January 09, 2008

A $1B Upstate Strategy

By: by James M. Odato, Capitol Bureau, Times Union


ALBANY Gov. Eliot Spitzer will unveil a plan for a $1 billion Upstate Revitalization Fund in his State of the State address Wednesday, according to people who have seen a draft of the address.

The governor is also expected to disclose his interest in plans for the Division of Lottery, which is based in Schenectady, to raise new revenues.

Spitzer's upstate proposal comes in an election year when leaders in both parties are calling for a focus on improving the economy in areas of the state that have fallen on hard times, generally outside of New York City. Senate Republicans last year pitched their Upstate Now plan, calling for $3.7 billion in a 10-point program to fix the economy.

Spitzer's plan appears to have similar components. His new fund would help him pay for commitments he made last year in his City by City program. The Democratic governor traveled upstate to dispense state money to spur private investment in urban areas such as Syracuse, Utica and Rochester. The $1 billion he calls for will back up many of those pledges and many more new grants for upstate cities.

The money will also fuel investments in businesses through a Strategic Industries Fund, allow for additional spending on farms and other agricultural operations and for state park restoration projects.

The revitalization plan is expected to be a highlight in the State of the State address scheduled for 1 p.m. Wednesday in the Assembly chamber and in Spitzer's presentation at Buffalo State College on Jan. 14, his first speech on the state of upstate.

The governor will also talk about spending more on the SUNY/CUNY network, announcing the creation of an endowment fund to help pay for expenses and expansion.

He will signal support for 2,000 more faculty members at CUNY and SUNY, probably phased in over five years, as recommended by a higher education commission that reported to him last month, said two people familiar with that part of the draft.

"The failure to invest in this infrastructure will doom ourselves long-term," Spitzer told reporters outside the University at Albany's College of Nanoscale Science & Engineering after his first official visit to the $4.2 billion complex Monday. "If you do not build the best higher educational system -- if you do not invest in the intellectual foundation for the future economy -- then we will dissipate."

He may also indicate his general support for a plan unveiled by the higher education commission that calls for tuition being adjusted campus-by-campus, based on ambitions and needs. However, he was vague when asked about it Monday, stating he is "hesitant" to raise tuition "if we can avoid doing so."

Two people familiar with Spitzer's speech also said the governor wants to raise the idea of privatizing the Division of the Lottery, although the matter may be more fully explained at his budget address later this month. His Division of the Budget staff, concerned about closing a $4.3 billion budget gap, has been considering leasing to a private company all or part of the lottery operation and has also been reviewing borrowing against future lottery revenues, according to people informed of the discussions.

The governor will also talk about setting up a property tax cap to prohibit the continued growth of local taxes despite substantial state aid.

The upstate investment fund sounds like a good program, but more fundamental improvements are more important, said Brian McMahon, executive director of the New York State Economic Development Council. "Reducing taxes, energy costs, health care costs, costs that have made our business climate as poor as it is," he said.

Spitzer will also disclose his plans for legislation aimed at dealing with the problems of foreclosures and victims of mortgage scams and unfair home loans. The nine-point bill he will describe has a lender liability provision to cover abuses by brokers. writers Marc Parry and Larry Rulison contributed to this report.