Regional Economic Development Councils are state-appointed bodies tasked with coordinating economic development strategies and distributing grants, tax credits, and other financial assistance across New York’s ten regions. This page covers CBC’s work on the Consolidated Funding Application process, project-level performance reporting, the standardization of economic development metrics, the alignment of funding with regional strategies, and the transparency of state economic development spending.
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Only projects tied to an established regional or State strategy should be eligible for economic development-related financial assistance.
The REDC process should utilize quantifiable criteria by which target industries are identified.
REDCs should focus projects in major population centers—the anchor metropolitan areas in a given region—where projects are more likely to contribute to the development of sustainable industry clusters.
The State should establish standardized metrics for regional performance and require project-level reporting on progress, employment, and spending.
The REDCs’ project scores should count as a greater proportion of the total assessment.
Key Data
In a December 2019 report, the CBC noted that since the REDCs' 2011 inception, the State has allocated $6.2 billion of State grants, tax credits, and other funding, representing an average of $773 million a year to businesses and localities.
Of the 1,090 economic development projects funded in 2017 and 2018, only 59% related to a regional or State strategy, though these aligned projects accounted for 73% of total funding.
In 2015, the State launched the Upstate Revitalization Initiative (URI) to award $1.5 billion to three winning upstate regions, but as of August 2019, only $368 million of the allocation had actually been spent statewide.
Analysis from December 2019 showed that New York City received only $65 per resident in REDC awards since 2011, which was about one-tenth of the statewide regional average of $667 per resident.
A November 2015 policy brief revealed that out of 385 Priority Projects begun in 2012, only 19% included actual employment results in their 2014 progress updates, and only 9% of the projects were completed.
Regional Economic Development Councils fail to provide maximum value due to the lack of a comprehensive strategy, dispersed investments, and inadequate transparency. Improving these programs requires statewide reforms such as standardized performance metrics, a unified economic development budget, and enhanced project evaluation.
New York's Regional Economic Development Councils have distributed $6.2 billion in funding since 2011, yet the program suffers from a lack of strategic alignment and inconsistent performance reporting. To improve effectiveness, the state should prioritize projects tied to clear economic strategies, focus investments in major population centers, and implement standardized metrics for evaluating project outcomes.
Recommendations related to Regional Economic Development Councils (REDCs)
Only projects tied to an established regional or State strategy should be eligible for economic development-related financial assistance.
The REDC process should utilize quantifiable criteria by which target industries are identified.
REDCs should focus projects in major population centers—the anchor metropolitan areas in a given region—where projects are more likely to contribute to the development of sustainable industry clusters.
The State should establish standardized metrics for regional performance and require project-level reporting on progress, employment, and spending.
The REDCs’ project scores should count as a greater proportion of the total assessment.
Key Data
$6.2 billion
— Total State grants, tax credits, and other funding allocated to businesses and localities since the inception of the REDCs in 2011.
$4.4 billion
— Total State spending on economic development in 2018, including direct expenditures and forgone tax revenue.
$2.5 billion
— Total State economic development-related tax expenditures in 2018.
$1.8 billion
— Total State economic development direct spending in 2018.
$863 million
— Total REDC funding awarded in 2018.
$10 million
— Amount of workforce training projects funded by the State's Department of Labor through REDCs in 2018.
$28.8 billion is the cumulative four-year budget gap facing New York State between fiscal years 2020 and 2023. CBC President Andrew Rein joined the podcast to explain how the State should get its fiscal house in order. And for a special treat, CBC's Andrew Perry and Ana Champeny discuss regional…
New York's Regional Economic Development Councils (REDCs) should be reoriented to better align funding with regional strategies, prioritize projects with higher potential returns, and improve reporting consistency. Additionally, these councils need to collaborate more systematically with the Department of Labor and SUNY to identify and address regional skills gaps and workforce training needs.
Recommendations related to Regional Economic Development Councils (REDCs)
Align funding with regional strategies to focus on projects in thriving industries and in large cities or counties to foster agglomeration effects.
Implement a stricter prioritization of projects based on potential return on investment; funding fewer projects will allow for sustained investment to advance long-term goals.
Set clear goals and criteria for evaluating success, and improve consistency and quality of project reporting to allow for tracking progress over time.
