FINANCE

NEW YORK STATE SENATE FINANCE COMMITTEE — The state's top economic development officials defended Governor Hochul's 2023-2024 budget proposals during a joint legislative hearing Thursday, highlighting major initiatives including a $100 billion Micron semiconductor facility deal and historic investments in arts and culture funding. Commissioner Hope Knight of Empire State Development told lawmakers that the state has supported more than 50,000 small businesses over the past two years and expects the Micron project in Central New York to create nearly 50,000 jobs statewide, including 9,000 positions with average salaries exceeding $100,000. She also announced the launch of the Office of Strategic Workforce Development, which has already awarded funding to train 3,000 individuals through partnerships with more than 100 businesses. But Sen. Sean Ryan, chair of the Senate Committee on Commerce, Economic Development and Small Business, pressed Knight on transparency issues, noting that the state's Database of Economic Incentives—created to track where economic development money goes—remains difficult to navigate despite recent improvements. "It's a little clunky," Ryan said, noting the database contains 3,200 different incentives with some columns entirely blank. Knight acknowledged the database is "an iterative process" and promised continued refinements. Ryan also questioned the status of a mandated economic impact study of state tax credits and incentives. Knight said the Department of Tax & Finance has hired an outside firm to conduct the analysis and expects to deliver the report by January 1, 2024. Commissioner Jeanette Moy of the Office of General Services outlined a $1.3 billion budget proposal that includes implementation of e-procurement systems—making New York the last large state to adopt such technology—and a $175.5 million infrastructure package for the Empire State Plaza. Moy noted that OGS manages 20 million square feet of state property and processes over $12.6 billion in invoices annually for 66 executive agencies. Mara Manus, executive director of the New York State Council on the Arts, highlighted the sector's economic impact, noting that New York's creative economy contributes $126 billion annually and comprises over 435,000 workers. She reported that NYSCA awarded over 3,600 grants totaling nearly $98 million in fiscal year 2023, with an 80 percent increase in applications compared to 2021. Capital projects funded by NYSCA are projected to generate $36 million annually for the Buffalo AKG campus redesign alone and attract nearly 200,000 visitors. The hearing was the fourth of 13 joint fiscal committee hearings on the Governor's proposed budget. New York State's economic development agency faced tough questioning from lawmakers on Wednesday over workforce coordination, business competitiveness, and arts funding as it defended Governor Hochul's 2023-2024 budget proposal. At a joint Senate-Assembly hearing on the executive budget, Empire State Development Commissioner Hope Knight touted new workforce training initiatives serving 3,000 trainees across 100 businesses, primarily in advanced manufacturing. However, Sen. Ryan expressed skepticism about the state's ability to manage 500 separate workforce development programs scattered across departments, calling for ESD to serve as a coordinating authority to ensure effectiveness. Sen. Murray launched a pointed attack on the state's handling of unemployment insurance debt, criticizing the decision not to take advantage of a federal interest-free repayment window. "We made a conscious decision to hammer every single New York State business," Murray said, noting the state paid $162 million in interest last year and faces potential total costs of $750 million over a decade. She questioned how the state can attract major employers like Micron when businesses face a $27.60-per-employee surcharge. Assemblyman Bronson pressed Knight on the Office of Workforce Development's selection criteria for nonprofit training partners and business participants, while also expressing disappointment that the FAST NY shovel-ready program received only $200 million instead of the $500 million he sought. Knight acknowledged over $100 million in FAST NY awards have been provided but could not immediately provide exact figures or geographic breakdowns. The hearing also revealed tension over the START-UP NY program, which ESD proposes to rebrand as EPIC and extend for five years. Knight cited $68 million in state investment generating 3,000 jobs and $1.3 billion in economic activity, but Bronson and Sen. Murray expressed reservations about the program's equity implications. Assemblyman Stirpe criticized proposed cuts to Centers of Excellence programs, which he noted have a 24-to-1 return on investment, while the state continues funding START-UP NY. He highlighted the Center of Excellence for Healthy Water's work on PFAS and algal bloom solutions, questioning why funding would drop from $1 million to $375,000. On the arts, Director Gerrard Manus of the New York State Council on the Arts reported 507 grants to small organizations and 300 new grantees this year, but acknowledged slow disbursement of a $10 million legislative add for upstate arts organizations. Assemblyman O'Donnell called the arts budget "criminal" and the lowest since the 1960s, warning that without adequate funding for nonprofit theaters, Broadway's pipeline of new talent will dry up. He pledged not to support tax credits unless the arts budget is restored. The hearing underscored ongoing tensions between upstate and downstate funding priorities, business competitiveness concerns, and questions about whether economic development investments are achieving stated goals of equity and inclusion. NEW YORK STATE LEGISLATORS GRILL ECONOMIC DEVELOPMENT OFFICIALS ON ARTS FUNDING CUTS, ENERGY POLICY IMPACTS, AND PROJECT TRANSPARENCY State lawmakers