Citizens Budget Commission Issues Report Challenging Regional Councils to Deliver on Their Promise by Reigning in Our Sprawling Subsidy Programs

The Citizens Budget Commission just released a new report called Avoiding Past Mistakes: Principles for Governing Regional Economic Development Councils. The Report echoes much of what CEJ and its allies in the Getting Our Money’s Worth Coalition have been calling for.

The report begins with an explanation of the new Regional Economic Development Councils and Governor Cuomo’s campaign to open NY for business and lays out the challenge ahead -
Opening New York for business will be a challenge. From 1980 to 2000 the job creation rate in the U.S. was nearly 2.5 times New York’s; employment grew by 45.6 percent nationally and in New York by 19.1 percent. In the most recent decade—2000 to 2010—the trends have deteriorated even further. The U.S. shed 1,967,000 jobs, or 1.5 percent of total employment, and New York shed 131,988 jobs, or 1.6 percent of its total. Almost all of the net job loss was experienced in upstate, which lost 131,346 jobs or 4.6 percent of total employment.

And of course ends with recommendations for how the council can chart a new path forward rather than repeat mistakes of these programs: The new Regional Councils have the potential to improve meaningfully outcomes by streamlining and coordinating all of these efforts, but the danger is that they will instead become new heads on the already huge and unwieldy economic development hydra in New York State. In order to meaningfully improve outcomes the Citizens Budget Commission lays out a few key recommendations that CEJ has been supporting and will continue to fight for through the regional council process and beyond -

1. Consolidate Industrial Development Agencies – have only one per region and place them within the Regional Councils’ purview.
2. Integrate Power Subsidies and Green Jobs Programs - The New York State Power Authority (NYPA) is the largest public authority involved in economic development next to Empire State Development (ESD), which is running the new Regional Councils. NYPA the NYS Energy Research and Development Authority (NYSERDA) should be brought under the umbrella of the regional councils so that grants and awards administered through these programs are done in a fashion that is not scattershot but instead part of a collective, regional plan.
3. Improve Reporting and Implement Standardized Performance Metrics – Because current programs have not been accountable and measuring performance has been difficult at best!
4. Improve Transparency – Current programs do not have a good track record around disclosure and transparency. The Regional Councils will do little to improve things, unless each is required to share common information with the public (not currently the situation – each region is sharing different information and engaging in differing public participation processes). Much of NY’s economic development spending is hidden from view. We can and should steal from best practices in other states and require deal specific disclosure from the Regional Councils and we need a Unified State Economic Development Budget – such a tool helps ensure that tax breaks get as much scrutiny as appropriations (ie –schools, health care etc) during budget negotiations. This helps guard against cutting vital programs rather than curbing subsidy spending that isn’t producing results.

Check out this great Good Jobs First paper which includes good recommendations about unified economic development budgets and deal specific disclosure.