Department of Economic Development

The Executive Budget recommends (analysis as of January 28, 2008):

A FY 2008-09 workforce of 230, an increase of 15 from FY 2007-08.    

• The total appropriation for Personal Service is $16.4 million, an increase of 8.6%.

• An All Funds appropriation of $56.6 million, an $11.5 million increase (25.6%); most of this increase is targeted for contractual services.

• The increase of 15 FTEs in the Economic Development Program reflects actions to expand statewide economic development efforts, including additional staff for the regional office in Buffalo.  According to the Assembly analysis, $1.5 million in increased administrative costs are associated with these positions.  Funds to support these positions are likely related to the $1 million increase in the maintenance undistributed personal services appropriation in the Economic Development Program.

• According to the Senate budget analysis, the Executive Budget proposes “interchange” language to allow for 30 new FTEs to be allocated between DED and the ESDC as needed.  This language can be found on page 43 of the Economic Development appropriation bill (S6805/A9805) in the language describing the maintenance undistributed personal services appropriation in the Economic Development program as well as page 512 of the same bill in Urban Development Corporation appropriation (in the language describing the $4.1 million appropriation for the UDC Economic Development Program).

• Contractual Services appropriations increase by $10 million, or 42%.  Most of this increase is found in the following areas:

o    Administration - $1.2 million increase.

o    Marketing Program – a $7.5 million increase in the maintenance undistributed appropriation.  According to the Assembly budget analysis $4 million of these funds are for the I Love NY program and $3.5 million are for a new program to market and promote Upstate business.

o    Economic Development Program –Increases of $2.3 million (Promote International Trade) and $500,000 (Economic Development) in the maintenance undistributed appropriations for these programs.  According to the Assembly budget analysis, the international trade funds are to promote New York exports to foreign countries and attract foreign investment.

These increases are partially offset by a $1.1 million decrease in contractual services in the Economic Development Program.  The purpose of these large increases for contractual services should be discussed at statewide labor management.

• The estimated number of FTE consultant employees employed under consulting services contracts will decrease by 13 from 85 to 72 in FY 2008-09.  However, the cost of these consultant employees will increase to $10.3 million (a 9% increase) in FY 2008-09 and the average annual cost per FTE consultant employee will increase by 29% to $143,000.  The purpose of these contract employees and whether their work can be done by state employees should be clarified at Labor Management.

• Proposes legislation to authorize certain state agencies, including DED to finance their activities with revenues generated from assessments on public utilities and cable television companies.  Enactment of this bill is necessary to implement the 2008-09 Executive Budget, because the bill will ensure the recovery of $820,000 in expenses incurred by DED.

• Making permanent the general loan powers of the New York State Urban Development Corporation (UDC); PEF has opposed this proposal in the past. Enactment of this bill is necessary to implement the 2008-2009 Executive Budget, which assumes that UDC will provide certain economic development assistance through its general power to make loans and grants, rather than only grants. Absent this legislation, the Corporation could not fund loans approved through the Metropolitan Economic Revitalization Fund.