Cuomo's upstate fund faces criticism

ALBANY – Senate Republicans are balking at Gov. Andrew Cuomo's plan to create a competition for upstate development grants, and Comptroller Thomas DiNapoli is warning that the $1.5 billion fund is being shifted among state agencies — giving Cuomo "great latitude in spending."

Meanwhile, upstate business leaders said they would come to Albany on Wednesday to pressure Cuomo and the state Legislature to increase the size of the fund from $1.5 billion to $2.5 billion.

All of it comes ahead of the final weeks of budget negotiations for the fiscal year that starts April 1. Cuomo has made the $1.5 billion competition a centerpiece of his budget plan to help the upstate economy.

The criticism, though, is that three out of seven regions would each get $500 million — leaving the other regions with nothing. Those who could compete would include the Hudson Valley, Finger Lakes and Southern Tier.

"Senate Republicans certainly support upstate receiving a significant amount of infrastructure funding — but we disagree with the governor that there should be winners and losers," Scott Reif, a spokesman for Senate Republicans, said. "We believe all of upstate New York should get the help it needs and deserves."

How the money could be used also drew scrutiny from DiNapoli. A comptroller's report Friday contended that Cuomo's amendments to the budget last month would quietly shift $4.55 billion in bank settlement funds from a separate appropriation to three state agencies, giving the governor greater discretion over the money.

"Several of the amendments give the executive great latitude in spending," DiNapoli said in a statement.

That would include the $1.5 billion Upstate Revitalization Fund. The money would be shifted from a specific fund under Empire State Development, the state's economic development arm, to three $500 million funds under the health and transportation departments.

Also, the revised proposal would focus the fund mainly on job-creation incentives — not on infrastructure needs that cities are clamoring for.

The new plan, DiNapoli's report said, would support the three regional plans that "best support job creation and leverage private sector investment, as opposed to supporting economic development and critical infrastructure projects more generally, as originally proposed."

Cuomo has looked to competitive grant programs to fund initiatives. In particular, he established 10 regional economic development councils in 2011 that compete annually for a pot of about $700 million in grants for local projects.

Cuomo has said the competitions lead to better proposals, galvanizing each region. And he's said that new jobs would lead upstate communities to have better finances, allowing them to fund repairs to roads and bridges.

"I believe in competition. Just give us the money: No. If I just gave you the money, you wouldn't do all the hard things you need to do to get the money," Cuomo said Jan. 15 when he announced the proposal in Rochester.

If there's going to be a competition, upstate business leaders are urging that the pot be raised to $2.5 billion. They invited legislative leaders and Cuomo to meet with them on Wednesday.

The invitation states that Cuomo's proposal for a $1.5 billion fund is a good first step, but to replicate the success of a $1 billion commitment to Buffalo in 2012, the new plan should be increased to $2.5 billion.

"That is why our leaders must be bold and replicate these successes by making an unparalleled $2.5 billion investment in New York's future," the invitation, obtained by Gannett's Albany Bureau, states. "This money would address the urgent needs of Upstate and would be leveraged many times over to create jobs and drive economic growth."

The invitation, like the op-ed they wrote Wednesday on their stance, is signed by most of the prominent business figures in upstate New York, including: Jerry Jacobs, co-CEO of Delaware North in Buffalo; Syracuse University Chancellor Kent Syverud; Tom Tranter, president of Corning Enterprises; and Danny Wegman, CEO of Wegmans Food Markets in Rochester.

Syverud, Wegman and Tranter are co-chairs of their region's economic development council.

On Wednesday, Cuomo was asked in Rochester about the push from business leaders, and he said he supports it — urging the state Senate in particular to boost the fund to $2.5 billion.

"If they can get the Senate to put in more money, I'm 100 percent supportive. I'm trying to get them just to do the $1.5 billion. If they can get the Senate to do more, great," Cuomo said.

JSPECTOR@Gannett.com

Twitter.com/gannettalbany