ALBANY - Business leaders in upstate New York are looking to Gov. Eliot Spitzer for revival of a region hobbled by high taxes and business costs as it struggles to keep people and attract jobs.

Thousands of people left New York state for other parts of the country last year, making it one of only four states that failed to grow since 2005, according to U.S. Census Bureau estimates released last month. New York's estimated population on July 1 was 19.3 million, down 9,538 from a year earlier.

That's due in part to the distressed upstate economy.

“Both people and businesses are voting with their feet in upstate New York,” said Thom Kraus, chief executive of the Niagara USA Chamber of Commerce.

In New York, the average workers compensation case costs $19,737, nearly double the U.S. average of $10,562, a recent study by the Public Policy Institute of New York State found.

The study showed the state's average electricity cost of 11.86 cents per kilowatt-hour is 58 percent higher than the national average 7.49 cents.

Spitzer defeated Republican John Faso in November after a campaign that emphasized trimming both taxes and spending, revitalizing the upstate economy and adding billions of dollars to education. There is optimism Spitzer can succeed.

Spitzer “spoke consistently and forcefully about these issues and has continued to talk about the need for better economic policy since the election,” said Matthew Maguire, spokesman for the Business Council of New York State.

“How effectively the special interests opposing change dig in is impossible to predict, but you can see an energy and momentum behind the possibility of change that is new and refreshing.”

Change is much needed, many business owners say.

New Yorkers pay an average of $44 per $1,000 of income in property taxes. That compares to the average U.S. cost of $33. State residents pay an average of $42 in income taxes per $1,000 earned, almost double the U.S. average of $22, according to the Public Policy Institute study.

Census figures released earlier this year show that the population of the Buffalo-Niagara Falls region fell from 1.19 million in 1990 to 1.15 million in 2005.

The area ranked as the nation's 37th most populous in 1990. It's now ranked 47th.

In the Syracuse area, the population fell from 660,000 in 1990 to 652,000 in 2005, dropping from 64th to 79th place.

Meanwhile, the Las Vegas area grew from 741,000 in 1990 to 1.71 million in 2005. Phoenix grew from 2.24 million to 3.87 million.

The New York State Economic Development Council released a study in November that found New York is competitive with other states in a number of areas, including incentives offered to businesses, its environment for encouraging innovation, its skilled work force and a strong education system.

But most business owners were pessimistic about the state's ability to attract investment because of high taxes, electricity costs and workers compensation costs, said Brian McMahon, the group's executive director.

The manufacturing sector has been particularly hard hit by those factors in recent years. In 2000, the industry accounted for more than 745,000 jobs statewide. That number fell to about 579,000 in 2005.

“If we can make steady, sustained progress on costs, when we have these other assets and advantages, that should form a solid foundation for growth,” McMahon said.

Many upstate business leaders say that policies set in Albany may be fine for New York City, not for places like Rochester and Binghamton.

Under legislation to clean up former industrial areas, “you can force a company in Manhattan to spend an enormous amount of money to clean up a site, but then they end up with an incredibly valuable piece of property,” Kraus said. “If you do that in Niagara Falls, at the end of the day, the land is not worth as much.”

A collection of upstate New York business groups has formed Unshackle Upstate, an initiative to press Albany for reforms it says will enhance the state's business climate.

The group is pushing to reform the state's $44.5 billion Medicaid program - by far the country's largest and criticized as rife with fraud - and the workers compensation system, rated as the second most costly per case in the nation after California.

Unshackle Upstate and others also want to alter or repeal other statutes they say hurt business.

Those include the Wicks Law, which requires multiple contracts on most local construction projects, the Taylor Law, which can give public employee unions advantages in contract negotiations, and the so-called scaffold law, which makes building owners and contractors liable for work site injuries even if workers were at fault.