Public Hearing - February 23, 2021

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 1  BEFORE THE NEW YORK STATE SENATE FINANCE
    AND ASSEMBLY WAYS AND MEANS COMMITTEES
 2  ----------------------------------------------------

 3          JOINT LEGISLATIVE HEARING

 4             In the Matter of the
          2021-2022 EXECUTIVE BUDGET ON
 5             ECONOMIC DEVELOPMENT
    
 6  ----------------------------------------------------

 7                              Virtual Hearing 
                                Conducted via Zoom
 8  
                                February 23, 2021
 9                              9:37 a.m.
    
10
    PRESIDING:
11
              Senator Liz Krueger
12            Chair, Senate Finance Committee
    
13            Assemblywoman Helene E. Weinstein
              Chair, Assembly Ways & Means Committee
14  
    PRESENT:
15
              Senator Thomas F. O'Mara 
16            Senate Finance Committee (RM)
    
17            Assemblyman Edward P. Ra 
              Assembly Ways & Means Committee (RM)
18  
              Senator Anna M. Kaplan
19            Chair, Senate Committee on Commerce, 
               Economic Development and Small Business  
20  
              Assemblyman Harry B. Bronson 
21            Chair, Assembly Committee on Economic 
               Development, Job Creation, Commerce 
22             and Industry 
    
23            Senator Diane J. Savino
              Chair, Senate Committee on Internet 
24             and Technology
    

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 1  2021-2022 Executive Budget
    Economic Development
 2  2-23-21
    
 3  PRESENT:  (Continued)
    
 4            Assemblyman Al Stirpe
              Chair, Assembly Committee on Small Business
 5  
              Assemblyman Steven Otis
 6            Chair, Assembly Committee on Science and 
               Technology
 7  
              Assemblyman Daniel J. O'Donnell
 8            Chair, Assembly Committee on Tourism, Parks, 
               Arts and Sports Development
 9  
              Senator James Skoufis
10            Chair, Senate Committee on Investigations 
               and Government Operations
11  
              Assemblyman Kenneth Zebrowski
12            Chair, Assembly Committee on Governmental 
               Operations
13  
              Assemblyman J. Gary Pretlow
14            Chair, Assembly Committee on Racing and Wagering
    
15            Senator John Liu
    
16            Assemblyman Robert Smullen
    
17            Assemblyman Billy Jones
    
18            Assemblywoman Marianne Buttenschon
    
19            Assemblyman Christopher S. Friend
    
20            Assemblyman Steve Stern
    
21            Senator James Tedisco
    
22            Assemblywoman Emily Gallagher
    
23            Assemblyman Jeffrion L. Aubry
    
24            Assemblyman Edward C. Braunstein
    

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 1  2021-2022 Executive Budget
    Economic Development
 2  2-23-21
    
 3  PRESENT:  (Continued)
    
 4            Senator George M. Borrello
    
 5            Assemblyman Robert J. Rodriguez
    
 6            Assemblyman Charles Barron
    
 7            Assemblywoman Alicia Hyndman
    
 8            Senator James Sanders Jr.
    
 9            Assemblyman William Conrad
    
10            Assemblywoman Vivian E. Cook
    
11            Assemblyman Michael Durso
    
12            Assemblywoman Sarah Clark
    
13            Assemblyman Angelo Santabarbara 
    
14            Assemblywoman Taylor Darling
    
15            Assemblyman Erik M. Dilan
    
16            Assemblywoman Deborah J. Glick
    
17            Assemblyman Kevin A. Cahill
    
18            Senator Pamela Helming 
    
19            Assemblyman Angelo J. Morinello
    
20            Assemblywoman Judy Griffin
    
21            Assemblyman Kevin M. Byrne
    
22            Assemblywoman Dr. Anna R. Kelles
    
23            Assemblywoman Jennifer Lunsford
    
24            Assemblyman Robert C. Carroll
    

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 1  2021-2022 Executive Budget
    Economic Development
 2  2-23-21
    
 3  PRESENT:  (Continued)
    
 4            Senator Roxanne J. Persaud
    
 5            Assemblyman Jeff Gallahan
    
 6            Assemblywoman Marjorie Byrnes
    
 7            Assemblyman John Lemondes
    
 8            Assemblywoman Jodi Giglio
    
 9            Senator Sean M. Ryan
    
10            Assemblywoman Jenifer Rajkumar
    
11            Assemblywoman Carrie Woerner
    
12            Assemblyman Jarett Gandolfo
    
13            Assemblywoman Rebecca A. Seawright
    
14            Assemblywoman Gina L. Sillitti
    
15  
    
16  
    
17  
    
18  
    
19  
    
20  

21

22

23

24


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 1  2021-2022 Executive Budget
    Economic Development
 2  2-23-21
    
 3                     LIST OF SPEAKERS
    
 4                                      STATEMENT  QUESTIONS
    
 5  Eric Gertler 
    Acting Commissioner
 6  New York State Department of
     Economic Development
 7  President and CEO-Designate
    Empire State Development                 13         22
 8  
    RoAnn M. Destito
 9  Commissioner            
    NYS Office of General Services
10  (OGS)                                   197        206
    
11  Mara Manus
    Executive Director
12  NYS Council on the Arts                 213        221
    
13  Christina Perry
    Member at Large
14  League of Independent Theater
         -and-
15  Joe Masher
    President
16  National Association of Theatre
     Owners of NYS (NATO)
17       -and-
    Thomas J. O'Donnell
18  President
    Theatrical Teamsters Local 817
19       -and-
    Mark Dorr
20  President
    New York State Hospitality & 
21   Tourism Association                    252        266
    
22  
    
23

24


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 1  2021-2022 Executive Budget
    Economic Development
 2  2-23-21
    
 3                     LIST OF SPEAKERS, Continued 
    
 4                                        STATEMENT  QUESTIONS
    
 5  Yana Collins Lehman
    Chair
 6  Post New York Alliance
         -and-
 7  Olympia Kazi
    Policy Advisor 
 8  NYC Artist Coalition, 
    Music Workers Alliance
 9       -and-
    Lisa Tyson
10  Director
    Long Island Progressive 
11   Coalition                              274
    
12  Norma J. Nowak, Ph.D.
    Executive Director 
13  NYS Center of Excellence in
     Bioinformatics & Life Sciences
14       -and-
    Jonathan Teyan
15  Chief Operating Officer
    Associated Medical Schools
16   of New York
         -and-
17  Mark Alessi
    Executive Director
18  Business Incubator Association
     of New York State
19       -and-
    Karen Narefsky
20  Senior Organizer for Equitable
     Economic Development
21  Association for Neighborhood 
     Housing Development (ANHD)
22       -on behalf of-
    United for Small Business NYC           289        308
23  
    
24


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 1  2021-2022 Executive Budget
    Economic Development
 2  2-23-21
    
 3                     LIST OF SPEAKERS, Continued 
    
 4                                        STATEMENT  QUESTIONS
    
 5  Ahyoung Kim
    Associate Director for 
 6   Small Business Programs
    Asian American Federation
 7       -and-
    Catherine Murcek
 8  New York City Network of 
     Worker Cooperatives 
 9   Advocacy Council
         -and-
10  Melinda Mack
    Executive Director
11  NY Association of Training
     and Employment Professionals       
12   (NYATEP)                               311        324
    
13  Tom Speaker 
    Policy Analyst
14  Reinvent Albany                         
         -and-
15  Isaac Jabola-Carolus
    Researcher
16  CUNY Graduate Center
         -and-
17  Beth Starks
    Executive Director
18  Chautauqua Lake 
     Child Care Center                      325        335
19  
    
20
    
21
    
22
    
23
    
24
    

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 1                  CHAIRWOMAN KRUEGER:  Good morning.  

 2           I'm Senator Liz Krueger.  This is the 

 3           Economic Development budget hearing for the 

 4           Executive Budget.  It is February 23, 2021.  

 5                  I'm joined by my partner in this 

 6           process, Helene Weinstein, chair of the Ways 

 7           and Means Committee of the Assembly.

 8                  Today is the 11th of 13 public 

 9           hearings conducted by the joint fiscal 

10           committees of the Legislature regarding the 

11           Governor's proposed budget for state fiscal 

12           year '21-'22.  These hearings are conducted 

13           pursuant to the New York State Constitution 

14           and Legislative Law.

15                  Today the Finance Committee and 

16           Assembly Ways and Means Committee will hear 

17           testimony concerning the Governor's proposed 

18           budget for the New York State Department of 

19           Economic Development/Empire State Development 

20           Corporation, the New York State Office of 

21           General Services, and the New York State 

22           Council on the Arts.

23                  Representing each of the agencies, I 

24           would like to welcome first Eric Gertler, 


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 1           commissioner and president and CEO of Empire 

 2           State Development; RoAnn Destito, 

 3           commissioner of the New York State Office of 

 4           General Services; and Mara Manus, executive 

 5           director of the New York State Council on the 

 6           Arts.  

 7                  Following each of their testimony 

 8           there will be time for questions from the 

 9           chairs of the fiscal committees and other 

10           legislators on either the fiscal committees 

11           or the committee of substance for the topics 

12           of that hearing.

