This month’s legislative update comes from the Syracuse University Office of Office of Government and Community Relations with thanks to Diana Napolitano.
The budget was relatively good to higher education, adding $70M in new funds for higher ed. Opportunity programs were increased by about 3%, reversing a five-year trend of cuts, and stagnation. Other programs pertaining to higher education were fully funded, such as the Centers for Advanced Technology, and direct institutional “Bundy” Aid.
Economic Development
On the economic development front, a third round of Regional Economic Development Councils received $150M in capital funding and $70M in tax credits, but the final budget agreement rejected the Governor’s proposed $720M in “transformational projects”.
Additionally, the Legislature modified the Governor’s proposed Innovation Hotspots and Incubators program, combining them into one program, funded at $1.25M (growing to $5 million). Incubators will receive operating support, in a program managed by ESDC. There appears to be no limit on how many entities may be designated as a New York State Incubator. Support per incubator has yet to be determined; each grant must be matched $2 for every $1 in state support. All grant funds must go directly to the operations. No state funds may be used for overhead and indirect costs. Qualified incubators—virtual or physical—will be able to apply to be one of 10 ESDC-designated “Hot Spots”—one per region. There will be five hotspots named in 2013-14, and five named in 2014-15. Being a hotspot will entitle the incubator’s tenants to tax breaks.
To be designated as a New York State Incubator or Innovation Hot Spot, an entity must:
- Have been in existence for at least three fiscal years (or demonstrate continued staffing, program, and purpose if the governing entity has changed);
- Be connected to regional sources of innovation and expertise;
- Demonstrate that it creates jobs and incubates businesses with higher than average success rates; and
- Provide a strategic plan for continuing success for at least three fiscal years after designation.
Additionally, the legislature agreed to fund the Innovation Venture Capital Fund at $50M. The Fund will help new and existing businesses in New York State develop ideas and research into products to market. The funds will be distributed according to a plan developed by ESDC and approved by the Budget Director, President of the Senate, Speaker of the Assembly, and the minority leaders of the Senate and Assembly. To be eligible for funding, an applicant must: (1) be located or agree to relocate to New York; (2) be in seed-, early-, or venture-stage of development; and (3) have the potential to generate additional economic activity in New York State. ESDC is responsible for creating rules for evaluating applications. Details on how the fund will be set up, and eligibility requirements, are still being worked out.
Employers
For employers, the cost of doing business will increase as minimum wage rises via a three-year phase-in to $9/hour. The first increase to $8 per hour will become effective on December 31, 2013. A year later, it will increase to $8.75 and then, by December 31, 2015, it will increase to $9 per hour. As in the past, the new minimum wage requirement exempts student workers that attend the college or university where they are working. It is projected that this labor cost increase will have a direct and indirect impact of close to $1B a year on commercial and non-profit entities. However, businesses will receive a tax credit for hiring young students. There will also be a tax credit for hiring unemployed veterans.
Community and Workforce Development
“Next Generation Jobs Linkage Program”: This program for community college vocational programs requires evidence of student success in finding jobs by partnering with employers. The requirement is incentive funding based on student success measures.
The Community schools program is funded at $15M.
SUNY and CUNY
The Enacted Budget includes an additional $30.8 million in funding for SUNY and CUNY community colleges. This equates to a $150 per full-time student equivalent increase. It also calls for the third round of SUNY 2020 and launches CUNY 2020—competitive grants for projects that connect economic development and academic excellence. The Budget requires SUNY to establish a remedial program modeled after the CUNY Accelerated Study in Associate Programs (ASAP). The SUNY program will be called the Graduation, Achievement and Placement Program (GAP). SUNY and CUNY also received $1.7 million each to support these remedial programs.
| Budget Item | 12-13 Enacted Budget | 13-14 Enacted Budget |
| Centers for Advanced Technology | $13.82M | $13.82M |
| NYSTAR Science & Tech Law Ctr. | $343,000 | $343,000 |
| Centers of Excellence operating | $5,234,000 = $872,333 per Center | $5,234,000 = $872,333 per Center |
| High Technology Matching Grants Program | $4.61M | $4.61M |
| Higher Ed. Facilities Capital Match Program | Re-approp $53M | Re-approp $45M |
| Empire State Stem Cell Research/ NYS Stem Cell Science Board | $44.80 M | $44.80M |
| Innovation Economy Matching Grants | $29.5M | $22.67M (re-approp) |
| Innovation Hotspots and Incubators | n/a | $1.25M |
| Innovation Venture Capital Fund | n/a | $50M |
| Regional economic development councils | n/a | $150M (capital projects) + $70M tax credits |