sharply questioned economic development officials on February 9 over proposed budget cuts to arts funding, the impact of climate policy on manufacturing, and the transparency of major economic development deals during a joint legislative hearing on the 2023-2024 Executive Budget. The most contentious exchange centered on arts funding. The New York State Council on the Arts faces a dramatic reduction from $85 million in pandemic relief funding to a baseline of $41 million, even as applications increased 25 percent last year. NYSCA Executive Director Mara Manus acknowledged the agency currently funds only about 70 percent of applications and could not explain how it would expand access to underserved communities while facing the proposed cut. Sen. Luis Serrano (D) argued the baseline should have been higher "20 years ago" and questioned the agency's ability to fulfill its stated goals. Senators also challenged Empire State Development Commissioner Hope Knight on the state's aggressive climate policy. Sen. George Borrello (R) warned that the state's conversion to all-electric energy will drive out major manufacturers like Corning Glass and prevent new industrial investment, particularly in Western New York. He criticized the proposed "cap and invest" program as a "Hunger Games" that will benefit large corporations while forcing small manufacturers to relocate to Pennsylvania. Knight defended the policy, noting ESD will advocate for allowances for energy-intensive businesses, but offered no concrete solutions for industries requiring natural gas. Sen. John Liu (D) pressed Knight on the transparency of ESD's economic development database, noting that major projects like Tesla and the newly announced Micron semiconductor facility were not searchable in the public database. Knight acknowledged Tesla funding went through a nonprofit intermediary (Fuller Road) rather than directly to the company, and that Micron has not yet commenced. Liu called for the database to include company names and project references so the public understands state economic development deals. Sen. James Walczyk (R) criticized a stark disparity in state priorities: the Governor is increasing film and television incentives by $280 million (from $420 million to $700 million) while cutting tourism matching grants from $5 million to $2.45 million. He argued local tourism generates significant sales and bed tax revenue across rural New York and deserves comparable investment. On broadband, Sen. Michelle Hinchey (D) pressed for faster deployment of the $1.5 billion ConnectALL initiative, noting the state has allocated $300 million in state funds but federal money has not yet begun flowing. She emphasized the urgency of addressing cell service gaps in rural areas and advocated for prioritizing last-mile broadband buildout. Assemblyman Friend raised concerns about the Buffalo Billion legacy, noting that much equipment purchased for the original tenant remains unused or was resold. He urged the state to make that equipment available to support Micron's expansion in the region. The hearing revealed tensions between the administration's climate and film industry priorities and legislators' concerns about manufacturing competitiveness, rural broadband access, and the pace of federal infrastructure funding deployment. NEW YORK STATE SENATE FINANCE COMMITTEE — Empire State Development Commissioner Hope Knight faced pointed questioning from legislators on February 9 about the elimination of the Restore NY program and the state's economic development strategy during a joint legislative hearing on the 2023-2024 executive budget. Sen. Tom O'Mara (R) and Assemblyman McDonald expressed concern that Restore NY, which has helped communities rehabilitate vacant and blighted properties, was not reappropriated despite less than half of previous funding being spent. Commissioner Knight said the department is still working through existing allocations and accepting applications, but acknowledged the program has been important for communities. Chair Liz Krueger (D) conducted extensive questioning on transparency and accountability, requesting a comprehensive spreadsheet of all ESD deals, their status, and subsidy amounts. She also pressed Knight on the Micron semiconductor facility deal, which the Governor has touted as bringing 50,000 jobs. Knight clarified that figure includes 9,000 direct Micron jobs, construction workers, and supply chain employees, with a 3-to-1 ratio of supply chain to direct employment. Krueger expressed concern that Micron's stock is plummeting and the company is laying off 10 percent of its workforce, but Knight said the semiconductor industry is cyclical and the project remains on track to begin construction in 2024 and operations in 2026. Knight also defended the expansion of film and television tax credits, citing intense competition from neighboring states. She noted New Jersey has seen 300 percent more productions while New York has declined 25 percent over two years. The budget proposes capping above-the-line compensation at $500,000 per role—a first for the state—to compete with states offering uncapped credits. OGS Commissioner RuthAnne Visnauskas reported progress on electrification and sustainability, noting that replacing a steam-driven chiller with an electric one at Empire State Plaza reduced emissions by 18 percent. She outlined plans to transition 18,000 state vehicles to electric by 2035 and said OGS has exceeded the Governor's 30 percent MWBE vendor target, currently at 43 percent with over $1.17 billion in contracts awarded. NYSCA Executive Director Mara Manus reported the agency funded 79 percent of demand in the previous year and expressed concern about the elimination of $40 million in capital funding for small and mid-sized arts organizations, noting 82 percent of grantees have budgets under $3 million. Sen. Serrano questioned the impact of eliminating