As important as it is for M&T to begin to do business in high-growth areas, and as pleased as we are at having begun to do so, it would be just as significant for the company were our historic markets somehow to rouse themselves from their economic doldrums. It is unlikely that this will happen, however, until steps are taken to reduce the tax burden and attendant bureaucracy whose weight inhibits growth in payroll, income and population. The details of the burden are telling. As much as upstate New York trails the national average in positive indicators, such as those cited above, it leads in levels of taxation. Indeed, local government taxes as a percentage of personal income in upstate New York are fully 35% above the national average, a level higher than any state except New York as a whole (including downstate). In contrast, central Pennsylvania - a market in which the Allfirst acquisition has increased M&T's presence - stands 31% below the national average in the bite taken by local taxes. This is just one of the many reasons we are more hopeful about that region's economic prospects. New Yorkers, in contrast, are both paying high taxes and getting less than they should for their money. Consider two crucial areas of the state budget - spending on Medicaid health care assistance for the needy and on public education. Together, these two areas themselves account more than half of total New York State government expenditures. Medicaid spending in New York State alone - driven by generous benefits - is nearly equal to that of California and Texas - combined. The program’s costs are, in part, passed on to local governments, where the high levels of taxation noted above in turn inhibit job formation. New York State also spends 51% more than the national average on the per pupil cost of education but attains worse-than-average results (on average, a 1007 composite on the Scholastic Aptitude verbal and mathematics tests, compared to a national average of 1026). Among the other side effects of all this has been population flight, especially among the young – hardly a positive trend for industries such as ours. Over the period 1990-2003, the upstate population only barely held steady – growing at an annual average of just .1%. Even that small increase masked a far worse population problem – the decline in the number of young people. From 1990 to 2003, U.S. Census Bureau data show that the number of upstate New York residents aged 20-34 declined by 323,836 or 19%. This 1.6% annual decrease was eight times the .2% average yearly decline for the U.S. as a whole. Indeed, the upstate New York region alone accounted for fully one-fifth of the 1.6 million total fall of U.S. residents in the 20-34 age group during the period 1990-2003. In contrast, the new M&T markets – such as Maryland and metropolitan Washington, D.C. (including fast-growing northern Virginia) – gained population at an average annual rate of 1.3%. Overall, New York State ranked 44th among the 50 states in population growth.When one of the last major corporations based in WNY starts pointing this shit out to every one of its shareholders, one would hope that New York's leadership (not to mention WNY's) would pay attention and listen. But you know and I know that they won't. After all, Wilmers offered to pay the entire salary of the best schools superintendent for Buffalo schools that money could buy. And they nixed it.
What M&T has to say
You have to hand it to M&T. They're a big regional bank, and growing. They have made a commitment to stay in WNY, and to be a good corporate citizen. Via Kevin at the TalkArena.com, I find some strong words in M&T's 2004 Annual Report. (Link to the Annual Report).