FINANCE

NEW YORK STATE SENATE FINANCE COMMITTEE — State economic development officials testified before a joint legislative committee on Jan. 30 that Governor Hochul's 2024-2025 budget would advance workforce development, semiconductor manufacturing, and arts funding across New York. Hope Knight, commissioner of Empire State Development, highlighted the state's achievement of 32 percent minority- and women-owned business utilization on state contracts—the highest in the nation for three consecutive years. She announced a $100 million investment in the FAST NY program to create shovel-ready sites for incoming businesses and detailed the ON-RAMP initiative, a new workforce development program targeting advanced manufacturing training for disadvantaged populations. Knight also touted recent major investments, including a new EUV lithography tool at the Albany NanoTech Complex and Tesla's $500 million supercomputer announcement in Buffalo, positioning New York as a leader in semiconductor and artificial intelligence development. Jeanette Moy, commissioner of the Office of General Services, outlined the agency's management of 20 million square feet of state property and administration of $30 billion in centralized contracts. She detailed climate initiatives including plans to convert the state's light-duty vehicle fleet to zero-emission vehicles by 2035 and a decarbonization plan for the Empire State Plaza targeting 50 percent carbon reduction within 10 years. Erika Mallin, newly appointed executive director of the New York State Council on the Arts, emphasized the sector's economic impact, citing $144 billion in annual contributions to the state and 450,000 jobs. She noted that NYSCA has awarded $81 million in grants to date for fiscal year 2024, with 50 percent of grantees operating on budgets under $500,000. Sen. Sean M. Ryan, chair of the Senate Committee on Commerce, Economic Development and Small Business, pressed Knight on transparency in the state's Database of Deals, noting that disclosure of layered Industrial Development Agency subsidies remained incomplete. He referenced an independent audit of all economic development programs scheduled for release the following day and asked how the state would measure success of major investments like the nearly $1 billion commitment to SUNY Albany. The hearing, held in Hearing Room B of the Legislative Office Building in Albany, included testimony from multiple state agency officials and was livestreamed to the public. New York State economic development officials faced tough questioning from lawmakers on Wednesday over the specifics and accountability of major budget initiatives, including a $1 billion semiconductor investment, a new artificial intelligence consortium, and broadband expansion programs. At a joint legislative hearing on the 2024-2025 executive budget, Empire State Development Commissioner Hope Knight and COO Kevin Younis outlined plans to leverage the state's $1 billion semiconductor investment with $9 billion in partner commitments and up to $12 billion in federal CHIPS Act funding. Younis projected 700 directly committed jobs paying well above average, with a multiplier effect creating roughly five indirect jobs for each direct position. The semiconductor industry generates approximately $16 in leveraged spending per dollar invested, he said. But lawmakers pressed for accountability. Sen. Ryan asked whether partner commitments were contractually binding—Younis acknowledged contracts were still being finalized—and demanded regular reporting on actual job creation. "When that money leaves ESD and goes somewhere else, then ESD says we don't really know what happened," Ryan said, expressing frustration about tracking funding across agencies. The Empire AI Consortium drew skepticism from Sen. Kristen Gonzalez, who questioned whether the state should invest $275 million in artificial intelligence tools without clear ethical frameworks or specific use cases. She noted that generative AI is "inherently imperfect" and incorporates bias, and suggested the state coordinate with a larger federal AI research program rather than duplicating efforts. Assemblyman Steve Stirpe, chair of Economic Development, expressed frustration with what he called an annual "dance" where successful programs like Centers of Excellence and CATs—which show a 24-to-1 return on investment—are cut and then restored. "If I were in the private sector and had something that was wildly successful, I probably would increase the funding," he said. On housing, Knight said the NY-RUSH program aims to develop 15,000 units on state-owned sites, with funding shared across multiple agencies. Assemblywoman Woerner questioned whether the new $4 million Global Entrepreneur program should be prioritized over expanding existing support for minority and women-owned businesses, which receive a disproportionately small share of venture capital. Knight also reported that nearly all of the first round of FAST NY funding—about $249 million—has been spent, and that the state is working to draw down federal ConnectALL broadband funding, which should begin in 2025. About 1.6 million New York households are currently using the federal Affordable Connectivity Program, which provides $50 million monthly in subsidies, but that program faces funding challenges. On arts funding, NYSCA Executive Director Erika Mallin faced questions from Sen. Luis Serrano about why operating grant funding has returned to pre-pandemic levels after years of stagnation