Thank you very much. Thank you very much. It’s my pleasure to be in Owego. I’ll tell you, it is so beautiful. I don’t want you to take it for granted. It is like a Norman Rockwell picture. It really is beautiful. And then when that river is behaving, it is beautiful. When it is not behaving, it is a monster. And I know that all too well. But it really is beautiful and it’s beautiful to be here. Let’s give a big round of applause to Howard Zemsky, who’s doing a great, great, great job. Martha Sauerbrey, pleasure to be with her again. I was with her last week when we were working on the storm. And she is, you can really tell about a leader when times are tough. And she was fantastic and you should be proud of her. Thank you very much. I’m excited to be here.
We were in the State Fair yesterday as Howard mentioned. Howard is a little down low today. That’s because we were in the State Fair yesterday. He talked about the Nathan’s hot dog, Joey Chestnut, who I had never heard of Joey Chestnut, with all due respect to Joey Chestnut but there’s another competition that was at the State Fair, which is the wine slushy drinking competition. And Howard won the competition, 14 wine slushies in 14 minutes. He set a new all-time record and Howard won the competition. So let’s give him a round of applause. If you have not been, everybody’s been to the State Fair. I’ve been going to the State Fair for more years than I care to remember. This is a different State Fair. Don’t say oh, I’ve gone. I don’t have to go again. This is a different State Fair. This is the State Fair on steroids and that’s what Howard has been talking about. We have been investing in the State Fair because for me in many ways the State Fair was a metaphor for upstate New York. It didn’t change. I used to joke one year I left a Diet Coke can on a railing. Next year I came back the Diet Coke can was still on the railing. It didn’t change. It didn’t grow. Nobody invested in it. It just slowly deteriorated over the years. We have done a 180. And we’ve invested in the State Fair because it’s a great economic engine for the state. We put in a new infrastructure, a whole new infield, new rides. We just opened a new Expo Center, which is the largest exposition center in the northeast, anywhere between Boston and Cleveland. Yesterday we had an exhibition ice hockey game between the Junior Islanders and the Junior Sabres. But it’s going to be a great facility. And the whole Fair has a different feel, so you should really go.
We had a blast yesterday opening it up. Howard had just won the wine slushy contest, so he was a little wobbly and we were getting on a new ride called the Sky Ride, which takes you up and over the whole Fair. And, he mumbled something to me as we were getting on the ride. But, I couldn’t really understand what he was saying because it was after the slushy competition and there were a lot of people around, but apparently he said, “You know, I’m afraid of heights.” And I said, “get on the Sky Ride.” And we get on the Sky Ride, and Howard’s just a couple of cars away from me and we go up and we’re touring the Fair and occasionally you hear “Ahh! Ahh!” And that’s the head of Economic Development, screaming from the Sky Ride all around the Fair. But, it was a little embarrassing, but they didn’t know that I really knew him, at the Fair, so it turned out just fine for me.
But the State Fair and seeing the progress and seeing the growth and remembering all the years of stagnation, that really is the story of the Southern Tier, that’s the story of Upstate New York. Decades of slow economic decline. It was like a balloon with a pinhole in it. It wasn’t overnight, it was just a slow economic decline. Why? We were in the manufacturing economy in Upstate New York, that’s what we did, that’s what made us all along the Erie Canal. Great manufacturing companies. And then manufacturing left. Well what did we do wrong? We didn’t do anything wrong. It was a cycle of the economy and at first they went overseas, and then they went down south and then they got smaller because everything is automated now and they use fewer people. But upstate New York has been suffering this economic decline. And you feel it, you see it. I can’t tell you the heartbreaking stories of people who said to me, “I told my children they should move away.” I said, “why would you say that?” Right? The one thing you want as a parent; you want your kids around. But they have to move for jobs and for opportunities. And that’s what I told them. That was the way of Upstate, not for 5 years, 10 years, since the 60’s, the 50’s.
I was in Buffalo once, where Howard’s from. Somebody said to me, “Well, you know, when it comes to the economy, we’ve had a bad 50 years.” And I laughed. And he said, “No I’m not kidding, it’s been 50 years.” And that’s true. That was a function of the economy and then it was a function of what we did in response. Or what we didn’t do in response. Because a lot of areas of the country went through an economic transformation. But they did something, and we didn’t in New York, we’re guilty of the sin of omission. Why? Upstate, Albany government, the legislature is predominantly from New York City. And their focus is New York City. You’re a legislator, what are you concerned about? You’re concerned about your district. And the overwhelming majority of the legislature is from New York City. So the focus was in New York City. By the way, Democrats and Republicans. Democrats, certainly predominately from New York City. Republicans, many years the power base was Long Island. So all the focus was downstate. And New York City did very well, and NYC is the economic engine, and that’s great, but we allowed Upstate New York to continue to deteriorate. We made it worse. Why? Because we kept spending too much money in the state and we kept raising taxes.
So now you have a double whammy, you have loss of an economic base and you have a state that keeps increasing taxes, which is a way of chasing people out of the state. Well why were taxes going up? Because you were spending too much money. Sometimes you have to tell the truth, and you have to be honest and you have to look in the mirror. You’ll never solve a problem you’re unwilling to admit. Why am I putting on weight? I am eating too much, that is what is happening, that is the equation. Too many calories go in, the weight goes up. State government, you spend too much money and you have to raise taxes. And we spent money in this state.
