NYSTAR Remains Stand-Alone Entity in Enacted Budget

Legislators in New York rejected Gov. David Paterson's proposal to consolidate the state's primary organization for supporting and enhancing technology-based economic development into the state's traditional economic development organization (see the Dec. 17, 2008 issue of the Digest). Leaving NYSTAR as a stand-alone entity, the lead TBED agency for New York will continue to administer successful investment, business assistance, and research programs that have helped to create high-wage jobs for nearly a decade.

Gov. Paterson signed the FY10 Transportation, Economic Development and Environmental Conservation Budget last week, providing $42.2 million of new appropriations for the New York Foundation for Science, Technology and Innovation (NYSTAR). This is a $6.2 million decrease from FY09. The figure does not include reappropriation carryovers from previous years.

The enacted budget also reforms the state's Empire Zone program, mandating increased performance measures from companies that receive the tax breaks. Under the agreement, businesses already participating in the program are required to produce a 1:1 return on investment - far less than the governor's proposal, which required a 20:1 return and applied to all businesses involved in the program. Additionally, the budget agreement moves up by one year the sunset date by which the program is scheduled to end to June 20, 2010.

Lawmakers approved the governor's proposal to create the New York Higher Education Loan program, based on recommendations from the New York State Commission on Higher Education. The state is providing $50 million for the first year and $10 million a year thereafter to help capitalize a default reserve fund for low-interest student loans, according to the governor's office.

Using $561.2 million in federal stimulus funding, lawmakers established the Senate's Green Initiatives Institute, supporting green jobs and community development, according to a press release from the New York state Senate majority leader. The institute will operate through a competitive-grants program for municipalities, community colleges, nonprofit organizations, and small businesses, and focus on renewable energy development and distribution, weatherization, and retrofitting,

The FY10 budget agreement closes a $17.7 billion budget gap and reduces by $6.5 billion recurring spending. Tax and fee actions include a temporary income tax increase for high-wage earners, increased vehicle registration fees, a cigar tax, and a five-cent nickel deposit for bottled water.

The FY10 enacted budget bills are available at: http://www.budget.state.ny.us/budgetFP/enacted0910.html.