at $40-42 million annually. Mallin committed to strategic deployment of available resources but acknowledged the challenge of supporting arts organizations facing increased costs. NEW YORK STATE SENATE FINANCE COMMITTEE — The state's economic development agency faced tough questioning on contractor vetting, broadband funding allocation, and failed major projects during a joint legislative hearing on the 2024-2025 Executive Budget on Tuesday. Sen. Ramos pressed Empire State Development Commissioner Knight on whether the agency consults the Department of Labor debarment list when awarding contracts, specifically referencing Tesla's history of health and safety violations and harassment allegations. Commissioner Knight said the agency ensures contractor compliance with state and federal laws but acknowledged she would need to confirm whether ESD specifically consults the DOL debarment list. Sen. Tedisco challenged the ConnectALL broadband program's use of "preference" language for underserved communities, arguing that 100 percent of the $1 billion to $1.5 billion in funding should go exclusively to unserved areas where over 100,000 homeowners lack broadband access. Commissioner Knight defended the program's approach to leveraging existing municipal infrastructure but did not commit to the senator's demand. Sen. Liu questioned whether the state has clawed back funding from Tesla for the Western New York project, noting that Tesla met its contractual commitments. He also pressed for details on the Micron semiconductor project, which will receive approximately $5 billion in state green chip tax credits. ESD officials said Micron is eligible for a minimum $3 billion federal grant but acknowledged they do not know the final federal commitment amount, despite the project being justified on federal leverage. Assemblyman O'Donnell, in his final arts budget hearing after 22 years, criticized the Governor's pattern of cutting arts funding while claiming to support the arts. He cited the Adirondack Theatre Festival in Glens Falls as an example of how arts investment drives economic development and tourism, and called for restoration of the Arts Stabilization program, which the current budget proposal zeros out. Assemblyman Ra raised concerns about proposing a five-year MWBE extension before the required disparity study is completed in August. Commissioner Knight said the Governor wants a simple extension with no modifications to allow the program to continue growing. The hearing also addressed workforce development, childcare support, and state recruitment challenges, with multiple legislators noting difficulty connecting job seekers to available positions across state agencies. NEW YORK — State economic development officials faced sharp questioning from lawmakers on Tuesday over housing policy, manufacturing job losses, and the state's approach to evaluating grant awards and tax incentives during a joint legislative hearing on the 2024-2025 executive budget. Commissioner Katherine Knight of the Empire State Development Corporation defended the Governor's $250 million annual allocation for two years to convert state property into housing, but acknowledged that specific sites have not been fully identified and that projects would be evaluated on a case-by-case basis. When pressed by Chairwoman Liz Krueger on whether affordable housing would be mandated on state-owned land, Knight said the state would "create as much as possible" but that it "depends on the specific project and transaction." The Atlantic Yards project drew intense scrutiny from multiple lawmakers. Assemblyman Simone Carroll and others noted that zero of the required 871 affordable housing units have been built, with a 2025 deadline looming. Knight said the state is awaiting an auction scheduled for next month to find a new developer to replace Greenland, which has defaulted on its debt. She suggested Greenland could potentially meet its obligations by converting existing market-rate units to affordable housing, but acknowledged that platform construction over MTA rail yards would take "a couple of years," effectively guaranteeing a default on the 2025 deadline. Senator Daphne Jordan raised concerns about manufacturing companies leaving New York for lower-tax states, citing recent departures by Quad/Graphics from Saratoga, Essity bath tissue operations, and Lehigh Cement. Knight countered that New York was named the number-one state for reshoring by the Reshoring Institute, though she acknowledged some companies are choosing to exit. Senator Alessandra Biaggi challenged the conventional metrics for measuring economic development success, arguing that job creation numbers mask a deeper problem: thousands of open positions exist in New York, and incentivized companies like Micron will poach skilled workers from existing employers rather than attract new residents. He urged the state to focus on workforce training and modernization of existing industries. Senator James Skoufis questioned the AI Consortium funding structure, noting that the state is contributing $250 million while universities with combined endowments exceeding $31 billion are contributing only $125 million. He questioned why the state should be contributing twice as much as universities with "excessive endowments" at a time when the state faces a projected $20 billion budget deficit over two years. Senator Comrie pressed for data on minority business enterprise participation in procurement and services, and advocated for