Gov. Andrew Cuomo brought his first executive budget and his message of economic and political change on the state”™s road to recovery to the Manhattanville College campus in Purchase this month. Both the tough-talking messenger and his message of fiscal discipline and performance-based funding for health care, education and other programs in a new “business-friendly New York” were warmly welcomed by an enthusiastic crowd.
The governor”™s Feb. 3 visit, though, shed no more light on his regional plan for economic development to spur private-sector investment and jobs creation and what that restructuring means for existing economic and industrial development agencies in Westchester and the Hudson Valley.
Cuomo in his $132.9 billion executive budget for 2011-12 proposed to create 10 Regional Economic Development Councils headed by Lt. Gov. Robert Duffy. Council members will be drawn from the private sector, local governments, state agencies and academic institutions.
Funding the councils
Guided by long-term strategies developed by local stakeholders, the councils will act as “one-stop shops” for all state-supported programs of economic development and business assistance. According to the governor”™s executive budget briefing book, they will compete for economic development grants and “develop a strong performance management system to guide the state”™s future economic development investments.”
The councils initially will be backed by $200 million in funding, $70 million of which will be in the form of tax credits to businesses in the state”™s year-old Excelsior Jobs Program. Cuomo wants to enhance those credits within the program”™s existing spending cap and extend the tax benefit period for companies in the Excelsior program from five to 10 years.
The regional councils initially will receive $130 million in capital funding.
That money will be redirected economic development funds that are not already committed to jobs-creating projects.
The council proposal is part of the Cuomo administration”™s sweeping redesign of state-funded programs and policies whose results have failed to match the state”™s investments in them.
From 2000 to 2010, private-sector employment in the state declined by 2.1 percent, or 150,000 jobs. Hardest hit was the manufacturing sector, which over the decade declined by 38.4 percent, losing 288,000 jobs. Yet the state”™s economic development spending over the same period rose from $448 million to $1.6 billion, according to administration officials.
The state”™s return on that investment has been difficult to quantify, officials said in their budget briefing. They said businesses participating in the Empire Zone and other incentive programs have not had to account for job growth. Regional efforts at effective development plans “have been superseded by priorities set in Albany,” they said.
Investing in the state”™s future
This new Albany priority ”“ regional councils ”“ has economic development officials around the state waiting to see whether they will take over functions, program funding and financing powers of municipal industrial development agencies and local development corporations.
“I guess the honest answer is, ”˜Not sure yet,”™” said Brian T. McMahon, executive director of the 900-member New York Economic Development Council in Albany. McMahon said the councils”™ purposes still were not clear. It”™s not yet known, he said, whether they will award incentive packages to job-creating companies, which has been the long-standing role of IDAs.
“Certainly conceptually, we are very strong supporters of regional empowerment,” said McMahon. “As the governor states, while we are one state, we”™re not one economy.
“I think that they were smart in making sure that they do this right. They put a lot of capital in these regional councils and I think it”™s important that they do it slow and get it right. We want them to get off to a good start.”
At the Hudson Valley Economic Development Corp. in New Windsor, CEO Michael Oates said his independent organization, which represents a seven-county region, expects to work with the governor”™s councils as partners. The councils should “enhance” organizations like HVEDC, he said, as they pursue shared goals of high-quality jobs and investment in New York.
“We believe that the best ideas build from the local level up to Albany,” said Oates. “The Regional Council will follow that model.”
”˜Working together for one goal”™
At this time, “It”™s a lot of rumor and speculation and not a lot of concrete outlines of what exactly it”™s going to be,” said Laurence Gottlieb, director of the Westchester County Office of Economic Development. “The issue is going to be, does a regional council enhance economic development”¦or does it add on another layer of bureaucracy to muddy up the waters. That”™s a critical issue.”
Business leaders and Westchester County officials “are trying to go through proper channels” in the new Albany administration and “are trying to steer the dialogue in the right direction,” Gottlieb said. He noted leaders here have worked with Kenneth Adams, Cuomo”™s choice as the state”™s economic development commissioner and Empire State Development Corp. CEO, when he headed the New York State Business Council.
Gottlieb said this region has an advantage in the governor”™s redesign for having already piloted a regional economic development initiative, BioHud Valley. Launched last fall by the Hudson Valley Economic Development Corp., the marketing campaign aims to attract a growing cluster of biotechnology companies to Westchester and the Hudson Valley. “That”™s a perfect example of what you can get regionally when you have people working together for one goal,” Gottlieb said.
Compared with economically ailing upstate communities, “I feel downstate we”™re in a far better position because we”™ve worked in regional collaboration already with a lot of success stories out there,” he said.
Regarding the impact of Cuomo”™s regional council plan, “I”™m more optimistic than pessimistic,” Gottlieb said. “I see Westchester already has in place a major collaborative effort. Anything additional to me would be a booster rocket.”