about precisely how NY’s build-out of renewable energy is going to be accomplished, but the fears you express about excessive costs seem unreasonable.

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