Economic guru predicts financial pain for area residents stemming from Wall St. crisis

QUEENSBURY In the wake of the upheaval on Wall Street, Warren County residents should brace themselves for some severe aftershocks, the countys top economic official said Monday. Although job dislocation might not be as severe as in downtown Manhattan, we may be effected by a shrinkage of state government services and an increase in taxes, according to Warren County Economic Development Corp. President Len Fosbrook. Fosbrook expressed his distress over the nations economy Monday as the stock market took its largest one-day fall in history. Although the diversified and resilient local economy in the Glens Falls area is likely to insulate workers from massive job cuts, area residents are likely to experience substantial financial pain, Fosbrook predicted. Employment at area medical device manufacturing plants and health care providers is likely to be fairly stable, he predicted, but businesses will likely be experiencing a financial squeeze as the state government faces its own financial disaster. Were likely to see a very severe impact upstate from the financial crisis, Fosbrook said. The state derives 20 percent of its tax revenue from Wall Street, and as of today, theres no major brokerage house left standing, he said. A massive reduction in the state corporate tax revenue is likely to crimp the state budget, prompting state legislators to slash funding for vital services, and pass the costs on to local governments, Fosbrook said. Without a rollback in state mandates, such a scenario could mean that workers would be facing steep increases in income tax and the county would have to boost its property taxes, he said. This would be on top of the taxpayers of the nation shouldering the new $700 billion in debt that has been proposed. Such tax increases in New York and in Warren County could discourage business expansion here, he said. New York State is already one of the highest-taxed states in our nation, he said. There were some bright spots in Fosbrooks assessment of the area economy and the national financial crisis. He said that local banks are relatively strong, having avoided investing in the highly-leveraged mortgage-backed securities that have prompted the ruin of big financial firms. Also, the super-rich, who own lakeshore properties on Lake George and elsewhere, are likely to continue their prosperous lifestyle, he said. Another bright spot is tourism, which is likely to remain strong, he said, as our area is an increasingly attractive destination, in the era of spiraling gas prices, for the millions of people who live within a days drive. In addition, the Glens Falls regions economy has been in a growth phase that is likely to soften the sting, he said. Figures Fosbrook supplied to county supervisors Monday showed that between 2001 and 2006, the areas total gross product of goods and services rose 31 percent, far higher than the comparable communities. But the fallout from Wall Streets implosion will likely nonetheless inflict plenty of pain, he said, if 401ks continue to shrink, loans become harder to obtain, and food, fuel and commodities escalate in price. In the years to come, we may be experiencing stagflation, he said. You may be seeing major changes in lifestyle both here and across America. Fosbrook said the pain is likely to begin as soon as a few months from now for those in northern Warren County, as well as other rural areas of the nation. Im very concerned about the people now living from paycheck to paycheck, and how theyre going to fill their fuel tanks this winter to heat their homes, he said, noting that in Queensbury, hes seen more and more people stockpiling wood to heat their homes to cut fuel bills. Stay tuned, he said.

Vote on this Story by clicking on the Icon


Use the comment form below to begin a discussion about this content.

Sign in to comment