The malaise of upstate New York is really the fault of less than progressive politicians that did not recognize change and embrace it. On the other hand, Albany and the Hudson Valley has had a thriving tech/entrepreneurial community and has done reasonably well, as has New York City. They work with the same tax structure.
The New York State Legislature has been one of the most dysfunctional in America. It has been for the thirty years I have paid attention to it. Its dysfunction is institutional rather than party specific. What is scary is that Washington has, over the past 15 years of so, become almost as dysfunctional as Albany.