Call it an early Christmas present. Since 2011, New York State has made an annual late-December tradition of announcing millions in grants to businesses, nonprofits, and local governments. The funds are awarded through Regional Economic Development Councils that carve the state into 10 regions, each advised by a board of local civic and business leaders.
On December 18, Gov. Andrew Cuomo announced the eighth round of REDC funding. For 2018, the state awarded more than $763 million to more than 1,000 projects, ranging from the tiny ($6,000 to help the town of Putnam plan for climate change) to the vastly ambitious ($8 million to a Florida glassmaker to help move their manufacturing plant to central New York).
Despite the fanfare, the REDC awards don’t always work out as planned. Getting a grant through the REDC program doesn’t mean a developer or a town government will be handed a check at the ceremony; the state reimburses projects only after the work has been done, which could be years later, or even not at all. But the annual announcement, timed for just before the holidays, always causes a flurry of excitement in the local press as the long lists of projects chosen for awards are revealed.
This year, the Hudson Valley received $87.1 million in awards made to the Mid-Hudson Region; the northern tip of the Valley, located within the Capital Region, shared with Albany and its suburbs in another $67 million. Among the notable local projects:
-$1.831 million for revitalization and promotion of entrepreneurship in downtown Newburgh
-$1 million to the Center for Discovery in Rock Hill, for the development of a new healthcare and research facility for autism and brain disorders
-$800,000 to Bread Alone, to expand its commercial bakery in Lake Katrine
Other local communities got their hearts broken: Saugerties, whose town leaders had hoped for a grant to repair a dilapidated ice rink and build accessible trails in a town park, got left out in the cold this year, the Saugerties Times reports.
Critics Take a Closer Look
Not everybody appreciates the annual show of gift-giving. A certain amount of public prickliness over the program is only natural: after all, it is our money. The funds channeled through the REDC competition ultimately come from New York State taxpayers.
Reclaim New York—a conservative anti-government group that has come under fire itself for its close ties to Steve Bannon and Robert and Rebekah Mercer—has scathing words for the REDC awards, calling the annual dishing out of regional grants a “hunger games show of influence peddling and corporate cronyism.”
Criticism of the program has come from less zealous corners, too. State comptroller Thomas diNapoli has been critical of Empire State Development, the entity that oversees economic development in the state, for lack of transparency and failing to report adequately on its own programs.
In 2018, a report took aim at the REDC program from a racial economic justice perspective, arguing that the way the regions were drawn and funded funneled money disproportionately to majority-white communities. Co-authored by the Fiscal Policy Institute and immigrant rights group Make the Road New York, the report found that communities with a greater proportion of white residents received as much as 23 times as much funding per person as those with more nonwhite residents.
Questions of racial injustice strike right at the heart of the mission of economic development in New York State, which has been greatly concerned in recent years with staunching economic decline upstate. Rural regions of the state, which tend to be heavily majority-white, get a disproportionate share of funding compared to their more urban counterparts. Program advocates say there’s no way around that, if the goal is to boost economic development in the most stagnant parts of the state, but the numbers are stark. The New York Times reports:
New York City, with its population of 8.5 million people, nearly 68 percent of whom are nonwhite, received $5.5 million in awards per 100,000 residents. By contrast, the North Country, where less than 12 percent of the 400,000 residents are nonwhite, received $127.1 million per 100,000 residents.
If the regions had received funding promises proportionate to their population — what the report called each region’s “fair share” — New York City would have received more than 10 times more money, and Long Island nearly three times more. The North Country’s funding would have fallen by half.
Does It Work?
The awards tend to get more attention during the glitzy annual announcement ceremony than they do during the months and years that follow. It’s rare to find an in-depth news account of how valuable the program has been for a region, or a community. But sometimes a paper digs deeper: In 2018, the Watertown Daily Times took a look back at seven years of REDC awards in the North Country to see how the projects had fared.
The results of the paper’s digging were a little more illuminating than the grandiose promises typically made at the annual awards ceremony, and showed how tough it is to predict what kinds of investments will pay off for a community in the long term. One major project in the region, a plan to transform a former Alcoa plant into a sawmill that got a $3.5 million award in 2015, was shelved because of falling wood prices, and the grant was never awarded. But another major project, the 1000 Islands Harbor Hotel, has proved to be an engine for jobs and local tourism spending, years after receiving a $3 million REDC grant in 2011.
Flawed or not, the regional councils are a better way to dole out economic development funds than the way things used to be, one North Country regional council co-chair told the paper:
Considering the region as one big unit, [North Country REDC co-chair Anthony Collins said], has led to an increased focus on projects that have a more far-reaching effect. He and [co-chair Garry] Douglas highlighted the council’s prioritization of broadband internet implementation from the early days of the REDC program, which has since led to millions of dollars in state investment toward high-speed internet connectivity in rural areas.
Mr. Douglas said this way of thinking did not exist under the state’s “old paradigm” of economic development — the pre-Cuomo days of so-called member items, where taxpayer dollars were invested in the pet projects of state lawmakers.
How should New York State handle economic development funding? Is there a fairer process for deciding which projects are chosen, or which regions and communities get money and attention? When a local business or government gets a major award from the state, how should we measure the long-term impact on the community and the economy? These are the sort of questions we’d like to dig deeper into as we build our newsroom and take on more original reporting.