13                  After the final question-and-answer 

14           period there will be an opportunity for 

15           members of the public to briefly testify 

16           about their views on the proposed budget 

17           under discussion.

18                  I will now introduce members of the 

19           Senate, and then Helene Weinstein, chair of 

20           Ways and Means, will introduce members of the 

21           Assembly.  

22                  And I will also be introducing Tom 

23           O'Mara, the ranker of the Senate Finance 

24           Committee, to introduce his members.  And 


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 1           Helene will do the same with 

 2           Assemblymember Ra afterwards.  

 3                  So let's see if we can figure out who 

 4           the Senators who are here yet are.  We have 

 5           Senator John Liu.  We have -- I'll keep going 

 6           through and -- Senator Diane Savino, Senator 

 7           Anna Kaplan, Senator James Sanders, 

 8           Senator -- excuse me.  Lots of 

 9           Assemblymembers.  That might be --  

10                  THE MODERATOR:  Senator Skoufis is 

11           here as well.

12                  CHAIRWOMAN KRUEGER:  Oh, thank you so 

13           much.  Senator Jim Skoufis.  

14                  I'm now going to just hand it over to 

15           Senator O'Mara to introduce our Republican 

16           Senators today.

17                  SENATOR O'MARA:  Thank you, Senator 

18           Krueger {Zoom echo}.  Hold on.  I've got two 

19           devices going at the same time.

20                  CHAIRWOMAN KRUEGER:  You're getting 

21           that double-loop feedback.

22                  SENATOR O'MARA:  Yeah.  Sorry, I had 

23           two devices going at the same time.  I was 

24           getting feedback.


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 1                  We are joined on our side of the aisle 

 2           this morning by Senator Jim Tedisco, 

 3           Senator George Borrello, and our ranker on 

 4           the Commerce Committee, Senator Michael 

 5           Martucci, at this point.

 6                  Thank you.

 7                  CHAIRWOMAN KRUEGER:  Thank you.

 8                  And why don't we pass it over to 

 9           Helene Weinstein to introduce 

10           Assemblymembers.

11                  CHAIRWOMAN WEINSTEIN:  Thank you, 

12           Senator.  

13                  So we have Assemblyman Bronson, chair 

14           of our Economic Development Committee, 

15           Assemblyman Stirpe, chair of our Small 

16           Business Committee.  Assemblyman Otis, chair 

17           of our Science and Technology Committee.  

18           Assemblyman Pretlow, chair of our Racing 

19           Committee.  Assemblymembers Aubry, 

20           Braunstein, Buttenschon, Conrad, Cook, 

21           Darling, Dilan, Glick, Griffin, Hyndman, 

22           Kelles, Lunsford, Rajkumar, Seawright, 

23           Sillitti, Stern, Woerner.  And probably a few 

24           more will be joining us shortly.  


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 1                  So why don't I turn it to Assemblyman 

 2           Ra, ranker of Ways and Means, to introduce 

 3           his members -- I see also Billy Jones, 

 4           Assemblyman Jones has joined us.  

 5                  Assemblyman Ra, why don't you 

 6           introduce your colleagues.

 7                  ASSEMBLYMAN RA:  Thank you, 

 8           Madam Chair.  Good morning, everybody.  

 9                  We are currently joined by 

10           Assemblyman Friend, who is our ranking member 

11           on the Economic Development Committee; 

12           Assemblyman Durso, who is our ranker on 

13           Science and Technology; as well 

14           Assemblymembers Morinello, Byrne, Byrnes, and 

15           Lemondes.  And I believe our ranker on 

16           Tourism, Jodi Giglio, should be joining us 

17           momentarily as well.

18                  CHAIRWOMAN WEINSTEIN:  Before I go 

19           back to the Senate, we have Assemblyman 

20           Rodriguez.  And Assemblyman Zebrowski is with 

21           us, I neglected to mention it.

22                  So now back to the Senate.

23                  CHAIRWOMAN KRUEGER:  Great.  Well, 

24           thank you very much.  


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 1                  And so, again, our first testifier 

 2           today will be the New York State Department 

 3           of Economic Development and Empire State 

 4           Development Commissioner, President and 

 5           CEO -- I guess you just couldn't decide which 

 6           title to have, so you took them all -- 

 7           Eric Gertler.  Welcome.  

 8                  You have 10 minutes to testify, and 

 9           there's a clock.  Everyone all day should be 

10           aware of the clock.  It's there for whoever 

11           is testifying.  And if you're asking 

12           questions as a legislator and the clock says 

13           you have three minutes, that means you have 

14           three minutes to ask and get the answer.  So 

15           if, you know, you decide you want to use all 

16           three minutes to give a speech, you're not 

17           actually going to get any answers from the 

18           person you are asking questions of.  

19                  I'm sorry, Eric, now I'll hand the 

20           microphone to you.

21                  ACTING COMMISSIONER GERTLER:  Not a 

22           problem.  Thank you.  Good morning, I hope 

23           you can hear me well.  Great, thank you.

24                  Good morning, Chairwoman Krueger, 


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 1           Chairwoman Weinstein, and distinguished 

 2           members of the Legislature.  My name is 

 3           Eric Gertler, and I serve as the acting 

 4           commissioner of the New York State Department 

 5           of Economic Development and as president and 

 6           CEO-designate of Empire State Development.  

 7                  Thank you for the invitation to 

 8           participate in today's hearing.  I'm honored 

 9           to appear before you virtually to discuss 

10           Governor Cuomo's fiscal year 2022 Executive 

11           Budget.

12                  One year ago I had the privilege of 

13           attending this hearing in person.  At the 

14           time, the economy of New York State was 

15           thriving.  The state, under Governor Cuomo's 

16           leadership, was experiencing a decade of 

17           historic economic growth, setting all-time 

18           highs for jobs and wages and achieving a 

19           record low unemployment rate.

20                  Shortly after I testified, COVID-19 

21           hit New York.  None of us could have 

22           predicted the pandemic which so fundamentally 

23           altered our lives in the way it did and still 

24           does today.  No one could have predicted that 


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 1           the global economy would come to a 

 2           standstill, that borders would be shut, and 

 3           that industries would be closed to prevent 

 4           the spread of a deadly pandemic.

 5                  Each one of us has been personally 

 6           affected.  We may have lost a loved one.  We 

 7           may have family who are essential workers.  

 8           Our children or grandchildren may have had 

 9           school semesters canceled.  Our constituents 

10           and friends may have lost jobs.  And we may 

11           know stores and restaurants in our 

12           communities that were forced to chose.

13                  The pandemic has also altered the 

14           day-to-day work at ESD.  Throughout the 

15           agency's history it has been focused on 

16           growing the economy, but when COVID-19 first 

17           struck, we were called upon to issue guidance 

18           that would impact large portions of the 

19           state's economy.  It broke our heart.  But 

20           curtailing economic activity to reduce and 

21           minimize the virus's spread was a critical 

22           component in the state's public health 

23           effort.  

24                  To this end, before discussing the 


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 1           proposed budget I'd like to share some of the 

 2           ways that ESD assisted the state's public 

 3           health efforts to combat the coronavirus.  

 4           First, shutting down the state's economy was 

 5           unprecedented, and ESD was tasked with 

 6           developing essential business guidance and 

 7           working directly with tens of thousands of 

 8           New York State businesses to determine 

 9           whether they could remain open and how to do 

10           so safely.  

11                  Second, while the economy was shutting 

12           down, the state's need for critical medical 

13           supplies was skyrocketing.  To address this 

14           need, Governor Cuomo issued a call to action 

15           for in-state manufacturers to retool or scale 

16           up their operations to produce COVID-related 

17           products like personal protective equipment.  

18           As a result, ESD has awarded more than 

19           $20 million in grants to 36 New York-based 

20           companies.

21                  Third, beginning in May ESD was called 

22           upon to help implement the state's phased 

23           reopening plan.  Beyond providing guidance on 

24           state policies to the business community, we 


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 1           helped launch the New York Forward Business 

 2           Reopening Wizard, allowing businesses to 

 3           instantly determine their reopening status, 

 4           identify industry-specific health and safety 

 5           guidance, and complete a business safety 

 6           plan, generating more than 550,000 business 

 7           searches.  

 8                  In addition to these and other ESD 

 9           efforts to support the state's public health 

10           response, our team was equally focused on 

11           protecting and preserving the state's 

12           economy.  

13                  Understanding that small businesses 

14           are 98 percent of all businesses in New York 

15           State, and employ more than half of our 

16           private-sector workforce, ESD launched 

17           several efforts to help the survival and 

18           growth of small businesses across the state.  