The NYS Department of Labor should work with REDCs to routinely and systematically identify and track regional skills gaps and workforce training needs.
Strengthen SUNY partnerships with REDCs to develop and assess training programs.
Key Data
$750 million
— Annual awards to regional projects based on REDC rank and State agency score.
43%
— State average share of economic development projects tied to a REDC strategy.
$382,077
— State average economic development project award.
13%
— Share of economic development projects tied to a REDC strategy in New York City.
Spectrum News On Wednesday, Governor Cuomo outlined plans for the state's eighth annual regional economic development council competition, calling the program a success. But not everyone is convinced the approach is working.
The FY2018 Executive Budget allocates $150 million to Regional Economic Development Councils, which is criticized as part of a broader trend of directing capital funding toward dubious economic development projects. This spending is compounded by a 15 percent increase in appropriations for economic development projects, raising concerns about the efficacy and transparency of these investments.
Key Data
$150 Million
— Capital funding spread throughout the state through the Regional Economic Development Councils.
New York's Regional Economic Development Councils have distributed nearly $4 billion in tax breaks and grants since 2011, yet employment growth in most regions has trailed national and neighboring state averages. Rather than continuing to target industries that have failed to produce gains, these councils should pivot toward broad-based regulatory, tax, and infrastructure reforms to better stimulate regional economies.
Recommendations related to Regional Economic Development Councils (REDCs)
The REDCs should reassess their strategic plans and revise them with an eye toward investing in business sectors that are more likely to spur growth.
Rather than aiding specific businesses or projects, better results may be available through regulatory and tax reform, enhanced career and technical education, or infrastructure investment that benefit employers throughout the region or state.
Key Data
$4 Billion
— Total amount of tax breaks and grants awarded through the REDCs to date.
$750 Million
— Amount of funding available for REDC economic development awards in the current year.
7.9 percent
— Total employment growth in New York State between 2010 and 2015.
656,801
— Number of jobs added in New York State from 2010 to 2015.
13.2 percent
— Employment growth in the leisure and hospitality sector, making it the fastest-growing sector statewide.
$120,400
— Average pay for technology sector jobs statewide.
New York state spends $8.6 billion annually on economic development initiatives, yet lacks a unified budget or clear metrics to evaluate the effectiveness of these investments. The state should implement more robust reporting requirements for Regional Economic Development Councils and shift toward paying for performance rather than providing upfront discretionary grants based on promises.
Recommendations related to Regional Economic Development Councils (REDCs)
More robust reporting requirements are needed for Regional Economic Development Councils.
The state should stop project-specific appropriations for economic development until eligibility criteria are established and accountability mechanisms enhanced.
The state should pay for performance, providing subsidies only for investments and wages that have been expended.
Key Data
$8.6 billion
— Total annual state economic development investments.
$4 billion
— State portion of annual economic development investments.
$4.6 billion
— Local portion of annual economic development investments.
$750 million
— Cost to build the SolarCity factory.
$486 million
— Appropriation for the SolarCity plant in Buffalo.
$638 million
— Appropriation for the Nano Utica project.
New York State's economic development spending has expanded significantly, including $600 million in capital grants through Regional Economic Development Councils and $1.5 billion for the Upstate Revitalization Initiative, despite a lack of evidence that these initiatives yield worthwhile returns. A moratorium on further economic development spending is necessary until the benefits of existing programs can be thoroughly examined and unsuccessful initiatives are terminated.
Recommendations related to Regional Economic Development Councils (REDCs)
A moratorium should be declared on expansions in economic development spending, including those involving Regional Economic Development Councils, until the benefits of existing programs can be examined carefully and unsuccessful programs terminated.
The proposal to use $170 million for losers of last year’s Upstate Revitalization Initiative should be rejected as an unjustified economic development program.
The use of settlement funds to support economic development projects with unquantifiable returns on investment should be rejected.
Key Data
$600 million
— Capital grants allocated through Regional Economic Development Councils.
$1.5 billion
— Funding allocated for the Upstate Revitalization Initiative.
$1 billion
— Additional funding proposed for economic development initiatives.
$110 million
— Funding allocated for SUNY/CUNY challenge grants.
$200 million
— Total funding allocated for the losers of the Upstate Revitalization Initiative.