captive insurance solutions for downstate commercial vehicle operators, noting that most commercial vehicles in the state are illegal due to insurance costs exceeding $60,000 annually. OGS Commissioner Moy defended the state's $15 million payment to the federal government for use of Floyd Bennett Field to house migrants, saying it was part of negotiations with federal authorities and that services are being provided. The hearing, held January 30, revealed significant disagreement between the administration and lawmakers over housing strategy, manufacturing competitiveness, and how the state should evaluate the return on investment from economic development spending. New York State officials faced pointed questions about economic development spending and business climate during a joint legislative budget hearing Tuesday, with lawmakers expressing frustration over arts funding cuts, broadband service quality, and persistent unemployment insurance debt. The hearing on the 2024-2025 executive budget revealed significant tensions between the state's economic development ambitions and implementation challenges. Empire State Development Commissioner Knight outlined major initiatives including a $228 million broadband expansion program (ConnectALL) and housing investments through the RUSH-NY program, but faced skepticism from multiple lawmakers about execution and equity. Assemblyman Vanel raised concerns about broadband quality, noting that the federal Affordable Connectivity Program averaged under 50 megabits per second—below the state's own 100 Mbps threshold for "underserved" areas. He also highlighted data plan affordability issues, with average costs exceeding $100 monthly. Assemblywoman Sillitti questioned funding disparities, noting Long Island receives only 3.5% of arts council funding despite representing nearly 15% of the state's population. Senator Ryan warned that New York's noncompete restrictions could undermine high-tech investment, citing Federal Reserve research showing Minnesota's success after banning such agreements. Assemblyman Lemondes cited damning business rankings—49th in tax climate, F grade for small business friendliness—and highlighted the closure of Remington Arms, an iconic 1816-founded manufacturer losing its last 207 jobs. Assemblywoman Walsh pressed Commissioner Knight on the state's $7.3 billion unemployment insurance debt, questioning why New York didn't use federal pandemic relief funds like 31 other states. The state passed a $160 million interest surcharge to employers in 2022. Multiple lawmakers expressed concern about community engagement on major projects, particularly after learning about the Creedmoor RUSH housing proposal via social media. Commissioner Knight committed to working with local officials through the General Project Plan process. Executive Director Mallin acknowledged arts sector impact—Western New York nonprofits generated $380 million in economic activity and 8,000 jobs—but faced criticism for proposed funding cuts that lawmakers said contradicted stated priorities. NEW YORK STATE SENATE FINANCE COMMITTEE HEARS TESTIMONY ON ARTS, BIOMEDICAL RESEARCH, AND ECONOMIC DEVELOPMENT ACCOUNTABILITY Albany — The New York State Senate Finance Committee held a joint hearing on the 2024-2025 Executive Budget on Economic Development on Tuesday, hearing testimony from arts organizations, medical schools, and economic development advocates about the state's approach to fostering growth and innovation. Arts organizations testified that state funding generates substantial economic returns. The Dia Art Foundation reported that its Beacon museum alone brings in $8 million annually in regional tourism and has helped transform the post-industrial Hudson Valley community. ArtsNYS presented data showing that Western New York's nonprofit arts sector generates $381 million in economic activity and supports 8,221 jobs, while the Greater Syracuse area's 47 arts organizations reported $148 million in economic activity supporting nearly 6,000 jobs. ArtsWestchester noted that a $1 million state appropriation in 2023 allowed it to award $550,000 in grants to 100 organizations and 64 individual artists—a dramatic increase from $105,000 awarded to 45 organizations in 2018. Chairwoman Liz Krueger emphasized that arts should be recognized as direct economic development, noting the data shows strong correlation between arts investment and local economic activity. Biomedical research advocates argued for increased state investment in talent recruitment. Ross Frommer of Columbia University Irving Medical Center testified that the NYFIRST program, which provides funds to medical schools to recruit top scientists, has generated a four-to-one return on investment despite receiving only $9 million to date. He cited examples of NYFIRST recruits who have filed multiple patents and created dozens of jobs, and noted that Texas has spent $6 billion and California $8.5 to $9 billion on biomedical research—far exceeding New York's investment. Frommer requested $25 million in additional NYFIRST funding. Dr. John Weston of Lake Erie College of Osteopathic Medicine testified that LECOM's 740 students in New York contribute $22 million annually to local economies and help address the state's physician shortage, particularly in rural areas. He requested $250,000 for a Center of Excellence for Rural Health and Underserved Areas. Sen. Sean Ryan expressed support for both arts and biomedical research funding, noting that arts organizations often show