19           We provided $7.5 million in grants to 

20           nonprofit organizations, helping small 

21           businesses access federal assistance.  We 

22           launched a $100 million New York Forward Loan 

23           Fund.  We provided $21 million of loan 

24           capital to Community Development Financial 


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 1           Institutions to provide Paycheck Protection 

 2           Program -- PPP -- loans.  We launched Empire 

 3           State Digital, a first in the nation 

 4           partnership to help small businesses and 

 5           restaurants to grow their online presence.  

 6           We partnered with Diageo North America for 

 7           the "Raising the New York State Bar" 

 8           Restaurant Recovery Fund, awarding more than 

 9           $3 million in grants.  We announced the 

10           New York Forward Small Business Lease 

11           Assistance Partnership to help commercial 

12           landlords and tenants reach mutually 

13           beneficial lease workouts.  

14                  Additionally, in the face of disparate 

15           race-and-gender-based COVID impacts on our 

16           workforce, the role of ESD's Division of 

17           Minority and Women's Business Development 

18           became even more important.  In addition to 

19           providing MWBEs with as much COVID-specific 

20           support as possible, the division hosted the 

21           annual MWBE forum virtually this December, 

22           with more than 2,200 registrants.  

23                  While many at ESD pivoted to support 

24           the state's public health and economic 


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 1           responses, other members of our team 

 2           continued to advance important existing 

 3           projects.  After decades of delays, Moynihan 

 4           Train Hall was completed on-time and 

 5           on-budget.  We completed the topping-off of 

 6           the new Belmont Arena on Long Island, and of 

 7           Cree's semiconductor fab plant in the Mohawk 

 8           Valley.  We worked with Beam Suntory to 

 9           relocate their global headquarters from 

10           Chicago to Madison Avenue in Manhattan, and 

11           supported the expansion of in-state 

12           businesses like Plug Power, which will build 

13           a new gigafactory in the Finger Lakes.  

14                  Recent economic data reflects this 

15           progress, with private-sector jobs growing in 

16           New York State every month from April to 

17           November and the statewide unemployment rate 

18           improving faster than the U.S. in recent 

19           months.  With the support of our legislative 

20           leaders, New York can and will rebuild.  

21                  As outlined in the Executive Budget, 

22           "Building Back Better" begins with funding 

23           additional rounds of the Regional Economic 

24           Development Council and Downtown 


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 1           Revitalization initiatives, flagship programs 

 2           that will focus on rebuilding communities and 

 3           supporting impacted industries.

 4                  To help jump-start New York's economy, 

 5           the Governor has also proposed the new 

 6           Pandemic Recovery and Restart Program, 

 7           offering $130 million to help small 

 8           businesses recover from the pandemic and 

 9           bring back jobs to New York.

10                  New York State has already invested 

11           nearly $500 million to expand broadband 

12           internet access to 98 percent of the state, 

13           which proved crucial during the COVID-19 

14           pandemic.  To ensure affordable broadband 

15           options for all, the Governor has proposed a 

16           first-in-the-nation initiative requiring 

17           internet service providers to offer an 

18           affordable $15-per-month high-speed internet 

19           plan to all low-income households.

20                  The COVID-19 pandemic has also 

21           highlighted how a lack of access to 

22           affordable childcare can disrupt families and 

23           force caregivers, primarily women, to choose 

24           between their career and providing daytime 


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 1           care for their child.  To help support 

 2           working parents, the Executive Budget 

 3           strengthens childcare programs, enacts 

 4           employer childcare credits, and improves 

 5           childcare affordability.  

 6                  At ESD, the Excelsior Jobs Program 

 7           would be enhanced to encourage recipients to 

 8           invest in childcare facilities and provide 

 9           childcare services to workers.

10                  The Executive Budget also advances the 

11           Empire Station Complex by capitalizing on the 

12           momentum generated by the recently completed 

13           Moynihan Train Hall, furthering Penn 

14           Station's expansion and reconstruction and 

15           extending the High Line elevated park to 

16           provide seamless access from Moynihan.

17                  To accelerate the tourism industry's 

18           recovery, the Governor has proposed a 

19           Rediscover New York campaign, while the 

20           New York PopsUp initiative will safely revive 

21           the struggling live entertainment sector.

22                  As a state we have faced remarkable 

23           challenges this year, but together with our 

24           legislative partners we will continue to 


                                                                   22

 1           build our economy back better, stronger and 

 2           more resilient, using a strategy built on 

 3           four pillars -- creating vibrant communities, 

 4           developing our workforce and small 

 5           businesses, incentivizing the growth of 

 6           export-oriented industries, and fostering 

 7           innovation to create the jobs of the future.

 8                  I thank you for your time and the 

 9           opportunity to speak this morning.  I am 

10           joined today by Kevin Younis, our chief 

11           operating officer, and Pravina Raghavan, 

12           ESD's EVP of small business services, and we 

13           are happy to take your questions.  Thank you.

14                  CHAIRWOMAN KRUEGER:  Thank you very 

15           much.  

16                  And our first questioner will be chair 

17           of the Economic Development Committee, 

18           Senator Anna Kaplan.

19                  SENATOR KAPLAN:  Thank you, Chairwoman 

20           Liz Krueger.  

21                  Good morning, Commissioner.  Thank you 

22           so much for your testimony.

23                  ACTING COMMISSIONER GERTLER:  Good 

24           morning.


                                                                   23

 1                  SENATOR KAPLAN:  I can tell you that 

 2           I've been discussing this with a lot of my 

 3           colleagues, and CATs and COEs is something 

 4           that is on everyone's mind.  And I can tell 

 5           you also that I personally have visited some 

 6           of these CATs and COEs and have seen 

 7           firsthand the great work that they do.  And 

 8           of course it's a partnership between the 

 9           centers, private, and the public.

10                  The Executive Budget proposes to 

11           consolidate CATs and COEs into a single 

12           program.  And COEs will be made into CATs for 

13           two years, and then all programs will compete 

14           for spots, and I think a much reduced number 

15           of spots.  Can you discuss that and what is 

16           the rationale for eliminating some of these 

17           centers, since they really do a great job and 

18           they also -- not only do they do a lot of 

19           good research and come up with different 

20           products that are made in New York, but also 

21           hire a lot of people throughout the state.  

22                  ACTING COMMISSIONER GERTLER:  Thank 

23           you, Senator.

24                  As you know, no one has championed 


                                                                   24

 1           innovation more than Governor Cuomo.  And 

 2           innovation is an important part of the state 

 3           economic development strategy.  And these 

 4           centers are obviously very important for 

 5           innovation.  And as you know, this was 

 6           something that I also discussed with this -- 

 7           at this hearing last year.

 8                  Here's how we are looking at it and 

 9           why we want to, in a sense, move the COEs 

10           into CATs.  You know, at a time when things 

11           are much more competitive, we want to make 

12           sure that we're aligning resources in the 

13           best possible way for these centers.  

14                  We also want to make sure that we have 

15           predictability and stability with a 10-year 

16           designation, as opposed to annual 

17           designations.  I mean, we are living -- 

18           working in a knowledge economy that makes 

19           things that much more difficult, that much 

20           more competitive.  We want to make sure that 

21           these centers are aligned with the 

22           universities and with industry in a way that 

23           allows them to be the most effective 

24           possible.


                                                                   25

 1                  As you said, as part of this proposal 

 2           what we are intending to do is having the 

 3           COEs be designated for two years before they 

 4           then compete for these then 10-year 

 5           designations.  And that is the reasoning 

 6           behind the proposal.  We want to right-size 

 7           these centers, we want to align them with 

 8           those interests of security, stability, 

 9           giving them the ability to provide the most 

10           effective way to be the most successful in a 

11           very competitive economic environment.  Thank 

12           you.

13                  SENATOR KAPLAN:  Thank you.  Thank 

14           you.  So the CATs and COEs are by design 

15           meant to enhance each region, each region's 

16           cultural and technical competencies.  So for 

17           example, Rochester has a CAT in data science; 

18           Alfred has a Center of Excellence in 

19           ceramics; UAlbany has a Center of Excellence 

20           in weather.  

21                  Given these different specialties, 

22           what metrics would be used to determine the 

23           winners?

24                  ACTING COMMISSIONER GERTLER:  Sure.  


                                                                   26

 1           The -- you know, I'm also joined by Pravina 

 2           Raghavan, from Small Business; I'm going to 

 3           call on her in a second.  But, you know, 

 4           certainly the idea is to ensure that, you 

 5           know, through the competitive process we are 

 6           making sure that we are awarding those 

 7           designations to those that we think will 

 8           ultimately be the most effective in providing 

 9           the types of technologies and providing the 

10           right effectiveness, you know, in their 

11           specific areas.

12                  Pravina, can you please also add to 

13           that?