New York State has committed nearly $3 billion to projects reviewed by Regional Economic Development Councils (REDCs) through 2014, yet a widespread lack of standardized reporting and project-level data has hindered the ability to track performance and evaluate the effectiveness of these investments. To improve accountability, the state should mandate the annual collection and publication of actual project-level data, including total costs, jobs created, and jobs retained, while also enhancing the centralized data table to allow for better cross-project comparisons.
Recommendations related to Regional Economic Development Councils (REDCs)
ESD should collect and publish actual project-level information on total costs, jobs created, and jobs retained for all projects annually.
ESD should collect more information for its centralized CFA Data Table to allow for comparisons across year of award, industry sectors, state agencies, and project types.
REDCs should report job results by individual project rather than in aggregate to allow for tracking how individual projects are performing relative to their projections.
Key Data
$3 Billion
— Total amount committed by the State to projects reviewed by REDCs through 2014.
$1.5 Billion
— Amount to be distributed to three upstate regions based on the 'Upstate Revitalization Initiative'.
3,323
— Total number of projects that have been awarded funding since the initiative’s inception.
385
— Number of Priority Projects begun in 2012 selected for detailed performance analysis.
$753
— Low end of the public subsidy per job created based on initial projections.
$94,000
— High end of the public subsidy per job created based on initial projections.
New York's economic development spending reached $8 billion in 2014, yet programs like the Regional Economic Development Councils lack consistent performance tracking and clear project selection criteria. State leaders continue to expand subsidies and tax breaks without sufficient evidence that these investments generate positive economic returns.
Recommendations related to Regional Economic Development Councils (REDCs)
State leaders should establish clear criteria for selecting projects funded by capital grants to ensure eligible uses are not exceptionally broad.
The state must improve performance reporting and project tracking for Regional Economic Development Councils, which are currently inconsistent and generally lacking.
Policymakers should conduct in-depth economic analyses to prove the ability of economic development programs to induce new economic activity before expanding funding.
State leaders should seek better evidence that large subsidies produce positive returns for New York before adopting new capital funding or expanding tax credit programs.
Key Data
$8 billion
— Total state and local spending for economic development activities in 2014.
$5.7 billion
— Planned capital disbursements for Empire State Development for fiscal years 2016 to 2020.
88 percent
— Increase in planned capital disbursements for Empire State Development compared to the previous five years.
$1.5 billion
— Funding allocated to the Upstate Revitalization Fund for three competitively selected upstate Regional Economic Development Councils.
$150 million
— Fifth round of capital grants provided to all Regional Economic Development Councils.
$570 million
— Net loss in tax revenue from film and TV production credits awarded in 2013 and 2014.
New York's economic development programs have grown in cost from $7.0 billion in 2010 to $8.1 billion in 2014, yet measuring their actual economic value remains difficult due to inconsistent reporting and metrics. To improve cost-effectiveness, the state must standardize performance metrics, align investments with regional strategies, and implement comprehensive disclosure requirements for all projects.
Recommendations related to Regional Economic Development Councils (REDCs)
All investments should be coordinated and aligned to regional strategies.
Performance metrics should be standardized for all programs and across all regions.
More comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed.
Increased accountability, greater transparency, and more rigorous evaluation would ensure a return on investment that taxpayers could truly value.
Key Data
$1.5 billion
— The amount of the state's windfall from bank settlements proposed for the Upstate Revitalization initiative.
$7.0 billion
— The cost of New York's economic development programs in 2010.
$8.1 billion
— The cost of New York's economic development programs in 2014.
The state's continued expansion of economic development spending, including significant capital grants for Regional Economic Development Councils, lacks sufficient evidence of a worthwhile return. A moratorium on these programs is necessary until their benefits can be carefully examined and unsuccessful initiatives are terminated.
Recommendations related to Regional Economic Development Councils (REDCs)
The state should reject proposals for increased funding for Regional Economic Development Councils (REDCs) and declare a moratorium on expansions in this area until the benefits of existing programs can be examined carefully and unsuccessful programs terminated.
Key Data
$600 million
— in capital grants provided through new Regional Economic Development Councils (REDCs) over the last four years.
$1.5 billion
— proposed from bank settlement funds for an Upstate Revitalization fund to award $500 million each to three of the seven REDCs.
