Economic development grants on hold
State legislators call for federal stimulus bill; Trump tells Congress to wait
State economic development funding this year is on hold as New York copes with the financial impact of the coronavirus pandemic.
The Downtown Revitalization Initiative winners are usually announced in the summer, but weren’t this year. The Regional Economic Development Councils usually announce their priority projects between September and now, but haven’t. These, along with Consolidated Funding Applications, are all in limbo.
The state may choose to make sweeping cuts to economic development aid and programs unless federal funding is made available to assist the revenue-deficient state government. Until then, this funding is “under review,” the wording favored by various state officials.
A bill to fund state and local governments — known as HEROES 2.0 — is currently hung up in Congress, with some senators and the president opposing passage of the coronavirus stimulus package until after the Nov. 3 election.
On Tuesday President Donald Trump told legislators to forget about passing a stimulus bill until after the Nov. 3 election.
“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted.
This is three days after he tweeted “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE. Thank you!”
The New York Department of State press office said the fifth round of DRI has not yet been announced due to the state’s decline in revenue and the delay of DRI round four rollout, which is in the process of finalizing the planning process.
“The State will review the recommended (round four) projects upon submission this fall,” the DoS press office wrote.
The fifth round of DRI was included in the 2020-21 enacted budget but is on hold.
Since 2013, REDC grants have helped kick-start North Country projects such as the Hotel Saranac renovation, the Wild Walk in Tupper Lake and a new hotel being built in Saranac Lake.
“However, the reality is, the State is contending with a 15% 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,” Empire State Development spokesperson Kristin Devoe wrote in an email.
Basically, without the intervention of federal dollars, state programs, including ones for economic development funding, will be on the chopping block for reductions.
“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,” Devoe wrote.
Saranac Lake safe
Fortunately for Saranac Lake, the village’s $9.7 million Downtown Revitalization Award was approved in 2018 and funded in 2019.
“Everyone’s going forward with their projects,” Jamie Konkoski, Saranac Lake’s community development director said Tuesday.
Of the $9.7 million in funding, $4.1 million is in public-sector contracts that have already been executed and thus will be honored by the state. The rest of the funding is going to private projects, which are still in the development process. Only one project, a brewery and renovation by Bitters & Bones tavern, is in what Konkoski called the “implementation phase.” All the others are still in various phases of design.
Projects — and possibly future funding — may be delayed, she allowed, but nothing is in danger of being canceled due to the ongoing pandemic.
“I think that our obligation as a state is to pay them,” state Assemblyman Billy Jones, D-Plattsburgh said Tuesday. “Now when that will be is dependent our economy bouncing back and a federal stimulus package coming in.”
State lawmakers say NY needs federal funds
State legislators said the state funding of economic development aid programs now relies on federal stimulus intervention.
“Everything is under review until we know how much money we have,” state Sen. Betty Little, R-Queensbury, said. “It’s totally uncertain, and it’s all contingent on what we get from the federal government. … It certainly could be a reduction … but I’m hoping it isn’t.”
In April, when the two chambers of the state Legislature passed the 2020-21 budget, they also gave Gov. Andrew Cuomo and his state Division of Budget sweeping powers over a “rolling state budget,” with the ability to make cuts during the budget year due to a $15 billion deficit caused in part by the pandemic.
“There’s just so much uncertainty right now because the state is in serious budget woes because of the COVID pandemic,” Jones said. “These budget cuts and these deficits are going to affect everyone, every facet, every program. They’re going to touch people’s lives all over the North Country and all over the state.”
He said school aid, veterans programs and infrastructure all also rely on new federal aid amid the pandemic, to name a few.
“I haven’t heard specifically that those programs will be cut, but I’m sure they’re in play,” Jones said.
“We need to push the federal government to come up with funding for the state, for the local government, the school districts … everyone,” Little said. “I think that they will, but they’re taking forever to get there.”
She said that over time, anxiety and uncertainty rise.
“These are unprecedented times for the state. There’s a huge amount of money being spent on COVID protection,” she said.
Federal aid bill
After months of deliberation and partisan disagreement, House Democrats passed a new coronavirus stimulus bill last week, known as HEROES 2.0. This $2.2 trillion package would include state, county and local government funding.
North Country Rep. Elise Stefanik, R-Schuylerville, voted against this package because she said it was partisan and would include giving stimulus checks to undocumented immigrants who pay taxes using their Individual Tax Identification Numbers instead of Social Security Numbers. The bill still passed, with every Republican and 18 Democrats voting against it.
However, the bill still needs to be passed by the Republican-led Senate, and since it is seen by the GOP as a Democrat-leaning partisan bill, it has been deemed unlikely to pass, or even be voted on in the Senate.
U.S. Sen. Kirsten Gillibrand, D-NY, said Tuesday she would support the bill.
“I don’t know that (U.S. Senate Majority Leader Mitch) McConnell is going to let us vote on the House bill, but he certainly should,” Gillibrand said in a conference call with reporters. “There is a possibility but the American people just have to demand it.”
State legislators’ call on federal legislators
State legislators said federal legislators need to put party politics aside to pass some sort of stimulus aid package to assist Americans and states.
“They don’t seem to be working together at all. … They need to compromise,” Little said. “I have worked in the state for years when the Senate was Republican and the Assembly was Democrat. There was compromise. That’s how you get to a bill; that’s how you get to a budget. You have to work together for the good of the people.”
She said federal politicians need to pass a bill, even if it is not exactly what they wanted.
“If the Democrats put something out, it’s out there. That’s their budget; that’s what they want,” she said. “The Senate wants a few different things. You’re never going to be able to come to a resolution unless you come together and compromise.”
Jones said collaborating on a federal stimulus bill could “prove a lot” to Americans about what Congress is able to do, pointing out that Washington D.C. is “politically volatile” right now, four weeks away from an election.
“Show the country you can get together and come up with a meaningful package that will help Americans out,” he said. “If they got together to do that, that would prove a lot to the American public, especially before a very contentious election.”
On Tuesday Trump said he told McConnell to focus on approving his Supreme Court nominee, Amy Coney Barrett, instead.
“I hope every New Yorker and every American who is being harmed by COVID speaks out and demands that the Senate acts,” Gillibrand said in a phone press conference Tuesday afternoon, at almost exactly the same time as Trump posted his tweet.
Staff Writer Amy Scattergood contributed to this report.