capital grants during a period of continued pandemic-related facility needs. Assemblywoman Jackson raised concerns about racial and ethnic disparities in job growth and workforce development, asking for demographic breakdowns of employment gains and questioning whether workforce development sites are geographically aligned with job opportunities. NEW YORK STATE LEGISLATURE — Economic development officials faced pointed questions about program effectiveness and equity during a joint Senate-Assembly budget hearing on Thursday, with lawmakers expressing skepticism about the state's sprawling network of tax incentives and development agencies. Sen. Sean Ryan delivered a sharp critique of Industrial Development Agencies, citing reports showing that the 107 IDAs across New York distribute roughly $1.8 billion annually but often fail to deliver promised results. He highlighted cases where IDAs subsidized companies that would have relocated anyway—including $150 million to Amazon by Gates, $70 million by Clay, and $18 million by East Fishkill—and questioned whether taxpayer dollars should support fast-food chains and gyms. "Do we need to rein in the IDAs?" Ryan asked. "Are we happy with them subsidizing A&W Root Beer, the Moe's, fast-food places, and Gold's Gym?" Ryan Silva, executive director of the New York State Economic Development Council, defended IDAs, citing data showing they created 175,000 net new jobs in 2020—the pandemic year when the state lost over 1 million jobs overall. He argued IDAs remain "the best local economic development tool we have in our community for retaining and creating jobs." Commissioner Hope Knight of Empire State Development outlined the executive budget's economic development proposals, including $40 million for semiconductor expansion and a Small Business Innovation Research matching grant program offering $10,000 to $50,000 per award. She reported that 1 million households have enrolled in a federal broadband affordability program providing $30 monthly subsidies, and said the state expects federal ConnectALL funding by year-end 2023. Assemblywoman Letitia Lucas raised concerns about equity, noting that over 200,000 Black families have left New York City and that Black student enrollment in city schools has dropped to 23 percent. She pressed officials for demographic breakdowns of who benefits from economic development programs, saying marginalized communities lack a voice in decisions affecting their lives. Ross Frommer, representing Columbia University and the Associated Medical Schools of New York, testified that the NYFIRST program—which attracts top research talent—has generated a four-to-one return on investment and created 183 jobs. He urged continued funding, noting that other states like California and Texas are investing billions in similar programs. The hearing also addressed workforce development, broadband expansion, electric school buses, and the disposition of state-owned properties. Multiple legislators requested follow-up data on program performance and demographic outcomes. NEW YORK STATE SENATE FINANCE COMMITTEE — A joint legislative hearing on the 2023-2024 executive budget on economic development revealed sharp divisions over whether New York should continue investing billions in business tax incentives or redirect resources to public goods like education and childcare. The hearing, held Feb. 9, featured testimony from economic development officials defending tax credits and industrial development agencies, and advocates arguing the programs are ineffective and drain school funding. Ryan Silva, director of the New York State Economic Development Council, defended the film industry tax credit expansion, stating the industry creates and retains 57,000 union jobs in New York City. He cited Empire State Development's claim of a 9-to-one return on investment for film tax dollars, though acknowledged an Empire Center report found taxpayers spend over $40,000 per job created. Sen. Walczyk, R-Utica, pressed Silva on the discrepancy, questioning whether the Governor's additional $280 million investment—bringing total film tax credits to $700 million—would expand jobs beyond the current 57,000. Silva deferred to a later panel for specifics. Sen. Borrello, R-Gowanda, challenged Silva on the state's Climate Leadership and Community Protection Act, arguing that eliminating natural gas will make New York uncompetitive and push manufacturers to Pennsylvania. Silva acknowledged the concern but said carveouts in the CLCPA scoping plan would protect manufacturers needing natural gas access. Opposing the subsidy approach, Ron Deutsch of New Yorkers for Fiscal Fairness called for freezing all new tax incentives pending results of an ongoing study. He cited a Good Jobs First report released the day before showing industrial development agencies cost schools nearly $2 billion annually in lost revenue. Deutsch and other advocates argued New York should instead invest in SUNY and CUNY, which they said generate an $8 return for every dollar invested and retain 78-79 percent of graduates in the state. Elizabeth Marcello of Reinvent Albany noted the Governor's budget cuts community college funding upstate by 8.8 percent while raising film tax credits by 55 percent. Michael Kink of the Strong Economy for All Coalition cited Federal Reserve Bank of Minneapolis research showing public program investments yield 12-to-one returns in low-income communities, compared to business subsidies that he said lose money. Sen. Ryan, D-Buffalo, appeared persuaded by the advocates' arguments, noting the contrast between $1 billion spent on economic development that hasn't produced the nation's strongest economy, versus SUNY/CUNY investments with documented high returns. Sen. O'Mara, R-Big Flats, defended IDAs as essential for rural regions like the Southern Tier, where state-level funding decisions often ignore regional council recommendations. He