Buffalo: A Template for Wichita?

Can we in Wichita learn lessons from the decline of Buffalo, New York? Steven Malanga chronicles the fall of this city in a recent piece in the Wall Street Journal.

After describing the many forms of government subsidy poured into Buffalo, Malanga concludes: “These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government’s redevelopment funds as “a politically motivated system trying to please everybody.'” That sounds familiar to us in Wichita.

While Buffalo suffered from some problems that Wichita doesn’t have, there are many parallels. The lesson: We in Wichita need to worry about our ever-growing city government and its appetite for planning the economic development of Wichita.

How Stimulus Spending Ruined Buffalo

Four decades of subsidies and high taxes haven’t arrested the city’s decline, but here comes New York’s governor with another billion dollars.
By Steven Malanga

Why do cities like Buffalo decline, and what role should government play in promoting recovery?

In his State of the State Address this month, New York Gov. Andrew Cuomo announced $1 billion in incentives to attract new investment to the beleaguered city by Lake Erie. “We believe in Buffalo,” he said, “and we’ll put our money where our mouth is.” Too bad Mr. Cuomo ignores the factors that help keep areas like Buffalo inhospitable to new investment—namely steep tax rates and the high cost of government.

This is an old story for Buffalo. Ever since the city began losing its manufacturing base in the 1950s and gradually declined into one of America’s poorest cities (the poverty rate today is nearly 29%), the federal and state governments have poured hundreds of millions of dollars into subsidized redevelopment schemes that have yielded few tangible benefits.

Buffalo may be the paradigmatic example of why expensive government revitalization efforts often fail. Back in 2004, the Buffalo News estimated that the city had garnered more federal redevelopment aid per capita than any other city in the country, a total of more than half a billion dollars since the 1970s. Yet, the paper noted, the city had virtually nothing to show for the money.

Continue reading at the Wall Street Journal (subscription required)

1 Comment

  • Anonymous -

    And yet, New York City, which labors under many of the same horrendous state laws and fiscal decisions as Buffalo, was ranked 1st out of 366 metro areas in 2009-2010 growth by the U.S. Bureau of Economic Analysis this past September. Rochester, NY ranks 53rd. Albany ranks 56th. Syracuse ranks 77th.

    http://www.bea.gov/newsreleases/regional/gdp_metro/2011b/pdf/gdp_metro0211b.pdf

    Meanwhile, other areas in New York state rank poorly. And still other areas of New York are in the middle. Strange and non-definitive results for a state which is, Steven Malanga assures us, entirely “inhospitable to new investment”… “even while other governors have already signed laws lessening the fiscal burden on local governments.”

    P.S. Buffalo ranks 54th.

    Elkhart-Goshen, Indiana ranks as one of the fastest-growing metropolitan areas. Would stimulus spending have “ruined” their growth?

    http://www.msnbc.msn.com/id/32262387/ns/us_news-the_elkhart_project/t/stimulus-plan-projects-elkhart-county/#.TxSk9mDXEUM

    Too bad Mr. Malanga missed this extra data. The world can be awfully limited when your only view is through the turret of a conservative think tank.

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