The following is a report filed by Chris Lafakis at Moody's Financial Research institute. It's the latest analysis on the fiscal solvency of the City of Kingston and surrounding metro area.
RECENT PERFORMANCE
A handful of economic indicators suggest that the end of Kingston’s recession is near. Payrolls are expanding for the first time since 2006 thanks to a moderation in service job losses and hiring at the State University of New York at New Paltz. The unemployment rate has tenuously stabilized near 8%, and the local labor force is once again expanding. Moreover, the nascent rise in industrial production foreshadows that manufacturing employers might soon stop laying off workers.
SUNY NEW PALTZ
New York’s dire fiscal situation will have little impact on SUNY New Paltz. In April, the university proposed $6 million in deficit reductions, with nearly two-thirds of the amount coming from non-instructional areas such as increased revenue sources and cost savings. The only casualty of the recession will be the university’s nursing program, which will be phased out. While 70 university jobs will be lost, this represents less than 3% of the more than 3,000 employees.
SUNY New Paltz will remain an important growth driver for Kingston Metro Area in the long term. The university welcomed 1,775 new students this spring. An increased volume of applicants has allowed the university to be more selective and enhance the quality of its students. Further, thanks to the university, state government worker earnings, which are higher on average than the state and national averages, support consumer industries in the Kingston Metro Area.
HOUSING
While far from well-functioning, the local housing market is much improved. A 75% surge in housing affordability since the fourth quarter of 2005 has helped to stabilize housing demand. Home sales have bottomed, and house prices have been relatively stable after declining by 23% over two years. While residential construction remains depressed, it is not expected to gather momentum until the second half of next year. Recent improvement suggests that consumers are gaining confidence in the housing market. If this is the case, it would mark a significant shift in consumer psychology; consumers’ anticipation that home prices will continue to fall has been the main reason that home prices have been falling. A self-reinforcing improvement in consumer confidence could cause home prices to rise sooner than expected.
GROWTH IMPEDIMENTS
The Kingston Metro Area’s long-term economic potential is limited by several constraints Most notably, its above-average living costs en-courage emigration and discourage immigration. Housing is historically much less affordable in the Kingston Metro Area than it is nationally or in other upstate New York metro areas. High housing costs have limited immigration, thereby restraining population growth. Moreover, the metro area lacks dynamic growth drivers. While SUNY New Paltz provides a stream of educated workers, these workers are leaving the area because of the lack of job opportunities. This becomes self-reinforcing; employers choose not to locate in this area because they cannot find skilled employees, and skilled employees leave because they cannot find well-paying jobs.
FORECAST
However, Kingston is on track to emerge from recession by year’s end. The labor market will stabilize mid way through 2010, fueled by healthcare job creation. Kingston Metro Area is expected to recover all of the jobs lost during the recession by the first quarter of 2012, two quarters earlier than the nation. In the long term, the Catskills casino and resort project will bolster the local economy by creating jobs and spurring consumer spending. High exposure to a growing healthcare industry will also benefit the local economy. Nonetheless, the Kingston Metro Area will grow at a below-average pace over the forecast horizon be-cause of its flagging demographic trends.
TOP PRIVATE EMPLOYERS
State University of New York at New Paltz 1,000+
Benedictine Hospital 500-999
Eastern New York Correctional Facility 500-999
Kingston Hospital 500-999
Northeast Center for Special Care 500-999
Ulster-Greene ARC 500-999
United Cerebral Palsy of Ulster County 500-999
United Health Group 500-999
Ametek-Rotron 200-499
Fair-Rite Products 200-499
Bank of America: Information Solutions 200-499
Gateway Community Industries 200-499
Hannaford 200-499
Hudson Valley Resort & Spa 200-499
Mid-Hudson Family Health Institute 200-499
Mohonk Mountain House 200-499
Pilot Industries 200-499
Shawangunk Correctional Facility 200-499
Ten Broeck Commons 200-499
Ulster Correctional Facility 200-499
10 comments:
Excellent informative post. Thank you. NS
What area does this actually encompass? Far outside the borders of Kingston apparently. What defines the Kingston Metro area?
Is there more to this report? It seems to be lacking any income data which is usually included in these municipal fiscal reports.
1) If you look at the list of employers, it is virtually barren of private employers. Mostly funded with taxpayer money in one way or another. There is an inordinate amount of State and Federal Government dependencies on that list if you ask me. If we lose Hinchey and/or Cahill, you can bet a lot of it will dry up.
2) The young people are leaving because there is no work and employers won't come here becuase the young people are leaving. We are doomed to become an ever decreasing government service only economy, stuck exactly how we are now, only running out of people to pay the bills. Eventually the local economy will collapse upon itself.
3) The rest of the stuff is cookie cutter based on the macro economic conditions of the country. Housing starts, Mortgage rates, ect...
