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Know Your Rights
Source: New York Times
Subject: Strategic Policy Advocacy
Type: Media Coverage

New York’s Economic Spending Shortchanges Nonwhite Communities, Report Says

As New York has poured billions of dollars into economic development and trumpeted the rebirth of once-blighted regions of the state, the money awarded through one of the governor’s signature programs has flowed disproportionately to predominantly white communities, according to a new report.

The Regional Economic Development Councils initiative, introduced by Gov. Andrew M. Cuomo as a bottom-up model of shaping economic growth, calls for councils representing 10 regions around the state to compete for funding. Since 2011, the initiative has awarded more than $5 billion to over 6,300 projects.

But the report found that regions with a greater proportion of white residents have received as much as 23 times more funding per person than communities with a high density of nonwhite residents.

“The regional council competition is one of the largest sources of economic development money in the state,” the authors wrote. “Historically, this system has shortchanged communities of color.”

The report was released Wednesday by the Fiscal Policy Institute, a nonpartisan think tank, and Make the Road New York, an immigrant rights group whose advocacy arm has endorsed Cynthia Nixon in her Democratic primary challenge to Mr. Cuomo.

The governor has consistently emphasized the importance of stanching the economic free-fall of upstate New York, which is predominantly white, as the disappearance of manufacturing jobs has led to abandoned factories and a dwindling population, especially in the Southern Tier. Even as New York City’s economy has recovered, its counterparts elsewhere in the state have lagged far behind.

Still, the report is the latest of a chorus of criticism of the state’s development practices, as they have been battered by charges of corruption, waste and opacity. Last month, Alain Kaloyeros, the onetime leader of Mr. Cuomo’s so-called Buffalo Billion initiative, was convicted in a sprawling bid-rigging trial.

While the regional councils have not figured prominently in recent scandals, the report suggested that they were part of a broader culture in need of reform.

“This is just one example, honestly,” said Deborah Axt, the co-executive director of Make the Road. “We have long been disappointed in the model of economic development. But we were certainly shocked at the extent to which communities of color are just not represented either in the decision-making model or where the dollars land.”

The report analyzed the amount of money allocated to each of the state’s 10 economic development regions through the councils over the past seven years. Though the total amount awarded to each region was roughly similar — between $460 million and $615 million — the amount per resident varied drastically.

New York City, with its population of 8.5 million people, nearly 68 percent of whom are nonwhite, received $5.5 million in awards per 100,000 residents. By contrast, the North Country, where less than 12 percent of the 400,000 residents are nonwhite, received $127.1 million per 100,000 residents.

If the regions had received funding promises proportionate to their population — what the report called each region’s “fair share” — New York City would have received more than 10 times more money, and Long Island nearly three times more. The North Country’s funding would have fallen by half.

The funding awarded through the regional councils accounts for just a fraction of the state’s economic development spending. It does not include money spent on infrastructure, such as a $1.8 billion project to redesign an expressway in the South Bronx. The state also has other programs dedicated explicitly to promoting growth in communities of color, including expositions for minority- and women-owned businesses.

Howard Zemsky, the president of Empire State Development, the state’s economic development agency, said that much of the investment upstate does go to minority communities, even if they do not make up the majority of the population there. He cited work force development and anti-poverty initiatives in Buffalo and Rochester.

Alphonso David, the governor’s counsel, called the report’s focus on the regional councils “disingenuous.”

“To look at economic development policy in a vacuum without appreciating all of the work we’re doing writ large is irresponsible,” he said.

Mr. Zemsky emphasized the plight of the upstate economy, adding that “unless you’re prepared to allow these regions to decline indefinitely, then those are the regions that need a disproportionate share of support.”

The report also noted the lack of diversity among the council’s leaders, who are appointed by the governor’s office. Ninety percent of those leaders are white, and 72 percent are male.

Mr. Zemsky said the councils collaborate with local groups who reflect the diversity of their regions. Given those unseen players, he said, “I do think it negates that argument” about the lack of diversity on the councils themselves.

But the report’s authors maintained that the regional councils program, while not inclusive of all economic development money, should still be scrutinized as a barometer of Mr. Cuomo’s dedication to nonwhite communities.

“The regional councils are the governor’s signature economic development initiative,” Ms. Axt said. “To call their damning record irrelevant is absurd.”