14                  ESD EVP RAGHAVAN:  Sure.

15                  Good morning, Senator Kaplan.  

16                  The similar process we have now for 

17           CATs, which is a competitive RFP process 

18           which allows us to look at all the proposals, 

19           the proposals are vetted exactly the same, 

20           which look at both technology, job growth, as 

21           well as private partnership.  It would be no 

22           different from what we do now for the 

23           existing CATs, for the COEs.  

24                  And we really do also include experts 


                                                                   27

 1           as well into that analysis.  So it's not just 

 2           by state officials, it's also an expert panel 

 3           that works with us to do the RFP and scoring.  

 4           And we wouldn't move that process because 

 5           it's been working very well with our CATs.  

 6           We would just be enveloping the COEs into the 

 7           same -- similar process.

 8                  SENATOR KAPLAN:  Thank you.

 9                  ACTING COMMISSIONER GERTLER:  Thank 

10           you, Pravina. 

11                  And the centers are currently split 

12           between public and private schools.  Would 

13           that split be maintained under the new 

14           program?

15                  ACTING COMMISSIONER GERTLER:  So, you 

16           know, again on this, you know, I'm going to 

17           have Pravina also, you know, add to -- 

18           elaborate on that.

19                  ESD EVP RAGHAVAN:  Yeah, the -- we 

20           would keep the same type of split to ensure 

21           that we have also regional penetration as 

22           well as different universities.  

23                  And it's important to ensure that 

24           these universities also get that private 


                                                                   28

 1           support, because that's what makes these 

 2           programs different from programs across the 

 3           country.

 4                  SENATOR KAPLAN:  I agree.  And I think 

 5           we should really keep all of them, because I 

 6           think they all do great work.

 7                  And I have more questions, but I would 

 8           also like to go now -- address the MWBE.  I 

 9           know that we've seen a lot of MWBEs have been 

10           really affected by this pandemic and have 

11           really been suffering.  And we have the 

12           program to help a lot of the minority and 

13           women-owned businesses.  

14                  I want to know why at this point we're 

15           trying to take -- give them a cut where they 

16           actually -- this is one program that really 

17           could use more funding, not giving them the 

18           cut that they are getting right now.  

19                  Could you address that a little bit 

20           for me?

21                  ACTING COMMISSIONER GERTLER:  Of 

22           course.  

23                  You know, again, as far as our overall 

24           economic development strategy, and as you 


                                                                   29

 1           know, championed by the Governor, we want to 

 2           make sure that everybody can participate in 

 3           our New York State economy.  And, you know, 

 4           if anything, if we look at our results, we've 

 5           had really successful results in terms of our 

 6           MWBE program.  

 7                  On a high level, just to give you some 

 8           of the high-level data, you know, we've had a 

 9           29.5 percent participation rate, we've had 

10           over $3 billion in contracts.  These are 

11           nation-leading numbers.

12                  We also in a sense were a victim of 

13           our own success.  We have, you know, many 

14           MWBE firms, 1400 per year that are looking to 

15           apply.  And we have actually put in, you 

16           know, additional ways to speed up that 

17           process.  We've streamlined the application, 

18           we've added staffing resources, you know, to 

19           that to make sure to make that easier and 

20           faster.  

21                  And, you know, we think that the 

22           funding that we have right now, you know, is 

23           sufficient to continue the successes that 

24           we've had.  


                                                                   30

 1                  I might also note that we've brought 

 2           on a very critical hire for our MWBE 

 3           division, a new executive director has 

 4           joined.  And we will continue to focus and 

 5           improve and ensure that MWBEs who have 

 6           really, you know, faced disproportionate 

 7           impacts from this COVID will be the primary 

 8           focus, and we'll continue to do all that we 

 9           can for MWBE firms.

10                  SENATOR KAPLAN:  Thank you.

11                  That is definitely on everyone's mind 

12           in our conference, and we want to make sure 

13           that we help those minority and women-owned 

14           businesses, small businesses that have been 

15           impacted, get the help that they need.

16                  I have one other question with respect 

17           to MWBE.  What is the status of rules and 

18           regulations for personal net worth amended as 

19           a result of Chapter 96 in 2019?  If you 

20           remember, some industries needed a higher net 

21           worth, possibly, to be able to do what they 

22           were doing.  

23                  Can you address that?

24                  ACTING COMMISSIONER GERTLER:  Correct.  


                                                                   31

 1           So on a high level, as you know, in that 

 2           program we need to have a certain level of 

 3           net worth in order for, in a sense, companies 

 4           to graduate, you know, out of that program.  

 5                  You know, my understanding is that we 

 6           recently raised, you know, that to $15 

 7           million.  We're now ongoing, engaging a 

 8           vendor to conduct a study.  And, you know, 

 9           it's obviously an important area that we need 

10           to continue to focus on, because we want to 

11           make sure that we have as many MWBEs being 

12           able to participate in the program.  

13                  SENATOR KAPLAN:  Thank you.  I see my 

14           time is up; thank you again for answering my 

15           questions.

16                  ACTING COMMISSIONER GERTLER:  Thank 

17           you so much.

18                  CHAIRWOMAN KRUEGER:  Thank you.

19                  Assembly.  

20                  CHAIRWOMAN WEINSTEIN:  So we are going 

21           to go to Assemblyman Bronson, the chair of 

22           the Assembly Economic Development Committee, 

23           for 10 minutes.

24                  ASSEMBLYMAN BRONSON:  Thank you, 


                                                                   32

 1           Chair.  

 2                  And thank you, Commissioner, for being 

 3           here today.  I look forward to working with 

 4           you in my new capacity as chair of the 

 5           Economic Development Committee.

 6                  You know, I'm going to echo the 

 7           sentiments of the Senator in connection with 

 8           the Centers for Advanced Technology and the 

 9           Centers of Excellence.  These programs have 

10           been proven to be job creators, they provide 

11           an educational service to our students, and 

12           they're located in colleges and university 

13           campuses across the state, as was noted, both 

14           private and public.  You know, and they've 

15           done so -- continued to provide the 

16           service -- while enduring cuts here and there 

17           over the years.  

18                  So I think we should not be tinkering 

19           with those programs right now, especially in 

20           the midst of COVID-19.  So not a question 

21           there, but a statement of where I think we 

22           should be as we go through budget 

23           negotiations.

24                  I really want to hone in, though, on 


                                                                   33

 1           the past year.  And you know to contain the 

 2           spread of COVID-19 and to protect the lives 

 3           of New Yorkers, many measures have been 

 4           implemented and continue in 2021, albeit with 

 5           adjustments that have really devastated the 

 6           state's economy and have had a real impact on 

 7           our families throughout the state -- 

 8           unemployment records through the roof, 

 9           actually.

10                  Businesses have endured state-mandated 

11           shutdowns, they have had their capacity and 

12           operational restrictions given on them, costs 

13           associated with COVID-19.  All of this has 

14           really impacted the economy.  And I get it, 

15           because we wanted to protect and keep our 

16           families healthy.

17                  What I really want to know is in the 

18           budget as proposed by the Governor, in our 

19           area, what can you identify as the key 

20           components that will help us retain and 

21           create jobs, will meet the needs of our 

22           families from an employment standpoint and 

23           mend our economy, particularly in an 

24           inclusive way, to ensure communities of color 


                                                                   34

 1           and other marginalized individuals can fully 

 2           participate in the economic recovery.

 3                  So, you know, overall, what's the 

 4           strategy that is in the Executive's budget?

 5                  ACTING COMMISSIONER GERTLER:  So, you 

 6           know, first of all let me, you know, echo 

 7           what you said.  It has been a very 

 8           challenging year.  We know that many 

 9           individuals, employees, businesses have been 

10           affected.  I have talked to many, you know, 

11           businesses, employees, presidents, workers, 

12           and it's been tough, it's been tough 

13           everywhere.  

14                  And so, you know, we think that we 

15           have a budget that helps New York State 

16           continue in its recovery and help to rebuild 

17           this economy.  If we go back to before COVID 

18           started, and in fact we go back to the month 

19           before COVID, we were seeing an economy that 

20           was showing record private employment and 

21           record unemployment.  So, you know, this is 

22           an economy that has been built up under the 

23           Governor to the point of being incredibly 

24           successful prior to COVID.  


                                                                   35

 1                  You know, now there's a number of 

 2           different focuses that we need to have.  

 3           First of all, we need to focus on small 

 4           businesses.  Small businesses, you know, 

 5           represent the backbone of our economy:  

 6           98 percent of businesses are small 

 7           businesses.  And I can assure you that we 

 8           have a number of programs to help with small 

 9           businesses.  I identified a number of those 

10           during my testimony.  

11                  You know, we have used -- you know, 

12           for example, we created the New York Loan 

13           Fund that has been helping not just small 

14           businesses but MWBE firms, which are also 

15           critically important, who have also received 

16           a disparate impact from COVID.  