$150 million
— proposed for a fifth round of capital grants to the REDCs.
$50 million
— proposed for an expansion to the State’s venture capital fund.
Regional Economic Development Councils have improved the process for allocating funds by organizing stakeholders around strategic plans, yet they struggle with inconsistent performance reporting and a lack of standardized metrics. While these councils have distributed $2.9 billion since 2011, the state needs to implement better disclosure requirements and reevaluate program effectiveness to ensure investments are truly beneficial.
Recommendations related to Regional Economic Development Councils (REDCs)
All investments should be coordinated and aligned to regional strategies.
Performance metrics should be standardized for all programs and across all regions.
More comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed.
All programs should be reevaluated for effectiveness before existing programs are increased or new ones are added.
Key Data
$2.9 billion
— Total amount awarded to Regional Economic Development Councils from 2011 through 2014.
$737 million
— Average annual amount awarded to Regional Economic Development Councils from 2011 through 2014.
110 percent
— Difference between the highest- and lowest-funded regions in the 2011 annual competition.
41 percent
— Difference between the highest- and lowest-funded regions in the 2014 annual competition.
The FY2016 Executive Budget allocates $1.5 billion to an Upstate Revitalization fund, which provides $500 million to each of three Regional Economic Development Councils. This investment is considered speculative, as the budget directs significant bank settlement proceeds toward these economic development initiatives.
Key Data
$1.5 billion
— The total amount allocated for the Upstate Revitalization fund to be distributed to Regional Economic Development Councils.
$500 million
— The amount awarded to each of the three upstate Regional Economic Development Councils.
The proposed New York State budget includes an $800 million increase in economic development spending, including $150 million specifically for Regional Economic Development Councils. While these councils have improved oversight, the state should halt further expansion of these expenditures until it can systematically justify the effectiveness of its $7 billion annual investment in business subsidies.
Recommendations related to Regional Economic Development Councils (REDCs)
New York should not increase expenditures for economic development until the State more systematically scrutinizes and justifies its subsidies for business.
The State should require projects to meet the standards of the Excelsior program and have Regional Council approval in order to receive any sales tax exemption.
Key Data
$800 million
— The amount by which the proposed budget increases spending for economic development activities.
$150 million
— The amount allocated for the Regional Economic Development Councils.
$7 billion
— The total amount spent annually in New York on economic development.
New York should freeze new funding for economic development programs until a comprehensive review confirms their effectiveness and the performance metrics established by the Regional Economic Development Councils can be fully evaluated. This approach would ensure better accountability for the billions of dollars spent annually on state economic development initiatives, including tax credits and capital grants.
Recommendations related to Regional Economic Development Councils (REDCs)
No additional funds should be authorized for economic development programs until a thorough review of all of them has been conducted to assess whether they are working and until the results of the new performance metrics put in place by the Regional Councils can be evaluated.
Key Data
$365 million
— New capital grants authorized in the last two budgets allocated through the Regional Economic Development Councils.
$7 billion
— Total amount the State and its local governments spend on economic development each year.
$2.6 billion
— Amount in credits and exemptions that reduce state taxes that have largely escaped scrutiny throughout the recession.
New York State allocates nearly $7 billion annually for economic development across dozens of programs, yet these initiatives often lack transparency and consistent performance metrics. To improve accountability and effectiveness, the state should standardize reporting, consolidate funding applications into a unified budget, and implement stricter caps on tax credit programs.
Recommendations related to Regional Economic Development Councils (REDCs)
ESD should facilitate the development and reporting of meaningful and consistent metrics across all Councils and programs.
ESD should choose approximately 10 regional indicators and 10 project indicators that all Regional Councils must report, while allowing the Councils to report additional performance measures that speak to specific Council strategies or goals.
New York’s leaders should also consider using the cap mechanism more widely to foster a more disciplined approach.
To the extent possible, ESD should facilitate the convergence and standardization of the multiple criteria and scoring methods, making them more useful for decision making.
The CFA should be expanded and should serve as the platform for a unified economic development budget, or UEDB.
Key Data
$762 million
— New York's allocation for economic development funds through Regional Economic Development Councils in 2012.
$7 billion
— Amount New York State and its local governments will spend this fiscal year on economic development through dozens of programs.
