NYS Legislature Introduces 61 Economic Development Bills
New York State’s economic development efforts cost $4.4 billion in 2018. These investments were made without sufficient transparency, accountability, and evaluation to determine their effectiveness, and yet the Enacted Fiscal Year 2020 Budget continues to increase economic development spending.
Dozens of bills to expand existing economic development programs and create new ones have been introduced during the legislative session, and additional bills are likely as the Legislature begins the second half of the session. The Citizens Budget Commission (CBC) will track these efforts in an Economic Development Scorecard (for full scorecard and download link, click here). The Scorecard currently includes 61 bills, of which 21 would expand existing programs, 20 would create broad new programs, and 20 would create targeted programs. Only eight bills contain an estimate of fiscal impact; while these estimates do not use the same methodology or time period, the total annual cost is $564 million.
This year’s budget made some progress toward increasing transparency, with movement on two of the five recommendations in CBC’s Blueprint for Economic Development Reform: a database of deals and administrative reforms to contracting.
The book of policy proposals accompanying Governor Cuomo’s State of the State address included a proposal to direct Empire State Development (ESD) to build a searchable online database for economic development projects that would streamline existing reports into an interactive, user-friendly tool. The Adopted Budget included a $500,000 appropriation for the database; however, it does not specify what information must be included, what functionality the database should have, or how often it must be updated.
The database of economic development deals should include all categories of initiatives, including direct subsidies, tax expenditures, spending by State authorities, and power discounts provided by the New York Power Authority. Database users should be able to be search, sort, and download the data in a machine-readable format. The database should report the funds and tax benefits committed and disbursed to each recipient, as well as standardized, comprehensive metrics that track projects’ annual progress. With these elements included, the database could be used to track, evaluate, and compare economic development investments to guide the State’s strategy going forward.
The Governor also announced an agreement to restore the State Comptroller’s (OSC) authority to approve some contracts entered into by the State University of New York (SUNY) Construction Fund, City University of New York (CUNY) Construction Fund, SUNY Research Foundation, and the Office of General Services. This was not included in the legislation accompanying the Adopted Budget but is expected to move forward subject to ongoing agreement between the parties.
Together these reforms can improve economic development transparency and accountability, but how they are implemented will determine whether they are effective tools. Before expanding current programs or creating new ones, State leaders should strengthen and codify the specifics of these reforms as described and fully implement the remaining recommendations in the Blueprint for Economic Development Reform—specifically by creating a unified economic development budget, standardizing metrics across all programs, and requiring that all benefits be pay-for-performance.
Download Scorecard2019 Economic Development Scorecard
- New York State Office of the Governor, “2019 Justice Agenda: The Time is Now” (January 15, 2019), pp. 250-251, www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/2019StateoftheStateBook.pdf.
- New York State Legislature, A2000D/S1500D (2019).
- The Excelsior Jobs Program provides a good model of reporting that includes recipients’ commitments, incentives issued, and actual performance. For a list of recommended metrics, see: Riley Edwards, A Blueprint for Economic Development Reform (Citizens Budget Commission, March 2017), https://cbcny.org/research/blueprint-economic-development-reform.
- New York State Office of the Governor, “2019 Justice Agenda: The Time is Now” (January 15, 2019), pp. 249-250, www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/2019StateoftheStateBook.pdf.