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Gov. considers pullback of contest for $750M in business aid

Wyandanch Rising, pictured last year, is just one

Wyandanch Rising, pictured last year, is just one of the Long Island projects that has benefited from the competition among the state's 10 Regional Economic Development Councils. Credit: Howard Simmons

The 10th year of Gov. Andrew M. Cuomo’s statewide competition for $750 million in grants and tax credits may not happen because the coronavirus has blown a hole in the state budget, officials said.

The competition among 10 Cuomo-appointed Regional Economic Development Councils is a cornerstone of the governor's strategy of “ground-up” decision-making on how state business aid is distributed, as opposed to state lawmakers directing the funds. Each council is composed of business executives, union leaders, nonprofit officials and educators who make funding recommendations to state agencies.

In past years, the councils held informational meetings in May and June for developers, governments and nonprofits on how to apply for aid using the Consolidated Funding Application process, or CFA. Applications were usually due in July.

However, an official at Empire State Development, which runs the competition, said it is on hold.

“The reality is the state is contending with a 14% drop in revenue due entirely to the pandemic, and in the absence of federal funding to offset this loss, the state will have to reduce spending to balance the budget,” said ESD spokeswoman Kristin Devoe, referring to a projected $13.3 billion hole in the $178 billion state spending plan for 2020-21.

“The REDC program, like every other state-funded program, is under review as a result, and we will provide further information as soon as we are able. Any area where the state doesn’t reduce spending will simply mean deeper cuts in another,” she said.

In the nine years of the competition, Long Island has won $727 million for 885 projects. It has been a big winner six out of nine times.

The funding has gone to redevelopment projects such as Wyandanch Rising, colleges, new sewers, worker training programs, and equipment to help modernize factories.

The local council is led by co-vice chairs Kevin Law, president of the Long Island Association business group, and Hofstra University president Stuart Rabinowitz.

Law said, “The COVID-19 pandemic has wreaked havoc with state finances, and it is understandable that all discretionary spending is being carefully reviewed, but it is my hope that the federal government will financially assist our state so that the REDCs and other important state projects and programs can move forward.”

Rabinowitz declined to comment.

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