economy

ABO To Schenectady: Why So Many Authorities?

Schenectady County is served by an alphabet soup of economic-development authorities that have been modestly successful, but should be combined and consolidated since so many of their goals and operations overlap, the Authorities Budget Office concluded in a report issued this morning.

The county is served by a grand total of seven public authorities, one of which essentially no longer functions as defined by the law. Meanwhile, the authorities don’t do enough to cooridnate and share resources with one another, the ABO found.

The report also found that with some many authorities in place, money tends to get allocated a bit haphazardly. That includes $600,000 in economic development funds to the County Business Council, but that entity no longer really does what it was originally intended to perform.

From the ABO:

For example, over $600,000 of economic development funds have been provided to the CBC since 2003 for the CBC to meet its operating costs although the CBC no longer fulfills its original purpose. In another instance, over $25,000 is paid annually to municipal and authority staff, in addition to their full time salaries, to provide administrative and operational services to the various economic development authorities. These services are generally provided during the individuals normal work day.

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Committee To Save NY Hires New Firm, Launches New Ad

The pro-Cuomo, business-backed Committee to Save Nwe York is back – as promised – and it’s getting an early jump on the 2012 session with a new TV ad that continues the governor’s new theme of “getting things done” in Albany while Rome Washington burns to the south.

The ad, which is the first in a series, hits the airwaves tonight in a “sizable” buy, according to the committee’s new spokesman, former Pataki administration spokesman Mike McKeon. (More on that later). The spot lauds the tax code deal, saying it gives a break to “all New Yorkers” and includes the “lowest middle income tax rate in 58 years.” Here’s the tagline:

CSNY spent close to $10 million to support Cuomo in the budget battle (such as it was) earlier this year, and has pledged to raise and spend about the same in 2012. The committee was gearing up for a fight against reinstating the so-called millionaire’s tax, but following this week’s tax code deal – which, by the way, every key CSNY player, from Kathy Wylde to Steve Spinola to the state Business Council, supported – they’ve re-tooled their agenda.

The top priorities for 2012 now include: Continue fiscal discipline by “working to reduce spending by $2 billion will help balance the budget and increase New York’s competitive edge,” enacting pension reform, passing mandate relief and regulatory reform, and legalizing non-Indian casino gambling. The committe has also re-launched its Website.

McKeon’s firm, Mercury Public Affairs, is replacing DKC in handling the committee’s communications and lobbying. I reported last month that DKC, which has strong and long-standing ties to Cuomo, had decided not to continue its contract with CSNY.

Mercury is home to a number of former Pataki administration aides – McKeon, Kieran Mahoney, Tom Doherty. But it has expanded considerably and also includes a number of Democrats like former Bronx BP Freddy Ferrer and former California Assembly Speaker Fabian Nunez – among others.

This isn’t the first time McKeon has worked to support Cuomo. During the 2010 campaign he headed up a committee of Republicans who crossed party lines to support the Democratic governor – a move that didn’t thrill Pataki, who backed former Rep. Rick Lazio’s failed gubernatorial campaign.

WNY, CNY, And North Country Win Big

The Regional Economic Development grants were just announced. Of the 4 “Best Plan” proposals, 3 came from upstate with the fourth going to Long Island. Those regions get more than $100 million for their plans. Most other regions get about $60m with the Southern Tier receiving the smallest piece of the pie – only $49.4m. In all, the state handed out a little bit under $800 million of the $1b that was earmarked for the regional councils.

Before announcing the results, Governor Cuomo said he struck a deal with Assembly Speaker Silver and Senate Majority Leader Skelos to include these competitive grants in next year’s budget. Joking that it was the quickest meeting he’s ever had with the leaders, only 3 minutes, and it took place on the stage before the event started.

Here’s the complete breakdown of who is getting money:

  • West: $100.3m
  • Southern Tier: $49.4m
  • Finger Lakes: $68.8m
  • Central NY: $103.7m
  • Mohawk Valley: $60.2m
  • North Country: $103.2m
  • Capital Region: $62.7m
  • Mid Hudson: $67m
  • NYC: $66.2m
  • Long Island: $101.6m

Regional Economic Development Councils, Day Two

The second day of the Regional Economic Development Council meetings is taking place in Albany today. Gov. Andrew Cuomo is dropping in on some of the meetings as he did yesterday. The proceedings are being broadcast on the below Livestream feed.