17                  And many of those small business 

18           programs, they will -- you know, they will 

19           continue.  We talked about the MWBE efforts 

20           that we're making, and we're going to 

21           continue to focus on MWBEs.  We're going to 

22           continue to focus on businesses that have not 

23           been able to get the same access to capital, 

24           that have not been able to get the same 


                                                                   36

 1           resources.  Those are important components of 

 2           our strategy.  

 3                  I'd also like to cite the Governor's 

 4           infrastructure program -- largest 

 5           infrastructure program in the country, over 

 6           $300 billion.  We've seen the success of that 

 7           infrastructure program with the building of 

 8           bridges, airports, Moynihan Train Hall, which 

 9           was completed on January 1st of this year, it 

10           opened to the public.  All of those projects 

11           add thousands of construction jobs, providing 

12           new opportunities to workers.  

13                  We're also going to continue to ensure 

14           that -- you know, that we see as much money 

15           from the federal government.  You know, as 

16           the Governor has said at many of his press 

17           conferences, we were ground zero, we were the 

18           epicenter of COVID, and we expect fair 

19           funding for our budget, that as well, to help 

20           the state government put money into important 

21           institutions throughout the state.  

22                  And then lastly -- and I could 

23           obviously continue and go on and on, but I 

24           think, you know, the return in funding of our 


                                                                   37

 1           Regional Economic Development Councils -- we 

 2           have had a very successful economic program 

 3           whereby we've seen a bottoms-up approach from 

 4           the regions throughout the state.  

 5                  I mean, just one statistic, there's a 

 6           case where over the last, you know, 10 years 

 7           or so we've invested about $7 billion, over 

 8           8,000 projects, and seen a return of 

 9           $18 billion.  That is money well spent.  

10           Those are investments well spent.  And we 

11           think with all of those programs, and 

12           adhering to ESD's, you know, mission and our 

13           four-points mission of workforce development, 

14           livable communities, incentivizing export 

15           industries, and investing in innovation, that 

16           is the formula for making sure that we're 

17           going to see a return to the economy that we 

18           had before COVID.

19                  ASSEMBLYMAN BRONSON:  So -- and thank 

20           you for that response.  You know, I'd like to 

21           hone in a little bit, though.  You mentioned 

22           98 percent of our businesses are small 

23           businesses.  I'm not sure exactly what you'll 

24           define as small businesses.  I'll use a 


                                                                   38

 1           hundred or less employees.  

 2                  But the -- you know, the Regional 

 3           Economic Development Councils, which I'm 

 4           supportive of -- you know, but they leave out 

 5           small businesses.  I mean, they -- you know, 

 6           small businesses aren't at the table for the 

 7           most part.  They're not included in the 

 8           decision-making processes, generally 

 9           speaking.  And frankly, I'm not sure if 

10           relying on that program and some of the 

11           historical programs are really going to get 

12           to the need for a full recovery of small 

13           businesses.  

14                  How do you see REDC and, you know, 

15           Downtown Revitalization and some of the other 

16           programs -- how do you see them actually 

17           having a direct impact on these small 

18           businesses?

19                  ACTING COMMISSIONER GERTLER:  Right.  

20           So, you know, two parts to your question.  I 

21           will come back to -- on the REDC very 

22           quickly, because if I understood correctly, 

23           you also asked about other programs.  

24                  And, you know, we're also putting 


                                                                   39

 1           forward a $130 million pandemic recovery 

 2           program that -- you know, $50 million for 

 3           restaurants, $50 million for small businesses 

 4           and $30 million for musical and theatrical 

 5           tax credits.  You know, those also are a 

 6           means by which we will continue to help the 

 7           economy recover.  There's money coming from 

 8           the federal government as well.

 9                  You know, in terms of, you know, the 

10           REDCs, you know, as we -- and through those 

11           programs, investing in the, you know, 

12           regional projects, those are with those who 

13           are on the ground who are identifying, you 

14           know, the best, most effective projects.  And 

15           businesses, small businesses help in any 

16           number of ways.  Even if it's focused on a 

17           much larger project, there are construction 

18           jobs, there are, you know, contracts related 

19           to that.  There's investments in small 

20           businesses as well.  There's any number of 

21           ways that allow us to rely on these -- on 

22           these REDCs who are focusing on, you know, 

23           what they feel is best for their regions.  

24                  You know, and that's why the success 


                                                                   40

 1           of it as a bottoms-up economic development 

 2           strategy.

 3                  ASSEMBLYMAN BRONSON:  Yeah, I respect 

 4           that.  I do think, though, we have to 

 5           acknowledge that a lot of the small 

 6           businesses in our communities throughout 

 7           these regions aren't fully participating in 

 8           that process, and we need to correct that.

 9                  So thank you, Commissioner.

10                  ACTING COMMISSIONER GERTLER:  Thank 

11           you, sir.

12                  CHAIRWOMAN WEINSTEIN:  Before we go to 

13           the Senate, I just wanted to acknowledge 

14           we've been joined by Assemblymembers 

15           Gallagher, Barron and Fahy.  

16                  So now to the Senate.

17                  CHAIRWOMAN KRUEGER:  Thank you very 

18           much.

19                  I'm looking quickly.  I think we've 

20           been joined by Senator Martucci and 

21           Senator Sanders -- I think I mentioned him 

22           earlier.  If there are other Senators here, 

23           you know, let me know and I'll introduce you 

24           a little later.


                                                                   41

 1                  Our next questioner is the chair of 

 2           Internet and Technology, Diane Savino.

 3                  SENATOR SAVINO:  Thank you, 

 4           Senator Krueger.  

 5                  Good morning, Commissioner.

 6                  ACTING COMMISSIONER GERTLER:  Good 

 7           morning.

 8                  SENATOR SAVINO:  Nice to see you.

 9                  I also want to echo the comments made 

10           by Senator Kaplan and Chair Bronson with 

11           respect to the CATs and the COEs.  I love 

12           that.  It sounds great, CATs and COEs.

13                  I want to talk a bit about the 

14           economy.  As you know, we watched it shut 

15           down, literally, during the pandemic.  No one 

16           ever thought we'd see New York City, let 

17           alone New York State, come to a grinding 

18           halt, but we did.  It was necessary to 

19           achieve what we had to do, which was reduce 

20           the spread.

21                  Getting people to work from home, 

22           getting children to remote learning -- and 

23           none of it would have been possible had it 

24           not been for the internet.  We wouldn't have 


                                                                   42

 1           been able to do anything.  Businesses 

 2           literally would have come to a grinding halt.  

 3           But we were able to shift people to remote 

 4           learning, remote work, because of the 

 5           internet.  And thank God for that.  

 6                  But one of the things we're still 

 7           failing at across the state is broadband 

 8           access.  You know, the FCC a couple of years 

 9           ago awarded $20 billion to fully fund 

10           broadband across rural regions.  As you know, 

11           originally New York did not -- was not 

12           eligible for that because we had a faulty 

13           data analysis that said that we had 

14           98 broadband coverage across the state when 

15           we really didn't.

16                  I know the Governor is proposing in 

17           his budget that there will be a $15 a month 

18           broadband service -- by the way, that already 

19           exists, in case people don't know that.  The 

20           large internet service providers already 

21           provide a discounted rate for people.  People 

22           don't seem to know that.

23                  But what I'm trying to figure out is 

24           what can we do to actually achieve 


                                                                   43

 1           100 percent broadband across the state, 

 2           including in the rural regions, because we're 

 3           failing at that.  And until we achieve that, 

 4           we're really not going to be able to, you 

 5           know, close that gap for so many people.

 6                  ACTING COMMISSIONER GERTLER:  So, you 

 7           know, thank you for that.  

 8                  You know, let me say at the onset that 

 9           as you rightfully pointed out, when we had to 

10           close down this economy to deal with a public 

11           health crisis, that was truly heartbreaking.  

12           You know, we're an agency focused on job 

13           growth.  We're an agency focused on business 

14           attraction.  We're an agency focused on 

15           infrastructure, building, helping provide 

16           increased skills to individuals.

17                  So I can tell you both as an agency 

18           and personally, and as someone who, you know, 

19           has been an entrepreneur, that closing down 

20           the economy and not letting these businesses 

21           thrive has been -- was very difficult.  And 

22           we know that many have struggled over the 

23           last year.

24                  You know, broadband, as you rightfully 


                                                                   44

 1           point out, is critical.  It's even more 

 2           critical today.  That has been the way by 

 3           which people have had to, you know, engage at 

 4           school, it's been a way that people have had 

 5           to work.  And as we're learning, it's the way 

 6           that we're now doing some of our public 

 7           hearings.

