$101M NYSTAR Increase Among Gov’s Proposals

The New York State Foundation for Science, Technology and Innovation (NYSTAR), the state’s lead tech-based economic development agency, would see a significant boost in funding under a proposal unveiled by Gov. David Paterson to distribute $100 million in new Innovation Economy Matching Grants. Announced during his State of the State Address, the grants would be divided among a new Technology Seed Fund ($25 million), a Small Business Revolving Loan Fund ($25 million) and funding for other economic development initiatives ($45 million).

NYSTAR is slated to receive $142 million in FY11 general fund appropriations, an increase of $101.3 million. Total funding for the High Technology Program is $135.7 million, which includes $100 million for the matching grants and $6.9 million for the state’s six centers of excellence. Additional NYSTAR appropriations include $1.9 million for the Research Development Program (down $4 million), and $1.5 million for state matching funds for the manufacturing extension partnership program, the same as last year.

Two of New York’s three economic development programs would be merged to form a new agency for stimulating job growth under another proposal outlined by Gov. Paterson. The new Job Development Corporation would replace the Department of Economic Development and the Empire State Development Corporation and focus on growing jobs by enhancing industrial competitiveness, revitalizing downtown areas, advancing high technology and promoting tourism, according to a press release. NYSTAR would continue its efforts as a stand-alone entity.

The governor’s plan to create new economy jobs and attract capital investment also includes the creation of a new Excelsior Jobs Program to replace the current Empire Zone Program. The amount of tax credits available for the new program would be capped at $250 million, or 55 percent less than what is currently available under the Empire Zone Program, reports the Buffalo News. The new program also would narrow the focus of the tax incentives and mandate that jobs created must be retained for a period of time before benefits are handed out, the article states.

Gov. Paterson also proposed a major overhaul to the state’s system of public higher education. The Public Higher Education Empowerment and Innovation Act would remove from the state budgeting process tuition-rate setting for State University of New York and City University of New York. This would allow the institutions to receive and disburse revenues from tuition and self-supporting program activities without an appropriation, according to budget documents.

To close a projected $7.4 billion deficit, Gov. Paterson recommends spending reductions across schools, health care, state agencies and $1 billion in tax and fee increases. The 2010-11 executive budget is available at: http://publications.budget.state.ny.us/eBudget1011/ExecutiveBudget.html.