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Business must earn subsidies, Cuomo aide says
Crains New York
Shane Dixon Kavanaugh

September 14, 2011
View the Original Article

The state is moving away from awarding grants and tax breaks to companies before they deliver on their job-growth promises, Empire State Development Corp. President Kenneth Adams says.

The Cuomo administration's top economic development official on Wednesday said future state subsidies will only go to businesses after they create jobs and rejected suggestions that bureaucracy has been added to the state's grant programs.

Empire State Development Corp. President Kenneth Adams acknowledged that the state's economy has withered over the years, despite billions in tax breaks and subsidies, some of which went to projects that did not meet expectations. He says the administration's new approach could buck that trend.

“The tide is not irreversible,” Mr. Adams said at a Crain's breakfast forum in midtown. “Job-loss trends—it's old news.”

Mr. Adams was referring to a study released Tuesday by the Citizens Budget Commission, which showed New York shed more than 130,000 jobs since 2000 while spending nearly $6.6 billion a year to lure business to the state.

The watchdog group advised the 10 regional economic development councils—unveiled by the governor earlier this summer—to streamline jobs programs, implement metrics to enforce accountability and make subsidies performance-based.

That's precisely what the unpaid councils will do, Mr. Adams countered.

Each council will submit development proposals to the state that focus on its region's economic assets, such as tourism, higher education or green technology. The proposals must have accountability standards, and subsidies will not be awarded to a region until the projects meet their obligations. Meanwhile, Mr. Adams' agency has pooled $1 billion from the budgets of various authorities and departments.

“It's taking the old bureaucracy and turning it on its head,” Mr. Adams said, though he acknowledged that some businesses are still receiving benefits from the discontinued and discredited Empire Zones program.

Local officials remain optimistic that the governor's councils will succeed and not interfere with the city's own plans.

“Our hope is that the regional council will develop a plan that supports our priorities,” said Seth Pinksy, president of the New York Economic Development Corp.