better returns on investment than corporate subsidies and that New York risks losing scientific talent to competing states. However, Charles Khan of the Center for Popular Democracy offered a critical perspective, testifying that New York's $11 billion economic development program lacks transparency and accountability. He cited the $1.8 billion annual loss to school districts through IDA tax abatements and pointed to failed megadeals including Plug Power, Tesla, and the Buffalo Bills stadium deal as evidence that the state needs to pause large deals and implement transparent standards for measuring return on investment before increasing funding. NEW YORK STATE SENATE FINANCE COMMITTEE HEARS SHARP DEBATE OVER ECONOMIC DEVELOPMENT SPENDING, CONSUMER PROTECTION LAWS Albany — A joint legislative hearing on New York's 2024-2025 executive budget revealed deep divisions over the state's economic development strategy, with advocates calling for restrictions on tax abatements to school districts while industry representatives defended the programs as necessary to attract business investment. Ron Deutsch, director of New Yorkers for Fiscal Fairness, testified that New York has an "addiction" to subsidizing billionaires without evidence of return on investment. He cited a Good Jobs First study showing $1.8 billion in school tax losses in 2021 from Industrial Development Agency (IDA) abatements and called for prohibiting IDAs from giving away school district tax revenue. Ryan Silva, representing IDAs, disputed the $1.8 billion figure, arguing it conflates all state tax abatement programs, not just IDAs. He contended that most IDA-supported projects would not occur without assistance and therefore represent net new revenue for school districts. He noted that New York spends $37,000 per student annually and ranks sixth nationally in education, compared to Florida ($9,800, ranked 42nd) and Alabama ($10,000, ranked 46th). Sen. Liz Krueger, the committee chair, signaled skepticism toward IDAs, questioning whether they should be allowed to support housing and asking about compliance with green decarbonization standards. Sen. Andrew Borrello defended PILOTs (Payments in Lieu of Taxes) using concrete examples, arguing that school districts gain revenue when vacant properties are developed, and challenged advocates to explain why sanctuary city spending ($2.4 billion in 2024) receives less scrutiny than economic development programs. The hearing also addressed consumer protection law modernization. Winston Berkman-Breen of the Student Borrower Protection Center testified that New York is one of only eight states without a true UDAP (Unfair, Deceptive, and Abusive Practices) law, and endorsed the Comrie/Weinstein Consumer and Small Business Protection Act as the gold standard. On broadband infrastructure, Michael Santorelli of New York Law School's Advanced Communications Law and Policy Institute warned that ConnectALL's $228 million Municipal Infrastructure Program will waste funding on duplicate broadband networks in already-served areas rather than focusing on the 132,000 households lacking access. Ashley Ranslow of the National Federation of Independent Business testified that small businesses employ 40 percent of the state's private-sector workforce (over 3 million New Yorkers) and urged the Legislature to address the $7.3 billion unemployment insurance debt, which costs businesses over $300 per employee annually in combined state and federal taxes, interest surcharges, and offsets. The hearing, held January 30, 2024, reflected broader tensions in New York's economic policy between those seeking to restrict tax incentives and those arguing they are essential to compete with other states. New York State's $11 billion in economic development spending is poorly designed to help small businesses and has failed to prevent the loss of 17,000 small businesses since 2018, according to testimony before the Senate Finance Committee on January 30. Ashley Ranslow of the National Federation of Independent Business told lawmakers that current programs favor innovation, technology, and life sciences companies while ignoring Main Street businesses that have been paying taxes and creating local jobs for years. "I think any time we can look at how to redirect some of those economic development dollars to those Main Street businesses is a win-win for New York State," Ranslow said. The hearing also examined broadband deployment and wireless infrastructure challenges. Shari Rajamani of the Wireless Industry Association testified that inconsistent local permitting processes across New York are causing carriers to redirect deployment dollars to other states where review processes are faster and more predictable. Michael Santorelli of the Broadband Institute noted that New York has received $20-30 million in federal digital equity funding and is now required to develop a comprehensive statewide digital equity plan—something the state has never had before. Sen. Borrello pressed witnesses on unemployment insurance fraud, citing the Comptroller's estimate of $11 billion in fraud and arguing that the resulting state debt is being paid off by small businesses. Sen. Ryan questioned whether broadband should be regulated like other utilities, noting that exclusive franchise agreements limit market competition in his district. Chairwoman Krueger requested follow-up data comparing New York's small business closure rates to other states across pre-COVID, during COVID, and post-COVID periods.