$700M for New York Upstate Economic Plan in Budget Agreement

Legislators passed the fiscal year 2008-09 budget last week, increasing spending by 4.9 percent over last year and investing in New York’s Upstate economy despite projected shortfalls for several years to come.
 
Lawmakers approved $700 million for the Upstate Revitalization Fund, an initiative that Gov. David Patterson continued to push forward following the resignation of Gov. Eliot Spitzer last month. In January, former Gov. Spitzer unveiled the Upstate proposal, asking lawmakers for $1 billion to encourage economic growth through targeted investments in high-technology development, agriculture, housing, transportation, and state parks (see the Jan. 23, 2008 issue of the Digest). Many of Gov. Spitzer’s initial requests for funding were fulfilled, including $120 million for the Regional Blueprint Fund - $200 million less than Gov. Spitzer’s recommendation - and $180 million for City-by-City investments, which was $65 million above the governor’s original recommendation. Additional components of the approved fund include:

• $40 million for the Agricultural Development Fund;
• $35 million for an Investment Opportunity Fund;
• $12 million to enhance existing state programs supporting the development of high technology; and,
• $5 million to expand the Universal Broadband Initiative.

Downstate Regional Projects slated to receive funding in the enacted budget include $35 million for R&D activities on Long Island, with $5 million earmarked for the Cold Spring Harbor Laboratory and $10 million for the State University of New York (SUNY) Stony Brook Energy Research Center.
 
The New York State Foundation for Science, Technology and Innovation (NYSTAR) will receive $48.4 million in new appropriations from all funds in FY 2008-09 (down from $60.7 million last year) and $211.3 million in re-appropriations – an increase of $29.2 million over last year. From the Science, Technology and Academic Research Account, $34.2 million is allocated to the High Technology Program – down $1.3 million from last year. New appropriations for state operations and aid to localities include $14.7 million to support matching grants for Centers for Advanced Technology, $8.2 million for the Research Development program, $4.9 million for the High Technology matching grants program, $1.5 million for matching grants for college applied research centers, $1.5 million for technology development organization matching grants, and $1.5 million for training and business assistance programs.
 
Lawmakers approved $63 million in new FY 2008-09 appropriations for the Department of Economic Development and $50.5 million in re-appropriations. The Empire State Development Corporation is slated to receive $67.6 million in new appropriations and $3.4 billion in re-appropriations, with $6.9 million divided equally between the six centers of excellence.
 
The Energy Research and Development Authority will receive $31.2 million in new appropriations with $18.3 million earmarked for the research, development and demonstration program. From the Energy Research and Planning Account, $9.6 million will support research, development and demonstration program grants with $735,000 allocated to the University of Rochester laboratory for laser energetics.
 
The enacted budget authorizes nearly $6 billion in capital funding for SUNY, the City College of New York (CUNY) and community colleges. The budget also authorizes the creation of an endowment for SUNY and CUNY that provides a permanent source of recurring revenue with the funding source to be determined in the future, according to the governor’s office. During his State-of-the-State Address earlier this year, former Gov. Spitzer said the endowment should be at least $4 billion. Gov. Spitzer recommended selling a portion of the state’s lottery to finance the endowment – a proposal rejected by legislators.
 
In addition, SUNY Upstate Medical University is slated to receive $10 million for an umbilical cord blood bank first proposed in 2006, reports The Post-Standard. The proposed facility will provide stem cell research opportunities.
 
The FY 2008-09 spending plan relies heavily on borrowing and increased taxes and fees, including an increase of $1.25 per pack of cigarettes and $70 million in additional assessments on health insurance policies, reports the Times Union. The New York State Budget Office projected in December a general fund budget gap of $4.3 billion in FY 2008-09 and $6.2 billion in FY 2009-10 (see the Dec. 5, 2007 issue of the Digest). Critics of the new spending plan said in the Times Union article there will likely be an imbalance in the 2009-10 fiscal year budget and that a mid-year correction may force lawmakers back this year to cut programs, find emergency revenues, or do both.
 
The fiscal year 2008-09 enacted budget is available at: http://www.budget.state.ny.us/