Here’s the sked:

Southern Tier Regional Economic Development Council – 9 a.m.
Capital Region Regional Economic Development Council – 10:30 a.m.
Central New York Regional Economic Development Council – 12 p.m.
New York City Regional Economic Development Council – 2:30 p.m.
Mid Hudson Regional Economic Development Council – 4 p.m.

Wilson: Supercommittee Failure Due To ‘Leadership Deficit’

Harry Wilson has released what I believe is his first official policy statement since his failed bid for state comptroller last fall, or, at the very least his first of this election cycle, in response to the supercommittee’s failure to reach a deficit reduction deal.

It’s fitting that Wilson should choose this particular topic on which to re-enter the political discourse, since he has considerable experience trying to get companies – and even entire industries – back onto the path of fiscal health.

Wilson, who came within spitting distance of ousting Democratic state Comptroller Tom DiNapoli last fall during his inaugural run for elected office, is now “seriously considering” another statewide run – this time against Sen. Kirsten Gillibrand, who must run for a full six-year term in 2012.

Gillibrand wasn’t a supercommittee member, but Wilson’s critique of Washington writ large could be construed as a swipe at the junior senator – or at least at the institution of which she is a member.

Here’s Wilson’s statement in full:

“Our political leaders have been tasked with finding a bipartisan solution for America’s great fiscal crises. Today, they have failed again, despite the fact that the consequences for countries that fail to deal with their debt and overspending problems are splashed across our television screens every day.”

“I have spent much of my professional career working to fix companies that have amassed too much debt to sustain in times of anemic growth, so I have seen this movie before. Strong leadership and forward thinking can minimize the pain for an overleveraged company or country, while feckless leadership and procrastination make a bad situation worse.”

“Thanks to the Super Committee’s failure, our leaders in Washington are making things worse, despite the existence of a number of bipartisan and Republican plans that would more than deliver the necessary savings.”

“This leadership deficit threatens the promise of America. As a father of four, I am sickened by it. We cannot let political paralysis and weakness threaten our children’s future. I, like many, have been fortunate to live the American Dream – yet now, protests from people on the right and the left who are sadly losing faith in that Dream underscore how seriously it is threatened today.”

“In order to fix America and put our country on a sustainable path towards fiscal stability, growth and future prosperity, in order to ensure the creation of good jobs for out-of-work Americans, I am urging Congress and the President to go back to the negotiating table and solve for our future. As the tragic examples of Greece and Italy can attest, they don’t have a choice.”

Bloomberg: Occupy Wall Street Decisions Not Up To Me

Mayor Bloomberg insisted this morning that his administration isn’t driving the bus when it comes to making decisions about how to deal with the Occupy Wall Street protestors in the privately-owned Zuccotti Park.

The mayor said he learned just before midnight that Brookfield Properties, the park’s owner, had decided not to go ahead with its planned removal of protestors and cleaning of the space this morning.

“This issue here is that this is not a public park,” the mayor said during his weekly appearance on WOR Newstalk Radio 710.

“If this was a city park we have regulations that we can enforce and that the courts will back us on. We don’t allow people to sleep and set up tents in the park….this is something different; this is a privately owned piece of property.”

“…It’s up to Brookfield as to how long this will go on,” the mayor added later. “…There has to be some some resolution eventually. We’ll just have to wait and see what Brookfield wants to do.”

The clean-up was supposed to take place at 7 a.m., and some protestors had pledged to resist eviction – albeit peacefully.

Bloomberg said Brookfield had decided to try to reach an agreement with the protestors. He predicted there will be a lull of several days before the company tries again – absent a deal – to remove people, ostensibly to clean the space, which officials say has become a public health hazard.

At that point, it will likely be more difficult to provide police protection, Bloomberg said. But he also pledged the NYPD would support Brookfield as needed.

Bloomberg said unnamed elected officials had called Brookfield, “threatening them and saying, ‘If you don’t stop this, we’ll make your life more difficult.”

“If they spent half as much time trying to promote the city and get jobs to come here we would go a long ways towards answering the concerns (of the protestors),” the mayor added.”

Bloomberg later said he has no first-hand knowledge of any “threats.”

The mayor reiterated that he is a strong supporter of 1st Amendment rights, but also noted some people who aren’t part of the protest and want to be able to use Zuccotti Park aren’t able to do so.

He also made it clear – again – that he doesn’t agree with that the demonstrators are doing, saying: “The longer this goes on, the worse it is for our economy.” Bloomberg cited state Comptroller Tom DiNapoli’s report earlier this week that revenues are down on Wall Street and layoffs are likely.