said local IDAs provide the only incentive mechanisms available when state programs don't fund projects. The hearing underscored a fundamental debate over economic development philosophy: whether subsidizing private business or investing in public infrastructure and education produces better returns for taxpayers. A joint legislative hearing on the 2023-2024 executive budget's economic development proposals revealed sharp divisions over the state's approach to business incentives, with critics arguing that traditional tax credits and subsidies have failed to produce results while supporters defended targeted investments in specific industries. Three economic development advocates testified that New York's strategy of providing billions in business subsidies to cities like Buffalo, Rochester, and Syracuse has not reduced poverty or created sustainable jobs. "The approach we have now is just a failed approach," said one testifier, who advocated instead for expanding earned income tax credits and child tax credits that directly benefit low-income families. Another witness argued that government spending should increase by approximately $70 billion annually—matching Canada's spending level as a percentage of GDP—to fund transformative investments in housing, healthcare, and community development. The hearing's most contentious exchange centered on a proposed $455 million state loan for Belmont Park's redevelopment. John Scheib of Scheib Associates opposed the loan, citing the horse racing industry's declining attendance (down 88% at Belmont since 1978), minimal tax revenue from wagering, and animal welfare concerns. He noted that New York's 11 tracks combined pay only $10 million annually in wagering taxes—the same amount paid 80 years ago with only five tracks. David O'Rourke, CEO of the New York Racing Association, countered that the redevelopment would generate $1 billion in construction-related economic activity, create 3,700 jobs, and produce $155 million in annual economic impact after completion. He emphasized that NYRA would repay the loan with interest and that the project would free up over 100 acres at Aqueduct valued at $1 billion for other development. Sen. Liz Krueger, the Senate chair, pressed O'Rourke on how NYRA would repay the loan if the state terminated its franchise early, and questioned whether other states' track redevelopments had actually increased racing revenues. Sen. John Walczyk challenged testifiers on government spending levels, expressing skepticism about spending comparable to Canada's. Sen. Todd Murray sought a middle ground, agreeing that large corporate subsidies should end but arguing that incentives could be refocused on smaller businesses and childcare. The hearing also included testimony supporting the Empire State Film Post Production Tax Credit, with representatives of the Motion Picture Editors Guild reporting that the sector now directly employs 14,000 people and generates $7.24 billion in economic output annually—up from minimal activity a decade ago. Post-production workers earn an average of $119,000, significantly above the statewide average. Museum Hue's executive director requested a new $100 million funding model over five years to support over 500 arts organizations serving communities of color, which she said have been disproportionately underfunded. She cited data showing the arts sector generates over $100 billion in economic activity and supports 400,000 jobs statewide. NEW YORK — Film production labor unions and regional economic development officials urged the New York State Legislature on Thursday to support Governor Hochul's proposed expansion of the state's film and television tax credit program, warning that competing states like Georgia and New Jersey are luring productions away with more generous incentives. Testifying before the Joint Legislative Committee on Finance, Deirdra Elizabeth Govan, vice president of United Scenic Artists Local 829, said the tax credit has transformed New York into a national production hub, supporting 57,000 direct and indirect workers earning $12 billion annually. However, she warned that sound stages in New York are experiencing significant vacancy rates for the first time in years as productions migrate to other states. Tim Clark, film commissioner for Western New York and immediate past chair of the Association of Film Commissioners International, described a dramatic transformation in Buffalo, where IATSE union membership grew from about a dozen members to nearly 200 since the tax credit's implementation. He noted that movies once set in Buffalo were filmed in Winnipeg and Toronto, but now the city doubles for Los Angeles, Hartford, and other locations. However, the testimony revealed significant legislative divisions over the Governor's proposal to expand credits to above-the-line talent—directors, producers, and actors earning up to $500,000. Chairwoman Liz Krueger expressed skepticism, arguing that famous actors living in New York would be hired anyway and questioning why taxpayers should subsidize an already-successful industry. "I just don't see why we should actually be giving up our tax revenues for, with all respect, them," she said. Senator Walczyk raised concerns about budget priorities, noting the Governor's proposal includes a $2.5 million cut to local tourism matching grants while increasing film credits by $280 million to a total of $700 million. He suggested the industry could function adequately with $697.5 million. Govan also highlighted a critical operational problem: productions wait one to three years after completion to claim tax credits, and the $430 million annual allocation is exhausted and rolls over into subsequent years, never catching up. This delay, she testified, is driving productions to other states. The hearing, held February 9, 2023, examined the 2023-2024 executive budget's economic development provisions.