We had a great Senator, God rest his soul, Tom Libous, who was a friend of mine. And he was a reasonable, practical, get-it-done, he was not a partisan crazy right. Today, on both sides of the aisle we just have partisan crazies, they just want to fight with the other side, because that’s the way they know they’re alive, by fighting. But Libous was a practical man who wanted to get things done. I used to tease him all the time, I used to say, ‘Tom, you Republicans spend too much money.’ He said, ‘What do you mean? Not us. We don’t spend money. Democrats spend money.’ I said, ‘No, it’s the Republicans that spend too much money.’ And his head was [inaudible] to explode.
How did New York State get into this situation? Governor Nelson Rockefeller, do you know how much he spent every year? What was the annual increase of Nelson Rockefeller – Governor for 16 years? Eleven percent more every year. Eleven percent! What was going up at eleven percent every year? Not income, not home value, nothing! Sixteen years we went up at eleven percent. After Governor Nelson Rockefeller who comes in? Governor Hugh Carey. Seven percent more every year for 12 years. Ok? Nothing was going up seven percent! Who’s after governor Carey? Governor Cuomo. God rest his soul. Six percent more every year. After Governor Cuomo who do we have? Republican Conservative George Pataki. How much does Republican Conservative Governor George Pataki spend every year? Five percent. He’s Governor for 12 years. For that entire period of time, we were spending more money than our people were making. We’re spending more money than our people are making. How can you do that? How can you spend more than you make? You raise taxes, and more. And that’s why when the tax payers of New York felt abused and the businesses felt abused, you know why? Because they were! Every year you were going back to them for more money, more money, more money.
I come in and I say, ‘We continue this way, it is death for us. It is death.’ And an old buddy who was always overweight and smoker, drinker, he was on a diet, he was on a grapefruit diet, he was on the Paleo diet, he was one of those guys who tried everything. He has a heart attack, he goes to the doctor, the doctor says if you don’t lose 50 pounds, stop smoking, stop drinking, you’re a dead man. Don’t bother coming back. Well he found religion like that. He lost weight, he’s running marathons. So I went to the legislature and I said, ‘We’re a dead man if we don’t stop. I don’t care if you’re a Democrat, I don’t care if you’re a Republican, I don’t care what you are. We can’t keep spending money the way we’ve been spending money.’ And the legislature likes to spend money. Everybody likes to spend money. And there’s all sorts of good things to spend money on. And they spent it. I said, ‘It has to stop.’ I said, ‘We’re going to have a discipline of a spending cap. Two percent, no more than two percent.’ Why? Because that’s basically the rate of inflation. And we’re going to change this basic trajectory – eleven, seven, six, five, has to go to two.
Now this was a shock to the body system, because you’re accustomed to spending that much, now we’re going to go to two. Seven years we have been under two percent every year. Seven years. Democrats are mad at me for not spending more, Republicans are mad at me for not spending more. Taxpayers of New York are appreciative. Why? Because when you spend less, then you can tax less. And we reduced taxes all across the board. Everybody in the State of New York pays a lower tax rate than they did seven years ago. Everybody. Middle Class up to $300,000, lowest tax rate since 1948. Corporate tax rate lowest rate since 1968. Manufacturing lowest rate since 1917. So, now businesses get this is a different day. And that’s why you start to see a change in the attitude. Maybe New York is not anti-business. Maybe it’s not the high business state.
And together with that, Howard Zemsky we learned the second lesson, which is in this market today you have to invest in businesses if you expct them to come to the State of New York. Why? Because every state is competing with you every day. You know the analogy he gave you about business, “you have to work every day because people are trying to take your business”? As a state, people are trying to take our business every day. I guarantee you Lockheed Martin gets two phone calls a week, state’s saying, “come here. I’ll give you a tax incentive package, you won’t pay taxes for the first ten years. Your child will go to college for free. Your wife will get–” Whatever it takes, all day long they’re courting their solicitors. So, you have to invest in the retooling.
And Upstate New York, part of the 180 was we’re not just reducing taxes, we’re going to invest. We have invested more in the Upstate New York economy than any administration in the history of the State of New York, over $36 billion in Upstate New York. And I am proud of it, because I have no problem saying to the people of Downstate New York it was short-sighted all those years–that you shorted Upstate New York. Because at the end of the day, we are one state, we are one family, we are one community, we are one set of folks, and if you want to help the state, invest in Upstate New York so they’re doing better, they’re generating more revenue and that will help the entire state. And $36 billion, what did we do with it? We invested in businesses and we are bringing more businesses into this state than we have seen in decades. New airports all across the state, LaGuardia, JFK downstate, new airport in Rochester, new airport in Syracuse, new airport in Elmira, new airport in Plattsburgh, new airport in Albany. $27 billion for new roads, new bridges all across Upstate New York, because Upstate New York is now becoming a global economy. And if you want to be a global economy, the transportation begets the jobs and the growth and that’s what we’re doing.