 8                  The positive part and the fortunate 

 9           part for New Yorkers is that the Governor 

10           started to look and -- look at initiatives to 

11           expand our broadband access about four to 

12           five years ago with creating the 

13           Broadband Office, which is here at ESD.  And 

14           with -- you know, with that it was really way 

15           ahead of the curve and, you know, enabled 

16           New Yorkers to have much better access than 

17           many other parts of this country, if not all 

18           parts of the country.

19                  And, you know, at a time of crisis 

20           when you have so many people on the same 

21           network, obviously there can be some issues.  

22           But let me -- let me respond to your numbers.  

23           At present we have a commitment to 

24           99.9 percent availability of broadband 


                                                                   45

 1           throughout the state.  You know, that 

 2           represents -- of that, 99 percent of that is 

 3           critical fiber, you know, infrastructure.  We 

 4           have completed 98 percent of the work to date 

 5           in terms of our broadband access.  

 6                  And, you know, even in places where -- 

 7           in rural areas where it's been hard to reach 

 8           or, you know, third parties have not wanted 

 9           to provide access, we have done two things.  

10           We have ensured that there is satellite 

11           access, so at least there's 25 megabits per 

12           second access to broadband.  And we've also 

13           worked with the federal government to get 

14           $100 million to deploy for rural access.  

15                  And then lastly, you know, you're 

16           correct, we are putting forward a program for 

17           $15 a month for low-income families.  

18           Everybody should have access.  You know, 

19           based on our numbers we think now -- and 

20           based on the efforts of our team -- we really 

21           have, you know, gotten to the point where 

22           it's not so much about access and 

23           availability now, it's now about 

24           affordability.  And we need to make sure that 


                                                                   46

 1           there's not the continuing divide.  And 

 2           that's why we want to make sure that 

 3           low-income families can also access 

 4           broadband.

 5                  SENATOR SAVINO:  Well, I think we all 

 6           agree with that.  But if you would speak to 

 7           Altice -- which is Optimum -- if you'd speak 

 8           to Spectrum and Verizon, they will tell you 

 9           they have a low-income option.  For some 

10           reason or other, there is not enough 

11           widespread information about it.  And many -- 

12           what we found during the pandemic is many 

13           people were getting access to the internet 

14           especially through their phones, through 

15           their phone carriers, and so they didn't 

16           think that they needed to purchase additional 

17           coverage.  But that's a discussion for a 

18           different day.  

19                  I want to shift to a different topic 

20           in the few minutes I have left with respect 

21           to the hospitality industry.

22                  I'm, you know -- as we all know, the 

23           restaurant and hospitality industry has been 

24           crippled by this pandemic, and many of them 


                                                                   47

 1           are never going to recover.  There are many 

 2           restaurants that will never come back.  And I 

 3           know that you've spoken about a loan program 

 4           and a -- what is it, a $50 million loan 

 5           program.  Many of the restaurants, they don't 

 6           need more loans.  What they need are grants.  

 7                  So what can we do to provide direct 

 8           relief to restaurants?  I have a piece of 

 9           legislation that I've introduced that would 

10           create a grant program funded through a fee 

11           placed upon the commercial general liability 

12           coverage carriers, who quite frankly have not 

13           paid out a single claim of business 

14           interruption insurance on any of these 

15           restaurants.  

16                  We also are very concerned about the 

17           excessive fines that have been placed on many 

18           of the restaurants by the State Liquor 

19           Authority.  So with the one hand the 

20           government will give a grant, and with the 

21           other hand they'll issue a fine.

22                  So what can we do to help these 

23           restaurants get back up on their feet, and 

24           also our seasonal industries?  You know, I 


                                                                   48

 1           represent Coney Island.  The Governor has 

 2           only just last week announced that Coney 

 3           Island will be able to reopen on April 9th.  

 4           It has been closed for 19 months.  And they 

 5           could not really qualify for some of the 

 6           federal assistance because of the seasonal 

 7           nature of their workforce.  They didn't 

 8           qualify for the full PPP money.

 9                  So what can we do to help these types 

10           of industries that have really been so 

11           devastatingly affected by the pandemic?

12                  ACTING COMMISSIONER GERTLER:  Right.  

13           Well, you know, let me first echo your 

14           comments.  We have seen, you know, many small 

15           businesses, certainly these restaurants, that 

16           have absolutely struggled over the past year.  

17           And, you know, our heart goes out to these 

18           businesses, to the workers.  And, you know, 

19           as you know, the restaurants are not just 

20           places of work, they also add to the culture 

21           and the life and the diversity of what we 

22           offer in New York State and what makes 

23           New York State so special.

24                  So -- so you're right, we do need to 


                                                                   49

 1           help restaurants get back to work.  And we 

 2           have a number of different programs.  You 

 3           know, first of all, I might add before 

 4           discussing one of the programs that the 

 5           Governor has announced over the last number 

 6           of weeks, you know, the reopening of 

 7           restaurants, you know, indoor dining, some of 

 8           the amusement parks now are starting to 

 9           open -- still at limited capacity, because we 

10           still need to balance what is a public health 

11           crisis with an economic, you know, recovery.

12                  So one program which we are proposing 

13           is what we call a Restaurant Return to Work 

14           Tax Credit.  And this is focused on those 

15           restaurants that faced additional 

16           restrictions during the COVID crisis.  These 

17           are the restaurants in New York City that 

18           were closed down or those in Orange or 

19           Red Zones.  And in this case, these are tax 

20           credits so that we can help these restaurants 

21           bring their workers back.  There's a formula 

22           that can be used that shows the difference 

23           between their low point and when they're 

24           hiring people.  


                                                                   50

 1                  But essentially what it is is that 

 2           it's a $5,000 credit per employee, up to 10, 

 3           so up to $50,000 for each of these 

 4           restaurants.  There's a way to fast-track 

 5           that, because we do want to get these 

 6           restaurants, you know, back online.

 7                  You know, it's -- it really is -- you 

 8           know, it really is critical.  And look, I 

 9           also hope that, you know, as the weather gets 

10           better, you know, people will also go to 

11           these restaurants.  As the vaccines increase 

12           and people maintain social distances, they 

13           can do so in a safe way, because we still do 

14           have a public health crisis ongoing.

15                  SENATOR SAVINO:  Thank you.  Perfect 

16           timing.

17                  CHAIRWOMAN KRUEGER:  Thank you.  

18           Perfect timing indeed.

19                  Assembly.

20                  CHAIRWOMAN WEINSTEIN:  Let's -- 

21           Assemblyman Stirpe, do you have questions?  

22                  So we'll go to Assemblyman Stirpe for 

23           10 minutes.

24                  ASSEMBLYMAN STIRPE:  Thank you, 


                                                                   51

 1           Helene.  Good morning, Commissioner.  How you 

 2           doing?

 3                  ACTING COMMISSIONER GERTLER:  Good 

 4           morning, sir.  How are you this morning?  

 5                  ASSEMBLYMAN STIRPE:  Okay.  

 6                  As chair of the Small Business 

 7           Committee, I really appreciate your previous 

 8           statement that New York really needs to focus 

 9           on small business.

10                  And just a couple of comments.  My 

11           previous chair of Economic Development, 

12           Harry, had asked some questions about the 

13           REDC.  And I asked some of those questions 

14           last year, and I was told that 70 percent of 

15           loans and grants and things go to small 

16           businesses.  I'm not real sure what that -- 

17           how you categorize those small businesses, 

18           because I know most of the businesses in 

19           Central New York that got those kinds of 

20           grants, and they're companies usually called 

21           mid-size companies.  You know, there's 

22           hundreds of employees, et cetera, that are 

23           there.

24                  So, you know, my question about that 


                                                                   52

 1           or my comment is I know the people who make 

 2           up the REDC, you know, committees, and 

 3           they're usually captains of industry.  

 4           There's a few labor representatives, because 

 5           there's construction involved and stuff like 

 6           that.  But if you could tell me how many 

 7           members of REDC commissions are successful 

 8           coffee shop owners or daycare providers or 

 9           people like that, that may have more insight 

10           into real small businesses and how we can 

11           help them and what projects would make them 

12           more successful.  Any idea?

13                  ACTING COMMISSIONER GERTLER:  Sure.  

14           And I'm going to give you some context and 

15           then I'm going to have our chief operating 

16           officer, Kevin Younis, add to that.

17                  But, you know, as you point out and 

18           I've said before -- I don't want to spend, 

19           you know, a lot of time, small businesses are 

20           absolutely critical.  We know that over 

21           50 percent of people -- workers in New York 

22           work in small businesses.  So it is a -- it 

23           is a critical part of our economic 

24           development strategy.


                                                                   53

 1                  And, you know, with the REDCs, I've 

 2           met with a lot of the REDCs.  You have 

 3           individuals there that work in all sorts of 

 4           different businesses with different focus.  

 5           You know, a care for -- you know, 

 6           manufacturing small businesses, you will see 

 7           all of those individuals around the state in 

 8           the different REDCs.

