Socioeconomic Impacts of Disinvestment on Communities in New York State

Sen‐Yuan Wu and Hyman Korman

American Journal of Economics and Sociology, 1987, vol. 46, issue 3, 261-271

Abstract: Abstract. In order to determine the effect of industrial decline on local tax revenues and to discern the stresses caused by higher demand for social services in a period of government fiscal crisis, the industrial migration activities and local government budgets of New York State from 1962 to 1976 are analyzed. These regression analyses show that: (1) manufacturing decline handicaps the growth of local property tax revenues; (2) when possible, local governments compensate for their lost property tax revenues by raising non‐property taxes; displaced workers are likely to seek public assistance; and (4) local welfare expenditures do not correspond to the soaring social service demands. Provided that plant openings seldom re‐employ displaced workers, the authors suggest that it is as important for local governments to adopt policies for retaining their current manufacturing plants as to attract new industrial investments.

Date: 1987
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