ALBANY – Gov. Andrew M. Cuomo, quashing concerns that state financial problems will undermine his $1 billion job-creation pledge for Western New York, today will unveil plans for a down payment involving efforts to bring next-generation private research and development companies to Buffalo.
The plan will include a state investment in high-technology biomedical equipment in return for a commitment from a private company to locate in Western New York. Officials declined to provide the funding level or to name the company, but speculation was all over the board among local officials Monday.
As Cuomo traveled to Washington to ask for a $42 billion federal aid package for Superstorm Sandy restoration, his administration Monday signaled that the state’s growing fiscal uncertainties will not force him to retreat on his $1 billion pledge in special funding over the next five years.
“Tuesday will absolutely make it clear that it’s full steam ahead,” said a Cuomo administration official, speaking on condition of anonymity.
The governor will seek to reverse growing sentiment in some business quarters that the year-old promise is fuzzy and subject to retrenchment because of a new budget hole caused by Sandy.
The governor this morning will hear suggestions from a panel of regional advisers on how some of the initial $1 billion could be spent, including proposals for an advanced training institute for manufacturing jobs, an effort to help bring local health care innovations to commercial markets, and a new push to make the New York side of Niagara Falls more tourist-friendly.
Cuomo, sources say, also is poised to make an announcement permitting a Lewiston family that owns the Maid of the Mist tour company to keep the world-famous boats operating at Niagara Falls.
The Niagara Falls announcement is set to come, sources said, at the end of a bus tour that Cuomo will take with local government and private-sector executives. At the Buffalo Niagara Convention Center in downtown Buffalo, the governor will hear from regional council members with both broad and specific ideas for the $1 billion, a meeting that was set to be held in private before Cuomo’s trip was scheduled. Administration officials said the new initiative will be based on a model used in Albany in which the state invested hundreds of millions of dollars in the State University at Albany.
The money has been used to purchase equipment that then has been used by a who’s who of top technology companies at a nanotechnology campus growing so quickly that the state recently rerouted a major four-lane road around the facility.
Speculation ran all over the place Monday. There was talk that Cuomo would announce a deal to keep the Buffalo Bills from moving; officials said talks are continuing. Another was formation of a consortium with the State University at Albany for a nanotech facility in Buffalo; Cuomo officials shot that one down, too.
Another idea that has been under discussion for months is a new state investment in the UB/Buffalo General Jacobs Neurological Institute involving a venture with a private company; Cuomo officials would not confirm or deny that speculation.
“The governor will make a down payment on the Buffalo billion dollars and show a path forward for larger investment,” a Cuomo source said.
With the state economy still struggling and state finances growing murkier – because of the dual financial hit that Sandy could have on declining tax revenues and higher spending pressures – some economic-development executives have wondered how Cuomo will keep his funding pledge.
He made his $1 billion promise in his State of the State address last January. The spending promise was vague in terms of how the funds would be directed and how much of it would be in actual cash versus tax breaks or loans.
Moreover, Cuomo said in January that the $1 billion would be spent over a five-year period – two years beyond the four-year term of the governor.
Cuomo went out of his way in January to say that the Buffalo area has been ignored by the state for too many years and that the state needed to do for Western New York what it has been doing for a generation in the Albany area by promoting high-technology industries.
But the state has faced new economic hurdles since January. Unemployment is still high, and the economy has not improved to the levels that officials thought when the state budget was put together in March. Meanwhile, a growing number of localities – from cities to school districts – are facing mounting fiscal pressures that need Cuomo’s attention.
Then there was Sandy, whose financial impact on tax revenues – including sales and income taxes – isn’t yet clear. Nor is it certain how much of Cuomo’s lofty request of $42 billion from federal storm aid will be realized.
“I think there’s a combination of hope and realism,” said Andrew J. Rudnick, president and CEO of the Buffalo Niagara Partnership and member of Cuomo’s local economic advisory team. “The hope is that with the hits on revenue and expenditures from Sandy, the governor will be able to maintain the $1 billion commitment at the end of 2012 as he made at the beginning of 2012. The reality is, it’s kind of hard to believe that’s possible, and maybe one of the understandable outcomes is [the funding] is maybe postponed for a year or two. I think this community would understand that, but at the moment, every vibration we’ve gotten is everything is a go,” Rudnick said.
“But it’s hard to believe there isn’t going to be some fallout for everything in the state, including our $1 billion.”
“The governor made the pledge, and I believe him to be a man of his word,” said Assemblyman Robin L. Schimminger, D-Kenmore, chairman of the Assembly’s Economic Development Committee.
Colleen C. DiPirro, president of the Amherst Chamber of Commerce, said Sandy’s impact is a consideration. “It’s very difficult for us to fight for that check to be written when people lost their homes in that storm,” said DiPirro, who also is a member of Cuomo’s local economic advisory panel.
Then there is the age-old Western New York worry: promises of funding from Albany that have come and gone. “I think that [Cuomo’s] intentions are very honorable and that Western New York needed a shot in the arm, and that money would be the impetus to getting us working together collaboratively to lay the foundation for sustainable prosperity,” DiPirro said.
How Cuomo could retreat on such a public pledge would be a challenge for a governor who wants to win re-election with historic numbers in 2014 as a prelude to a possible White House run two years later. For that, he would have to do better in Western New York than he did two years ago, when he lost all the counties in the region.
The pledge has not moved some from the category of firm believer. “The optimism level is very high about the whole thing,” said Paul Brown, president of the Buffalo Building and Construction Trades Council, also a Cuomo regional economic council member.
Asked why his optimism level has not been lowered, given Sandy’s looming impact on the state budget, Brown said, “I don’t know why it should. Obviously, the hurricane was a huge deal, but it would be two separate items, I would think.
“And I would think if there was a problem, they would have said something by now, so I assume things are still full steam ahead.”