$100 million
— Cost of the new Excelsior program in tax year 2012.
$250,000
— Amount awarded to the Rubberform Recycled Products, LLC expansion project.
$4.5 billion
— Amount in tax incentives approved in Missouri since 2000 through several dozen programs.
$6.9 billion
— Total amount New York entities cumulatively spent on economic development in 2012.
The state budget includes an additional $150 million in capital grants for regional economic development councils and a new $75 million economic development fund, despite existing annual spending of $6 billion on such programs. Before committing further funds, the state should prioritize accountability, performance metrics, and evaluative analysis to identify failing programs rather than expanding a fragmented governance structure.
Recommendations related to Regional Economic Development Councils (REDCs)
Accountability for existing economic development programs should be improved before additional financial commitments are made.
Performance metrics and evaluative analysis should be systematically employed to identify failing programs for elimination or redesign before new programs are grafted onto an already fragmented governance structure.
A second round of competitive grants for regional economic development councils is premature.
Key Data
$150 Million
— The amount allocated in the budget for capital grants for regional economic development councils.
$75 Million
— The size of the newly created economic development fund.
$6 Billion
— The total annual amount spent on economic development in New York State, including capital grants, tax breaks, and direct subsidies.
New York's economic development landscape is fragmented, with hundreds of entities spending an estimated $6.6 billion annually on various incentives and tax credits. To improve outcomes, regional councils should consolidate these disparate programs, implement standardized performance metrics, and operate under a unified budget funded by cutting ineffective existing initiatives.
Recommendations related to Regional Economic Development Councils (REDCs)
The councils should have authority over all state economic development resources, not just a subset, to consolidate the fragmented organizational structure.
The state should consolidate the multiple Industrial Development Agencies (IDAs) operating in each region into one per region.
Discount power programs and other economic development programs should be fully folded into the regional councils.
Empire State Development should ensure that standard performance measures and benchmarks are used in every region to standardize performance metrics.
Benefits should be paid retroactively based on firm performance to fully avoid giveaways.
A Unified Economic Development Budget, including tax expenditures, subsidies, and local add-ons, should be prepared and released for each region to improve transparency.
Funds for the Regional Councils should be generated by reducing unsuccessful current programs rather than creating new net spending.
Key Data
$6.6 billion
— The estimated annual cost of incentives dispensed by hundreds of entities at the state and local level.
$2.5 billion
— The amount by which more than a dozen separate state tax credit programs reduce state tax receipts each year.
$1.8 billion
— The annual amount spent by seven state public authorities and six state agencies.
$1.3 billion
— The annual amount invested by municipalities in economic development.
$1.0 billion
— The annual expenditure by 107 Industrial Development Agencies and New York City.
$200 million
— The amount of newly purposed funds available for the best regional council plans.
New York's newly created Regional Economic Development Councils must be governed by strict principles to avoid the failures of past economic development programs, which were characterized by a lack of accountability and fragmented authority. To ensure effectiveness, the state should consolidate economic development resources, implement standardized performance metrics, improve transparency through a unified budget, and avoid providing additional funding to these initiatives.
Recommendations related to Regional Economic Development Councils (REDCs)
The councils should have responsibility and authority over all state economic development resources, not just a subset of selected programs.
Performance should be gauged only by new activity created in addition to baseline payroll and/or property value.
Benefits should be paid retroactively based on firm performance.
The ultimate goal should be the creation of a Unified Economic Development Budget that includes tax expenditures, direct subsidies, and benefits conferred by local entities.
No funds should be added to the program in year two, and funds for the expansion of regional council investments should be generated by reducing or eliminating current programs that are deemed unsuccessful after a thorough review.
Key Data
$6.6 billion
— Annual investment by New York's state and local governments in tax breaks and direct expenditures to spur economic development.
$2.5 billion
— Annual reduction in state tax receipts caused by more than a dozen separate state tax credit programs.
$554 million
— Cost of the Empire Zone program to the State in 2010 in lost tax receipts.
$586 million
— Amount the State invested trying to establish the Centers for Excellence program from 1997 to 2006.
$371 million
— Amount spent in grants by NYSTAR to ten funding programs over the 2001 to 2009 period.
$1.0 billion
— Amount of credits businesses reported they were carrying forward in 2007 for the Empire Zone program.
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