Is the Governor’s budget a step toward Depression for the North Country?

The vast majority of economists — even many conservatives — agree that in a deep recession the government’s best response is to boost spending.

In the short term, or so goes the conventional wisdom, stimulating economic activity outweighs other considerations, including tax- and deficit-cutting.

Governor David Paterson has clearly decided that New York state must follow a different path.

He wants to balance the budget quickly, with a bare minimum of tax increases.

Some lawmakers want to go even further. In an interview yesterday, state Senator Betty Little suggested cutting taxes in an effort to stimulate private sector growth.

But any tax cuts would have to be offset by even more draconian cuts to state agencies, to school districts, and to local governments.

All of these approaches are worth debating.

But in the short term, the budget plan proposed by Governor Paterson run a serious risk of pushing the North Country into a full-scale Depression.

Unemployment in much of the region already tops 10%. In recent months, we’ve seen a brutal cycle of lay-offs and plant-closings in the private sector.

This spending plan would close three prisons in the region, and two Adirondack Park VICs.

It would also trigger teacher and local-government layoffs, likely of some magnitude.

In a region that has long been far too addicted to taxpayer money for our jobs and and pet projects, the Governor is asking us to go cold turkey.

The question is simple: Can already hard-pressed communities like Newcomb, Lyon Mountain, Moriah and Ogdensburg survive?

Can they hold on until the private sector bounces back? Or will these cuts push them beyond a tipping point?

Consider the town of Moriah, already battered by the loss of heavy industry. Without those prison jobs, the already dwindling school population will take a massive hit.

If the school were to close, and merge with a nearby district, the community might have reached a point of no return.

As Governor Paterson describes it, we have few options: There simply is no more money to spend.

But perhaps this is a time when the sacrifices should be targeted more carefully, or spread more evenly over the entire state.

Lacking that, the Governor’s team needs to build a credible program for helping communities battered by sudden public-sector downsizing.

Here’s one idea:

The Governor’s budget says the closure of the three North Country prisons would save the state roughly $45 million over the next two years.

If the prisons do close, why not roll that savings into a permanent capital investment fund for the region?

The fund would be controlled entirely by locals, with oversight from the state Comptroller, but would be targeted specifically to help entrepreneurs and new start-ups.

The state would still realize all the savings into the future, but we would be left with some seed money, something we could use as we see fit as we begin to rebuild our private sector.

A fund like this would acknowledge two basic truths: First, that we’ve become too reliant on taxpayer funded jobs; and second that we need a little time to wean ourselves from Albany and Washington.

Without this kind of serious thinking and planning — without leaving some grounds for hope — Governor Paterson’s budget could cripple the North Country for years to come.

While the rest of New York state recovers, we may emerge as something worse than a permanent rust belt.

We could be a depopulated backwater, abandoned first by industry and then by government.