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Watchdog group says better metrics needed to measure economic development grants

Posted by Karen DeWitt on

Next week, Governor Cuomo is scheduled to hand out more than two billion dollars in economic development funds to regional groups. But a budget watchdog group says there needs to be better measurements to show how many jobs have actually been created and retained.

Each December since he took office, Governor Cuomo has presided over what amounts to an awards ceremony to hand out what’s now a total of three billion dollars for economic development projects. In December 2014, over $700 million dollars was distributed.

Some of the items expand manufacturing space or set up job training programs. Others resemble the old legislative members items, which were special allocations to individual legislators, going to things like expanding recreational facilities at parks or sprucing up a local theater. In this case, though, they are generated by the councils, not lawmakers and awarded by the governor.

This year the stakes are even higher because Cuomo will be giving out an additional one and half billion dollars generated from a budget surplus to three of seven competing regions. It’s known as the Upstate Revitalization Initiative, but some have dubbed the  contest the hunger games.

A long time budget watchdog group has found, though  that it’s difficult to measure whether the money has actually been used to create and retain all the jobs that the regional councils initially claimed.

Rahul Jain is with the Citizens Budget Commission , says for that reason, the public should be skeptical.

“We should keep a wary eye on what the funds are going for,” Jain said.

He says Citizens Budget Commission started looking at the performance metrics used by the individual regions, and found each had set their own rules. For instance, the Capital Region Economic Development Council said it would measure it’s success in part on how many Associated Press stories mentioned the area under it’s business tagline, the Long Island Council  said it would  count the number of workers trained in the so called green technologies. Many regions did include common benchmarks like wages, creation of new businesses and employment numbers, but Jain says there was no basic standardized system across all the regions.

“Some regions reported it well,” Jain said. “Some regions didn’t report it at all”.

Jain says the commission thinks that perhaps the awards, which after this year will approach a total of nearly $5 billion dollars, could be better spent on much needed infrastructure repairs, with more tangible results.

“If I fix a water main, it will be there to service residents for thirty years,” said Jain. “Int his case, we don’t know if it’s creating the jobs that they say it will.”

Cuomo’s Empire State Development Corporation manages the distribution of money to the regional councils and evaluates their proposals.

The watchdog group gives Empire State Development credit for recently trying to improve its reporting requirements for the regional councils, beginning this year.

In a response, a spokesman for Empire Development defends the Regional Economic Development Council process, saying it’s “brought unprecedented transparency and accountability” to a system that previously lacked both those things.

And in statement spokesman Jason Conwall says the councils have been “undeniably” successful, and have created or retained over 150,000 jobs.

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