Cuomo Starts Program to Help Stressed Localities

In a wide-ranging State of the State speech Wednesday, New York Gov. Andrew Cuomo announced a new organization to aid stressed localities as well as programs affecting the state government’s finances.

Cuomo said a Financial Restructuring Assistance Program was needed to help New York’s localities deal with financial stress. The experience of financial stress stems from varying causes. The localities need varying advice, he said. A joint task force made up of the comptroller, attorney general, Division of Budget, and private-sector restructuring consultants would run the program.

After promising that there would be no new taxes this year, Cuomo proposed a variety of programs to promote business in the state.

Cuomo said there should be Innovation Hot Spots set up in the state. These would be tax-free zones for high tech firms. There should be five firms selected this year and five more next year, he said. New York has many good universities but, compared to California, fairly little venture capital investment, he said.

Companies emerging from the hot spots would not pay taxes for the first five years, Cuomo said.

Also to promote state innovative industries, Cuomo proposed setting up the Innovation New York Network. This would bring together members of the higher education and venture capitalist community to determine good ways to promote innovation and what government regulations should be removed.

Cuomo said that a New York Green Bank should be created. This would leverage $1 billion with a private sector match to spur New York’s clean technology economy.

Cuomo offered several suggestions for boosting the upstate economy. Among these was a plan to, for an initial phase, put three casinos in upstate New York.

Cuomo, whose professional background is primarily in dealing with housing, made three housing program proposals.

To deal with the lack of affordable housing in New York, Cuomo proposed a $1 billion program to produce or preserve 14,000 housing units over the next five years.

Cuomo proposed two programs to deal with the effects of major storms on housing. One would be a grant program to promote intelligent reconstruction of houses in areas likely to be flooded. For examples, homes could be built on pillars. Another program would buy-out homeowners who wanted to move from flood-prone areas.

In his speech Cuomo argued for three other ideas that would have impacts on the Empire State’s finances.

First, he called for an end to borrowing for unemployment insurance. This would save businesses money and increase benefits.

Second, he called for increased annual hours of schooling for public school students. Localities could choose to achieve this either through longer school days or fewer vacation days. The state would pay for 100% of the additional cost.

Last, Cuomo proposed the privatization of the Long Island Power Authority. Analysts from major ratings agencies have said that a privatization would force the all-at-once redemption of the authority’s $6.9 billion short- and long-term debt.

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