 9                  But perhaps Kevin Younis, our chief 

10           operating officer, can add more dimension to 

11           that, please.

12                  ESD COO YOUNIS:  Thanks, Eric.  

13           Apologies, Assemblyman, I ran down the hall 

14           real quick so I missed half your question.

15                  ASSEMBLYMAN STIRPE:  The question was, 

16           you know, as far as the makeups of the REDC, 

17           you know, committees and commissions, how 

18           many -- like I said, how many coffee shop 

19           owners are members of those boards?  How many 

20           daycare center owners are members of those 

21           boards?  How many of those types of 

22           businesspeople who have more insight into the 

23           really small business community?

24                  ESD COO YOUNIS:  Sure.  You know, I 


                                                                   54

 1           think the place where we see that 

 2           participation is -- there's a ton of 

 3           subcommittees, right?  So we have a -- each 

 4           region typically has a childcare 

 5           subcommittee, they might have a Main Street 

 6           subcommittee.  So there's -- I think you will 

 7           see those guys on the actual REDCs, but then 

 8           you will see them a lot more heavily in the 

 9           subcommittees, which really inform the work 

10           of the REDCs.

11                  So, you know, if we're talking about 

12           childcare, we look to the Finger Lakes or the 

13           Central New York childcare subcommittee.  

14           They meet, they talk to folks and they get 

15           recommendations.  So I think there's a good 

16           representation.

17                  ASSEMBLYMAN STIRPE:  Okay.  Okay, 

18           thanks.

19                  You know, Commissioner, we talked 

20           about broadband, and there's been this 

21           ongoing dispute.  You know, the Governor is 

22           saying 98 percent has access to high-speed 

23           broadband, and everybody else says it 

24           doesn't.


                                                                   55

 1                  Last year former Assemblyman Sean Ryan 

 2           had a bill that set out to form a commission 

 3           and do a mapping of high-speed broadband so 

 4           we know where it is and how much it is and 

 5           things like that.  I think it was A6679.  

 6                  This year we're going to put it in the 

 7           budget.  And the message, of course, for the 

 8           veto was that it was a fiscal -- had fiscal 

 9           implications and should be in the budget.  

10           This year it is going to be in our one-house 

11           budget again.  I'm sure it will be in the 

12           Senate one-house budget also.  

13                  Is there any reason that it won't end 

14           up in the budget?  And any reason why we 

15           don't want to know exactly who has high-speed 

16           broadband and who doesn't and where it is?

17                  ACTING COMMISSIONER GERTLER:  You 

18           know, absolutely no reason not to.  

19                  We -- in terms of our -- absolutely no 

20           reason not to know all of the data.  All our 

21           programs have always used the best available 

22           data to ensure that we are following up and 

23           implementing what we say we're going to do, 

24           to make sure that we have the right -- you 


                                                                   56

 1           know, the right access and availability for 

 2           New Yorkers.  

 3                  We work with -- we work with third 

 4           parties to make sure that we're reaching, you 

 5           know, every possible place that -- you know, 

 6           that we can.  And, you know, in large ways, 

 7           which I said this earlier, it's now less 

 8           about sort of availability, it's now about 

 9           affordability.  

10                  But the reason why we feel that -- or 

11           let me put it another way.  Congress passed 

12           what was the Broadband Data Act in 2020.  

13           That will provide the data that's needed and 

14           will provide and generate granular broadband 

15           data so that we can have it.  So it seemed 

16           that that would be in a sense duplicating 

17           efforts when we'd be -- when the federal -- 

18           when Congress has instructed the FCC to 

19           provide that.

20                  I mean, there is no dispute that we 

21           want to make sure that we have the best 

22           possible data.  We believe we do use the best 

23           possible data.  And, you know, there's no 

24           dispute in terms of making sure that we have 


                                                                   57

 1           the most complete broadband availability.

 2                  ASSEMBLYMAN STIRPE:  Okay.  Let's talk 

 3           a little bit about workforce -- I'll call it 

 4           redevelopment.  

 5                  It's pretty well known that probably a 

 6           third or more of the restaurants and 

 7           hospitality businesses will never reopen.  

 8           They've closed permanently.  So there are 

 9           thousands, tens of thousands of people who 

10           work in those businesses.  A lot of them are 

11           relatively low-skilled people, but there are 

12           lots of jobs that are going to be around in 

13           New York State.  You know, I know that there 

14           were estimates there were 90,000 unfilled 

15           jobs in New York State over the past year or 

16           so.  

17                  So I'm just wondering, what is the 

18           administration's plan to retrain these 

19           workers to fit into the jobs that will be 

20           available?

21                  ACTING COMMISSIONER GERTLER:  Let me 

22           say, first of all, I agree with you.  You 

23           know, even beyond having the pandemic, we're 

24           living through an economy where we're seeing 


                                                                   58

 1           a lot of changes.  It's becoming a more and 

 2           more knowledge economy.  We want to make sure 

 3           that, you know, we have the right workforce.  

 4           That's only been exacerbated by COVID that 

 5           has, you know, made sure that we've got to 

 6           even focus even more on workforce 

 7           development.  A disparate effect of COVID on 

 8           many of those who are unskilled and in 

 9           low-income areas.  So a critically important 

10           issue.

11                  The Governor put forward in 2019 a 

12           large workforce development initiative.  

13           We've already seen hundreds of projects 

14           supporting training and development and 

15           employment, you know, coming out of that.  

16           Workforce is -- and the focus on workforce 

17           goes across many agencies.  It's an effort 

18           that is multi-agency.  To go back to your 

19           point on the REDCs, the REDCs also focus on 

20           workforce development.  

21                  And then lastly, you know, ESD, my 

22           agency, is on many of the workforce 

23           committees.  We have also put forward and 

24           expanded the ETIP program to provide training 


                                                                   59

 1           that's focused to more sectors.  We're 

 2           providing more marketing -- you know, more 

 3           marketing dollars.  But that is exactly what 

 4           you're talking about.  We are looking to, you 

 5           know, upskill people, train people who don't 

 6           have the skills, and also provide more 

 7           internship programs, which is critical. 

 8                  And I'm sorry, I actually used -- I 

 9           try not to use acronyms, but ETIP is the 

10           Employee Training Incentive Program.

11                  ASSEMBLYMAN STIRPE:  Let me just state 

12           that I think community colleges will play a 

13           pretty big role in a lot of these 

14           retrainings, and I notice the Governor has -- 

15           you know, there's a cut to community 

16           colleges.  So I would just hope he would 

17           reconsider that, because it's going to be an 

18           important piece in getting people upskilled.  

19                  So thank you very much.

20                  ACTING COMMISSIONER GERTLER:  Thank 

21           you, sir.

22                  CHAIRWOMAN WEINSTEIN:  Over to the 

23           Senate.

24                  CHAIRWOMAN KRUEGER:  Thank you very 


                                                                   60

 1           much.  

 2                  Our next questioner is Senator John 

 3           Liu.

 4                  SENATOR LIU:  Thank you, Madam Chair.  

 5                  And welcome, Commissioner Gertler, 

 6           once again.  Last year we congratulated you.  

 7           I'm not sure how you feel now, but -- 

 8                  (Laughter.)

 9                  SENATOR LIU:  -- congratulations 

10           anyway.

11                  ACTING COMMISSIONER GERTLER:  Nice to 

12           see you.

13                  SENATOR LIU:  As you can tell, many of 

14           my colleagues in both houses are very 

15           concerned about our small businesses.  And in 

16           fact we always -- everybody says, including 

17           the Governor, says that small businesses are 

18           the fabric, are the engine behind our entire 

19           state's economy.  

20                  And yet your testimony highlighting 

21           the assistance for small businesses during 

22           the pandemic, our numbers are -- just seem 

23           paltry compared to some of the economic 

24           development deals that have been given in 


                                                                   61

 1           recent years to major corporations.

 2                  So my question for you is, what's 

 3           going on with the job creation targets for 

 4           all of those deals?  Have they been put on 

 5           pause this past year, or is your agency still 

 6           holding those corporations accountable?

 7                  ACTING COMMISSIONER GERTLER:  So a 

 8           number of different points there to address.  

 9                  I think, you know, first of all, we're 

10           proud of the work that we've done for small 

11           business.  We've made sure during a very 

12           difficult year that we've increased capital 

13           to these small businesses in many different 

14           ways.  We've had a number of different 

15           programs, I've talked about them already --

16                  (Overtalk.)

17                  SENATOR LIU:  Yes, you have, so you 

18           don't have to talk about them again.  You 

19           know, what's going on --

20                  ACTING COMMISSIONER GERTLER:  So I'm 

21           not going to get into -- you know, and I know 

22           that you're referring to many of the deals we 

23           have particularly, you know, upstate.  I can 

24           tell you that certainly, you know, prior to 


                                                                   62

 1           COVID, all of those deals were on track to 

 2           meet their -- meet their numbers.  

