Lawmakers Embrace Regional Approach to Economic Development in NY

A budget agreement reached last week between Gov. Andrew Cuomo and legislative leaders adopts the economic development reforms set forth by the governor to establish a regional strategy for job creation. The approved budget allocates about $200 million in existing capital funds and tax credits to support 10 regional economic development councils and merges the New York State Foundation for Science, Technology and Innovation (NYSTAR), the state's tech-based economic development initiative, into the Department of Economic Development.

The budget approved by lawmakers dedicates $130 million in existing capital funds to establish 10 regional economic development councils serving as a one-stop-shop for all state-supported economic development and business assistance programs in each region, according to the governor's office. The money for the councils was appropriated for capital projects in prior years, meaning no new funds will be used to support the councils. Under the budget agreement, the governor will direct $30 million of his own pot of capital projects funding, and the other $100 million is obtained by canceling plans to construct a consolidated data center on the campus of SUNY IT, reports the Times Union. Another $70 million in tax credits from the Excelsior Jobs program also will support the efforts of the councils.

The budget makes changes to the Excelsior Jobs program by extending it from five to 10 years and expanding eligibility of companies to include agricultural co-operatives. The program, which provides tax incentives for high-growth industries, was established last year to replace the NY Empire Zone Program (see the June 23, 2010 issue of the Digest).

Lawmakers accepted the governor's recommendation to merge NYSTAR into the Department of Economic Development — a move that is expected to save about $1.9 million. In total, the budget consolidates eight agencies or authorities into four, saving more than $50 million in the upcoming year, according to budget documents. The budget agreement provides $34 million for the High Technology Program, $5.2 million for the Centers of Excellence, $1.5 million in state matching funds for the Manufacturing Extension Partnership Program, and $343,000 for the Research Development program within the Department of Economic Development. Lawmakers approved $68.2 million for NYSTAR as a stand-alone agency last fiscal year, which included $29.5 million for a matching grants program.

The FY12 budget passed by the legislature totals $132.5 billion and closes the current gap with $9.3 billion in spending reductions, according to the governor's office. Funding for all state agencies will be reduced by 10 percent. Budget documents are available at: http://assembly.state.ny.us/2011Budget/?sec=finalbills.