Population slowdown needn't hurt economy

Slow population growth doesn't have to mean economic decline -- but it can if Long Island's leaders make the wrong decisions.

Business executives and economists said the region, like many with small population gains, can expect to have fewer tax dollars and other resources to invest in institutions that spur commerce than places with robust growth.

Continued prosperity here likely will be determined by how money is spent, and if it's squandered there's little hope of recovery, the experts said.

Long Island's population grew by just 2.86 percent since 2000, according to the 2010 Census released Thursday. In the 1990s, the growth rate was nearly twice that, at 5.5 percent.

"The absence of large numbers of new residents places much more pressure on existing residents and businesses to fund the services that everybody wants from government," said Christopher Jones, research vice president at the Manhattan-based Regional Plan Association.

"What gets paid for and what doesn't will affect businesses' ability to grow," he said.

Nassau and Suffolk counties confront this challenge from a position of strength in that personal incomes and home values are far higher here than in fast-growing areas. The workforce is well-educated, businesses are beginning to work closely with research institutions such as Stony Brook University to commercialize inventions, and transportation networks are extensive, though aging.

Still, the region's many layers of government don't always collaborate, and investments in roads, affordable housing, telecommunications and other systems that companies rely on often spark controversy.

Further tax increases, Jones said, were unlikely given the already heavy burden here. So officials such as county executives and town supervisors will be forced to reduce -- and in some cases discontinue -- popular programs because the tax base can no longer support them.

The stakes are higher than in the past because slow population growth constrains the ability to recoup misspent funds, he added.

Long Island's small population gain since 2000, coming after three decades of slow growth, should also cause political and business leaders to re-examine what drives the economy, said Mark G. Dotzour, a real estate economist at Texas A&M's Mays Business School.

"Population increases when people are drawn to an area because of jobs. . . . If you aren't growing, that's a sign the cost of doing business in your region is too high and your companies cannot compete globally," he said.

Gov. Andrew M. Cuomo said the latest census figures offer "stark evidence of the lack of growth in certain regions, as well as ongoing stagnation.

"We must correct the trajectory of the state by changing the financial and operational paradigm of our government," he said. "My budget and the agenda I have put forward charts that new course and it is important, now more than ever, that we follow through on it."

Dotzour and others noted that regions with slow growth could bolster their economies by encouraging tourism. Dotzour said Long Island is blessed with golf courses, beaches and the scenic East End that could bring in millions of dollars in additional spending if marketed more aggressively.

Similarly, business executives faced with the prospect of stagnating revenue will have to tailor products and hiring to growing numbers of seniors and minorities, as revealed by the census, according to Pearl Kamer, chief economist at the Long Island Association business group.

A shortage of skilled workers is the biggest problem. Baby boomers are retiring. The number of women entering the workforce has slowed, and immigrants cannot afford housing.

These groups allowed employers in Nassau and Suffolk to expand between 1970 and 2000 despite the population increasing by only 10 percent -- well off the national growth rate of 38 percent.

Kamer said the future workforce would increasingly be older, foreign-born and commuting from New York City.

They will require efficient mass transit and affordable apartments, both of which require improvements that have met resistance in some neighborhoods.