By Mary Anna Towler
August 2, 2011
You can't exaggerate the seriousness of the Paetec sale and its threat to downtown Rochester. And so Governor Cuomo's focus on the state's economy comes at a crucial time.
But you don't have to be as cynical as I am to be pessimistic about Cuomo's plan for New York State. His first step: 10 high-powered, regional economic development councils, plus one for New York City. In November, they'll submit plans to boost their economy, and they'll compete for state funds to carry out those plans.
I'm still reeling from the Paetec announcement, and I'm desperate to be proved wrong. I'll be surprised, though, if the councils come up with the initiatives - and the reforms - that we need.
For starters, look at who's on the councils.... Every one of the 11 councils, the overwhelming majority of the members are representatives of business - most often big business - and existing development groups. It would be ridiculous not to have business leaders on these councils, but business leaders will look out for their best interests. And while those interests may help their own companies, they aren't always what will grow the economy.
I'll be writing more about this as the councils start working, but let me start with "Seizing the Moment," a report from a statewide coalition called Align - the Alliance for a Greater New York - which spells out the problems with the way New Yorkers have approached economic development.
"To date," says the report, "New York's main job creation strategy has largely consisted of the use of tax subsidy programs - and to a lesser degree, direct capital grants and loans - to incentivize private sector economic activity in localities across the state. To help offset the cost of opening new facilities, expand existing ones, or keep businesses from leaving New York, a sprawling and haphazard web of economic development entities regularly award tax credits, exemptions, abatements, and other kinds of favorable financing to private businesses in exchange for job creation, capital investment, and other economic benefits."
The state's main economic development body is a public authority, the Empire State Development Corporation. Within ESDC, notes the report, "there are as many as 202 subsidiaries that operate as independent entities with a board, president, and staff, each associated with a large-scale development project."
In addition, about 20 other state agencies are involved in economic development and, at the local level: "over 500 local development corporations, 114 Industrial Development Agencies, 82 Empire Zones Boards, 114 Business Improvement Districts, 49 Urban Renewal and Community Development Agencies," and 10 regional ESDC offices.
"There is very little coordination among programs and no overall vision for regional and state economies to guide investment decisions," says the report. And individual municipalities and regions end up competing with one other, "trying to outdo each other's benefit packages to attract businesses."
"This harmful race to the bottom," says the report, "results in jobs being shifted from town to town instead of new jobs being created in the state - at a substantial cost to taxpayers."
"The establishment of Regional Economic Development Councils is a pivotal opportunity to address the failures of our current economic development tools," says the report. But will we take advantage of this opportunity? Will the business-heavy councils be willing to call for an end to multiple, competing local agencies within their region? Will they urge ending the tax subsidies for moving a business from one part of the region - one part of the state - to another? Or will they ignore those problems and just come up with flashy proposals for new programs and new state funds?...
To read the full article visit the Rochester City Newspaper.