Wall Street Ups And Downs Leave Consumer Confidence Low

Consumer confidence in New York may be slightly higher compared to the rest of the country, but Wall Street’s peaks and valleys have left most residents sour on the economy.

A Siena College survey released this morning shows 60 percent of New Yorkers surveyed responded they are financially hurt by high gas prices and two-thirds say they worry about paying for groceries.

The news comes as demonstrators continue to protest on Wall Street. Comptroller Tom DiNapoli released a report this week saying revenue from the financial sector this year will be lower than expected, leading to a possibly greater budget deficit.

“While Wall Street numbers jumped and plummeted as demonstrators moved in and expressed their anger, consumers across New York continued to hang their heads and keep their wallets closed,” according to Dr. Doug Lonnstrom, professor of statistics and finance at Siena College and SRI Founding Director. “Slightly more New Yorkers now expect to lose ground financially than those that predict they will make economic progress this year and a majority volunteer a negative prognosis for the patient we call „business conditions.‟ Still, and with a grain of salt, the future outlook of state residents, as dismal as it is, is far more robust than the national mood. No demographic group even approaches being more optimistic than pessimistic. It’s no surprise that the ranks and influence of both “Occupy Wall Street‟ and the Tea Party are growing.”

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COA To Hear Suit Challenging Public Money For Private Sector (Updated)

The Court of Appeals, the state’s highest court, will hear arguments Wednesday in a lawsuit filed by 50 taxpayers over whether its within constitutional bounds to provide and distribute funds and credits to private organizations.

The suit argues, in part, that the funding of projects violates a section of the state constitution that prohibits gits or monetary loans to private entities.

Appropriations being challenged include money sent to the New York Apple Growers Association, the Long Island Wine Council and funding sent to public benefit corporations that ultimately went to IBM in Westchester County and GlobalFoundries in Saratoga.

The state Supreme Court initially dismissed the suit, writing that there was no violation of the constitutional provision.

Lawyers for New York state argue that the money wasn’t a gift because they were disbursed in exchange for for creating jobs.

The suit comes after Gov. Andrew Cuomo announced a $4.4 billion investment from private technology firms including GlobalFoundries and IBM in New York. It was coupled with $400 million in tax credits and incentives in funding for SUNY and low-cost power.

GlobalFoundries has been under particular scrutiny for the generous cash grants given to the company in order to bring its chip-fabrication operations to the upstate region.

And it comes as the Cuomo administration’s regional economic development councils are in the middle of developing job creation ideas while competing for up to $1 billion in incentives.

Lawmakers and elected officials, along with business boosters, have argued over the years that the money helps in turning around the state’s generally poor economic climate, especially upstate, and counteracts New York’s comparatively high taxes.

The New York Miracle?

New York fared better during the Great Recession when it came to private-sector unemployment and job creation, compared to other large and neighboring states, the Rockefeller Institute found in a study.

But, perhaps frustratingly for economic-development officials and other policy wonks, it’s unclear how New York, with its rapidly shrinking manufacturing base and sky-high taxes, beat the odds.

Though business groups have long derided the state’s poor economic climate, high taxes and tough environmental regulations, the state’s housing market did not take as big a hit when compared to the rest of the country.

But Bob Ward, deputy director of the Rockefeller Institute, writes that may tell only one part of the story. At the same time, New York’s population has been largely flat over the last decade and has not grown at the same pace as the rest of the country.

Meanwhile, 2011 saw a decline in private-sector job creation for New York, suggesting that the state may be in for a double-dip recession with the rest of the U.S.

Gov. Andrew Cuomo pushed through a state spending plan that was largely cheered by economic conservatives. It closed a $10 billion budget gap without raising taxes and the Democratic governor sided with Republicans when it came to allowing a tax on those making $250,000 or more to expire.

He also worked to pass the long-sought 2 percent limit on local and school property taxes. But the report finds it will take years to determine if the recent tax policy in New York is a success.

All this muddles what policymakers should do to stimulate job creation in the future, Ward writes:

Researchers and policymakers do not fully understand why the state’s recent relative performance has been strong. And that suggests we may not know for sure what the Empire State must do to compete successfully in the future. Improving our understanding of such questions will be essential, if New York is to gain its desired share of national and global economic growth.

2011 08 31 the Surprise Economy