Tuesday, September 27, 2016

Lackluster Performance . . . and Expectations.

Per the headline in the Sentinel: County’s household income trails state, national averages, Census Bureau figures show.
The household median income in the county — with a population of 232,500 — was $48,023, according to the 2015 American Community Survey. The statewide average was $60,850 while it the national figure was $55,775.
Clearly OC's income is lackluster compared with the rest of the state and country. But won't the State and County's "chip" related "investments" completely transform the regional economy?

The article tells us that Saratoga County's median income is over $75K, that Saratoga County is the center of Capital Region chip manufacturing, that local officials look forward to the impact of our chip fab, and that the average pay of all fab employees will be about $60K. The article suggests the chips will turn things around, but . . .


Assuming for the sake of argument that chip manufacturing will bring in 5,000 new jobs (instead of the 750-1000 seen in various prior press reports) that pay the $60,000 noted above, add same to the current labor force of about 132,000 for Utica-Rome (from the Bureau of Labor Statistics) with the current average  pay for OC households of $48,023, the average pay for the region will ZOOM from $48,023 to . . . . $48,460! OR ABOUT a 0.8% increase.

In other words, 5,000 new $60K chip-fab jobs will hardly be a ripple in the local labor pond.  And that is assuming there will be takers for those jobs.


Based on the article, OC incomes are 14% below the national averages. But the cost of living in Utica-Rome is about 21% higher than the national average, with childcare, taxes and healthcare being the main culprits.  With these extra costs, why would people come here? Government subsidized childcare and healthcare (a temptation of politicians) would be no answer because they would only make the level of taxation all the more onerous.

Simply put, our local economy has passed the point of being able to sustain itself while people and businesses are free to go elsewhere.  Expensive "economic development" projects paid for by taxpayers only exacerbate the situation.

It is time to shrink the role of government in our regional economy.  Only then may we free up enough private capital to make it worthwhile for individuals to invest in the local economy.

Monday, September 26, 2016

Why So Fast?

The ink was barely dry on the charges against Alain Kaloyeros when, within 24 hours, Senator Griffo and Assemblyman Brindisi called upon SUNY Chancellor Nancy Zimpher to fire him as president and CEO of SUNY Poly.
“It is extremely important that the primary mission of the SUNY Polytechnic Institute—the education of students—continue unimpeded."
Thank goodness they care about the institution's mission! What a change from two years ago when they precipitously ignored any concern over the Utica campus' identity, tradition, and mission to cheer the merger of SUNYIT with the glamorous (but niche oriented) College of Nanoscale Science and Engineering. Control of a Utica-centered institution was transferred to one more focused on Albany. Mr. Griffo and Mr. Brindisi need to own that... and perhaps they do, since they are now calling for the new president to be stationed at the Utica campus.

However, calling for Kaloyeros' ouster seems equally precipitous now.

It is understandable to want to remove the cloud that now hangs over the Utica campus. However, CNSE and SUNY Poly would not have existed but for Kaloyeros. There had not been this much excitement in the SUNY system since the 1960s when tons of money were spent on buildings and talent to make Stony Brook the "Cal Tech of the East." Kaloyeros brought that same kind of excitement to Albany, and made a piece of U. Albany so distinctive and important that it could stand on its own.

Let's not be too quick to throw the baby out with the bathwater. Courses and personnel are already in place at SUNY Poly, so the inertia is there to carry the institution forward on its current trajectory for awhile.  Kaloyeros is innocent until proven guilty, and he is fighting the charges. The fact that AG Schneiderman is also going after him suggests that the State charges may be politics.  Kaloyeros is neither a politician, developer, nor a "hanger-on" like the rest of the defendants seem to be, but he undoubtedly knows where all the bodies are buried. My suspicion is that he got sucked into whatever the ones with the political power were doing, and they are now throwing him under the bus to take the fall.

The record of Ms. Zimpher and the rest of the SUNY system has been rather lackluster, with a focus that seems geared to "economic development" rather than academic achievement.  If Kaloyeros is permanently replaced, it will likely be just another college administrator like we've had over the years, only now it will be one responsible for two campuses.  Kaloyeros, however, is more than an administrator.  He is a brilliant scientist in his own right, as well as a visionary.  He will be hard to replace.

Let the justice system's processes play out for awhile before throwing Dr. Kaloyeros overboard.

Friday, September 23, 2016

Running Out of Shoes to Drop . . .

Well it has happened. Per the headline in the Times Union this morning: Kaloyeros to be arraigned Friday morning in Albany. Mr. Kaloyeros, head of SUNY Poly here in Utica, and others are accused of bid-rigging on various high profile state-sponsored economic development projects across upstate New York -- projects that are the centerpiece of the governor's economic development efforts.

Local officials have been quick to point out neither of the two large projects in the Utica area, the AMS chip fab and Quad-C, have been implicated in the wrong-doing, and that progress on same is still expected.

Don't bet on it.

First, there has been no visible progress at Quad-C for months.  As noted in this blog on July 28 (a) the six-member "consortium" that was expected to occupy the building seemed to have vanished, replaced by GE without explanation; and (b) work had stopped on the GE facility in Albany that was to make the chips designated for packaging at Quad-C.  Although covered in Albany media, local media has been largely silent.  Until officials "come clean" on what has happened with Quad-C, we can speculate that there was never a commitment from the "consortium's" members, and that the governor strong-armed GE to step into the breech, using the state's supervision of a very expensive GE clean-up project in the Hudson River as leverage. If that is indeed what happened, GE would be a reluctant player in Quad-C, and will pull out at the first opportunity.

Second, control over the AMS project is now being transferred from SUNY Poly to Empire State Development.  While some local officials claim that ESD is where the project should have been all along, they are ignoring the fact that it was SUNY-Poly -- and probably Kaloyeros' expertise -- that got the project out of federal wetland limbo by obtaining the permit that allowed construction to go forward.  It is unknown whether this savvy will be required again to keep construction on track, but if so, it was SUNY Poly and Kaloyeros that had it, not ESD.