State's economic development chief defends Cuomo's projects

By Economic IndicatorsAssociated Press

Gov. Andrew Cuomo's economic development programs continue to bring companies and jobs to New York, the state's top economic development official testified Monday as lawmakers questioned whether enough is being done to hold firms to their promises and to claw back taxpayer money when they don't.

Howard Zemsky, president of Empire State Development, testified during a state budget hearing on Cuomo's plans to boost New York's economy. The Democrat's plans for the upcoming fiscal year, unveiled this month, include spending more than $1 billion on economic development projects.

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During more than three hours of testimony, Zemsky defended the massive amounts of taxpayer money spent on efforts to create jobs, one of the most contentious issues facing Cuomo's administration as he prepares to run for a third term and mulls a possible run for president in 2020.

Since Cuomo introduced Regional Economic Development Councils in 2011, the program has helped create or retain more than 200,000 jobs across the state, Zemsky testified. When pressed by lawmakers, he pointed out that about one-quarter of the jobs were new, while the rest were retained positions.

Cuomo's economic development programs have focused on creating jobs upstate, specifically in the region between Albany and Buffalo, by attracting high-technology companies and entrepreneurs. His favored method is to pit various regions against one another in state-sponsored competitions for funding.

"We were going downhill for 40 years," Zemsky said. "We don't want to be picking winners and losers all over the place, but we don't just want to leave these places to suffer."

Cuomo is seeking another $750 million for the Regional Economic Development Councils program in charge of directing state funding for local projects. The program has directed $5.4 billion to more than 6,000 projects since Cuomo took office seven years ago, Zemsky said.

Critics of the governor's economic development programs say the efforts have spent billions of dollars in taxpayer money but haven't produced that many jobs, especially in upstate areas that continue to struggle economically. Some upstate lawmakers questioned the success of the programs, pointing to job-creating projects that were announced years ago but never started or to firms that committed to starting operations with state tax breaks only to pull up stakes.

"Those types of things happen all the time," said Sen. Rich Funke, a Republican whose district includes the Rochester area.

Lawmakers in particular wanted details on a new $90 million facility built in suburban Syracuse with state funding. The building is empty after Soraa, the LED lightbulb manufacturer scheduled to move in last year, pulled out of the deal when the state refused to kick in tens of millions of dollars in additional funding. Another company, NexGen, will move into the building this year, but only after the state spends another $15 million on it.

"Were there any clawback provisions for Soraa since they basically stiffed the state?" asked Sen. Catharine Young, a Republican from western New York.

Zemsky responded that the state was "best served" by moving forward with the NexGen plan.

Among the other economic development funding sought by Cuomo: $100 million for downtown revitalization projects and $600 million for a life sciences research center to be built in the Albany area.

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