So, it’s all working. And for the cynics who say, “oh, well I don’t think it’s working, it’s still not what it should be.” It’s still not what it should be. We’re building back from 50 years of decline. But when we started the unemployment rate was 8.2 percent in Tioga County. Unemployment rate 4.5 percent today. You cannot argue with that. You cannot argue with that. State taxes down, property tax cap two percent for the first time in history, unemployment down from 8 to 4; those are inarguable facts. Now, one of the other dimensions that makes the economic development picture fall, bring back jobs. How do you bring back the jobs? They want an educated workforce. They’re working with universities, and they want young people coming out of colleges and universities with the new ideas. They all said the same thing.
You are perfectly located. Cornell, Ithaca, Harvey, Binghamton, great universities, great ideas being generated, great young people. The businesses also say what Lockheed said to Howard. We want downtown areas that are revitalized. Why? Because millenials are attracted to downtown areas. And this is a different way of thinking for old people like me. I wanted a house, and a backyard, and a patio, and a two care garage, I wanted a three care garage, because I have a lot stuff. That’s not the millenials. They don’t want to get in the car and drive out to the suburbs for their home and barbecue in their backyard and cut the grass. That’s not their vision. They want to be in a downtown area. They don’t want to get in a car. They want to walk to the restaurant, they want to walk to the café, they want to walk to meet their friend, they want to walk to their work. They want that density, that intensity of a downtown area that the generation before fled. Right? We had generations that grew up in the downtown, what is the one thing they wanted to do? Get out of the downtown. You made money, move out to the suburbs. Get a house, get a quarter acre, get a half an acre, you have your lawn, your lawnmower, you have your privacy. You don’t have to deal with the tenants and all the noise. They flipped it.
By the way, it was smarter to flip it. Because then you’re not always building out, out, out, out. More infrastructure, more farmland being taken. It’s worse for the environment. It’s more expensive. This development pattern is actually smarter and we talked about it for a lot of years, you just couldn’t get people to do it because they said I don’t want to live in that downtown density. My grandfather, God rest his soul, he used to say I didn’t know what he was talking about as a young kid, “I have an unattached house.” And he said this for years. “Unattached house.” And I said to my father once, “what is grandpa talking about? Unattached house.” He said, “well he means there’s no homes attached on either side. It’s just a freestanding house.” I said, “all homes are freestanding homes. I never—” He said “No, no. For your grandfather, you started in an apartment building, and then you moved up to a semi-attached, where you shared a driveway. But then to have a freestanding unattached home, that was it. You made it. You made it.” We’re now going full circle. They want that downtown revitalization. And that is an art form in and of itself.
So we came up with a program that said we are going to incentivize and fund downtown revitalization efforts. The DRI program. Why? Because everything has to have an acronym in government. DRI. Downtown Revitalization Initiative. And this is where it gets tricky, because I defer to Howard because I’m a micromanager – no, no I listen to Howard. We said we’ll do a $100 million total funding allocation. 10 winners was the idea. 10 million each. Ok? So I can do that math. 10 winners, 10 million, $100 [million]. I said to Howard at the time, “how many applicants do you think you will have for the 10 spots.” He said no more than 20. And this was before the wine slushy competition. I said, “20? So then 1 out of every 2 applicants would win, 1 out of every 2 would lose. But then we could say we’re going to do it next year so everybody gets a second chance.” He said yes. I said, “are you sure there are no more than 20 applicants?” He said, “oh I’m sure, head of Economic Development, I’m a business man, I’m not like you government people, I know because government competes every day and I won the wine slushy contest.” I said, “okay, forget I asked.” No more than 20 applicants. Do you know how many applicants we had? One hundred and five applicants. So, I said to Harold, you better go back to drawing board because you’re a little bit off on your estimate of 20, not that I’d like to put salt in the wounds or remind a person of a really bad mistake.
So then, we said, you know what we’ll consider, we’ll have first place awards at 10, second place award winners will win 8, third place will win 6, fourth place will win 4. Fifth place will win dinner with Howard Zemsky, you don’t really want to win fifth place.
Now, the orientation of everybody is we have to win, we have to be first, and if we’re not first, then it doesn’t matter. That’s not true. That’s a hyper competitive instinct. To come in third, means you’re in the top third of all the applicants. Ok? That means you’re in the top third and you beat, there’s a bottom seventy. To come in second means, you’re in the top 20 percent. And yeah, 10 million is great. But second place, 8 million dollars, is a lot of money. Third place, 6 million dollars, is a lot of money. And not everybody can win first. One hundred and five applicants. And many of them have applied multiple times, right? You only applied once, I think. Many of them have applied, two, three, four times, and never won. So you have to put this all into the calculus. And every time you apply and lose you get a little better, because then the second time you’re a little better, third time you’re a little better. And we’re going to have this on an on-going basis. So it’s not that if you don’t win this year, that’s it, you’re out of luck. We’re going to do it again next year, and you come back with a stronger application, next year. Ok? So do you understand the context for this decision and where we are?
Ok, with that in mind, it’s my pleasure to inform you, that you have won first place, $10 million dollars. Congratulations.