Your listing of private sector employers is incorrect. Much of what is on that list are public sector employers. The correctional facilities and colleges listed are all funded with hard earned taxpayer dollars. Many of the other organizations on your list have partial funding through government entities. We have too few private sector entities which provide sustainable wages in our area. Many of these few jobs created in our area are in the service sector which do not provide sustainable compensation. It takes private sector productive economic activity to support public sector payrolls.
The jobs lost when IBM left in 1994have never been replaced. Recently we have lost Imperial Schrade and Hydro Aluminum in the southwestern part of our county. I can tell you that it had a devastating impact on my town which is just north of Wawarsing (I'm the supervisor of the Town of Rochester). Those lost jobs had a mushroom effect and caused the closure of many businesses in our area. This further added to the tax burden of those who were left. This spiraling out of control economic train wreck has got to end.
I am currently working on a plan to bring green technology industry into our area. This challenge however is much too difficult and large to handle on a municipal level. We need to have municipalities, counties, and educational institutions work together so that we can create productive employment on a regional level. By providing incentives and an educated workforce we can competitively entice economic development in our area. It is a shame that we spend so much to educate our children and they then leave our area upon maturity for lack viable employment opportunies. We don't even get a thank you for our educational investment dollars from the communities they move to and become productive citizens of.
Mike as for your report on affordable housing, you are correct that prices have come down as much as 23% in Kington. Until taxes come down, all of Ulster County (and New York State for that matter) will continue to be unaffordable. High taxes add to the decline of home prices here. Homeowners and business owners are moving out of the area as they can no longer afford the price tag to live here and it takes a longer time to sell a property. (look at some commercial properites uptown that have been on the market for nearly 2 years)
So, although you are hopeful (so am I), we still have a way to go before this mess is over.
As a Realtor, I can tell you that we are still at a critical point and we are not out of the woods yet.
Carl,
I hope you are working with TSEC. If not, you should be. Otherwise, it is a duplication of efforts. You are talking about exactly what they are doing. Government, education and industry working together to bring in new green sector jobs.
Mike: an incredible post. Now time for the naysayers to back off. We still have a major distance to travel, but this is exactly what the Mayor discussed earlier in the year regarding our direction. I will discuss this on next weeks City & County and talk about the economy in general. Although we have weathered the storm, there is still inclement weather. Like the stock market, these indicators are sometimes early, but do usually predict the future.
Agreeing with our new Alderman for the First Ward, I too believe that we may still "be in the woods" but I am sure that she will agree in that we can now see outside the forest and I will say that the weather which may still be cloudy has sunshine in the future. We do have to attract new business, and the best way is to bring in tourist. As our County Executive appears to be movinmg forward, we too have to attract those that can spend money here in Kingston. If I can influence military units to have their reunions here in the City, I would suggest that the City Tourist Dept commence some type of campaign to affect that area.
Yes, Virginia, there is a Santa Claus,
take care.
Shelly Z
To 11:29AM
TSEC is very important and should be a major component. My greatest concern is for economic development while I feel TSEC sees that as secondary to alternative energy development. I feel government is not adequately represented in the equation. Tax incentives, necessary infrastructure (water, sewer, transportation), as well as a streamlined planning/zoning process are important components which I believe have not been properly looked into. A quick inspection of the board of TSEC shows a lack of government involvement. Most members appear to be academics and business representatives. I just believe that the solution should be with broader representation of stakeholders but TSEC is a start and one can't argue with the successes it has already achieved.
I've lived in kingston 35 years and you know what,i think it's time to go,how sad is that,this city just ain't affordable anymore.think about it,we are laying off people that produce,by that i mean the trash collectors,laborers etc.but we have economic development people that don't produce,and we keep them,westbrook lane was paved when we took it over,i can't remember when my street was paved,or spot patched for that matter,we have a wonderful new lot uptown but not one sign that says welcome,free parking,shop our uptown shops.We have a main st. manager that wants art in empty store fronts,are you kidding me.sorry,just venting a little,keep up the good work
To Carl Chipman,
The UCIDA, UCDC, Ulster County Planning Board (March Gallagher), HVEDC, NYSEDC, to name a few, all work with TSEC.
I for one, think that there are too many government agencies involved. We should be streamlining them to a single point or a couple of points of focus.
SUNY New Paltz has destroyed the quality of life for us non-SUNY residents of New Paltz.
the college continues to spend millions of our dollars beautifying their campus while their dirt-bag students dirty up our community with crime, overcrowding our roads, disrespecting our local laws & foul mouths in public.
Their social groups on campus espouse black supremacy & arab groups espouse anti-semitism quietly yet it is real.
i am an alumnus of that school back when we "knew our place" in town & didnt make waves -
the VOTING RIGHTS of these transient residents destroys our Village & Town government.
ANy non - liberal, non-lefty candidate has no chance @ being elected.
SUNY SUCKS !!!
ask any NP resident not employed by SUNY or any non-SUNY dependent business.
We all hate the college.
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