 3                  You know, this year we did face, you 

 4           know, a pandemic that created a lot of 

 5           hardship for these businesses.  What we did 

 6           do is businesses that were facing milestones, 

 7           they could apply for a one-year 

 8           administrative relief on their milestones, on 

 9           their job numbers, on their loans and --

10                  SENATOR LIU:  So they could get a 

11           one-year pause.

12                  ACTING COMMISSIONER GERTLER:  It's a 

13           one-year pause.  And, you know, it really 

14           was -- and that was something that was 

15           available to all of our -- all of our 

16           grantees.

17                  SENATOR LIU:  So all of -- like, for 

18           example, if somebody had an April deadline, 

19           an April 2020 deadline, it would have been 

20           extended to April 2021, and --

21                  ACTING COMMISSIONER GERTLER:  Yes, 

22           sir, it would have been extended by one year.  

23           We did that across -- across the board.

24                  SENATOR LIU:  Terrific.  All right.  


                                                                   63

 1                  And what about that database that half 

 2           a million dollars was allocated towards for 

 3           development, the database with the economic 

 4           deals in New York State?

 5                  ACTING COMMISSIONER GERTLER:  Sure.

 6                  SENATOR LIU:  On pause also, or -- 

 7                  ACTING COMMISSIONER GERTLER:  No.  No.  

 8           We are moving forward on that.  And look, as 

 9           you know, we're -- as an agency, we've also 

10           been, you know, stretched.  We've had a team 

11           that's worked very hard.  You know, at times 

12           we've worked remote --

13                  SENATOR LIU:  Do you know the time 

14           frame on which that database --

15                  ACTING COMMISSIONER GERTLER:  No, 

16           I'm -- no, sir, I'm going to give you a time 

17           frame.  Because that will be coming out -- 

18           coming out very soon.

19                  And I can tell you, as you know, I'm 

20           not -- I'm not looking to make an excuse.  

21           You know, often with a technology system 

22           there's -- you know, it takes a little bit 

23           longer --

24                  SENATOR LIU:  Does "very soon" include 


                                                                   64

 1           a time in 2021?

 2                  ACTING COMMISSIONER GERTLER:  Yes, 

 3           sir.  Yes, sir.  I would say it's a matter of 

 4           weeks, if not a matter of --

 5                  SENATOR LIU:  A matter of weeks?  

 6           Excellent.  

 7                  ACTING COMMISSIONER GERTLER:  We -- we 

 8           are -- you know, there are --

 9                  SENATOR LIU:  Last question for you, 

10           what are you going to do to help the Bills 

11           win?

12                  (Laughter; overtalk.)

13                  CHAIRWOMAN KRUEGER:  No more 

14           questions, John, you're past the clock.  

15           Sorry.

16                  SENATOR LIU:  Thank you, Madam Chair.

17                  ACTING COMMISSIONER GERTLER:  Good to 

18           talk to you, sir.

19                  CHAIRWOMAN KRUEGER:  Thank you, 

20           Senator Liu.

21                  Assembly.  

22                  CHAIRWOMAN WEINSTEIN:  We go to 

23           Assemblyman Otis, the chair of our Science 

24           and Tech Committee, 10 minutes.


                                                                   65

 1                  ASSEMBLYMAN OTIS:  Commissioner, 

 2           welcome.  

 3                  And I think one of the things that -- 

 4           difficult things in the last year that you 

 5           did not mention in your testimony is the work 

 6           that the folks at ESD had to do with the 

 7           Department of Health and other agencies in 

 8           understanding how the pandemic hit individual 

 9           businesses.  And there's a lot of micro-work 

10           that your folks had to get into to try and 

11           deal with a very challenging situation.

12                  So I just want to recognize that was a 

13           new task for {Zoom freeze} -- ESD and a lot 

14           of time put into that.

15                  ACTING COMMISSIONER GERTLER:  Thank 

16           you.

17                  ASSEMBLYMAN OTIS:  I'd like to go 

18           first to small business issues that you're 

19           already hearing some about.  We have a lot of 

20           small businesses in the state who had either 

21           very temporary or longer-term closures 

22           because of the pandemic and now are 

23           struggling to reopen.  They have back rent, 

24           they haven't been able to maybe pay insurance 


                                                                   66

 1           costs, mortgages, situations like that.  

 2                  And so I think the request that I 

 3           would make, and would appreciate some comment 

 4           on, is the need for us to -- especially with 

 5           federal dollars coming in -- find some models 

 6           that provide really relief to these 

 7           businesses that right now are sitting on the 

 8           ledge of being able to fully reopen and 

 9           survive or going under.  

10                  And I use the word "relief" because 

11           they may need some money just to pay some of 

12           that back rent or help negotiate -- and I 

13           know ESD has been helpful on tools for 

14           negotiation -- but for them to be able to 

15           stay open.  And so as one of the previous 

16           questioners indicated, loans aren't always 

17           the ticket.  I think the tax credit is 

18           helpful.  But what can we do in terms of 

19           looking at actual grants to very small 

20           businesses?  

21                  And I note in today's news the Biden 

22           administration for the PPP program has given 

23           a higher priority to businesses who have 20 

24           or fewer employees.  And so we should 


                                                                   67

 1           probably be pivoting and trying to create 

 2           some metrics to identifying these really 

 3           small -- whether they be restaurants, 

 4           retailers, non-for-profits that are trying to 

 5           survive and need help.

 6                  Any additional comments on this sort 

 7           of unique problem?

 8                  ACTING COMMISSIONER GERTLER:  Well, 

 9           you know, as I've said before, we've seen so 

10           many businesses that have faced unprecedented 

11           challenges in the last year.  And let's 

12           also -- and we want to do as much as we can 

13           and we intend to do as much as we can.  We 

14           also need to face the reality of dealing 

15           with, you know, the fiscal constraints of, 

16           you know, the current times.  

17                  But I would respond by a number of 

18           different ways.  First of all, we are working 

19           to ensure that we're getting as much federal 

20           funding as we can.  Just to give you one 

21           example, we used $7.5 million to help 

22           nonprofits get federal assistance for our 

23           small businesses.  That turned out to be 

24           roughly helping 64,000 small businesses 


                                                                   68

 1           throughout the state, and getting access to 

 2           about $380 million.  So those are significant 

 3           numbers.

 4                  We also have the recovery program 

 5           whereby we are looking to -- I already talked 

 6           about the $50 million to restaurants, but 

 7           it's also $50 million to small businesses 

 8           that have been in those sectors that have 

 9           been particularly hard-hit, like the arts, 

10           accommodations, entertainment.  

11                  And that's a means by which we are 

12           providing tax credits to help those 

13           businesses return.  Those are $5,000 for up 

14           to 10 employees, so it's a total of 50,000.  

15           That's a $50 million program.

16                  And then, you know, I will just say 

17           that our Small Business Division is focused 

18           relentlessly on all of the different ways 

19           that we look to support small businesses, 

20           particularly those that -- and you're 

21           right -- that need that capital.  We created 

22           the New York Forward Loan Fund to provide 

23           low-interest loans.  And, you know, we're 

24           proud that in that fund about 65 percent of 


                                                                   69

 1           those that are taking those funds are 

 2           MWBE firms.  

 3                  So we're really trying to make sure 

 4           that those that have not able to access 

 5           capital will be able to access capital.  

 6                  I hope that answers your question.  

 7           There are just so many different things that 

 8           we're looking to do to help these struggling 

 9           small businesses.

10                  ASSEMBLYMAN OTIS:  That is great.  And 

11           I just think we need to redouble that focus, 

12           and finding some new tools would be great.

13                  To the internet deployment issue -- 

14           and I would just share what I'm hearing from 

15           some of my upstate colleagues in more rural 

16           areas, but even folks in urban areas where 

17           there are dead zones, and situations in 

18           New York City where just specific apartment 

19           complexes, because they're maybe not -- 

20           there -- maybe the view of the telecom 

21           companies is there are not a lot of people 

22           there that are going to spend money on 

23           higher-level services.  

24                  The deployment gaps in this state are 


                                                                   70

 1           primarily geared around where telecom 

 2           companies don't want to invest in the 

 3           infrastructure because they don't think 

 4           they're going to get the money back from 

 5           customers who are buying additional services.  

 6           So some of this is a Public Service 

 7           Commission issue, some of it a broader issue 

 8           in terms of what we're going to require of 

 9           them.  

10                  But where we have gaps, you can map 

11           them or not map them, but everyone knows the 

12           gaps are where the companies don't want to 

13           spend the money.  And to the extent that 

14           you're communicating with some of those 

15           companies as well, we need to provide 

16           incentives or direction, and then we can fill 

17           those gaps.  

18                  And this is apart from the good 

19           efforts that the administration has been 

20           pursuing in the last few years to expand 

21           broadband.  But that's really where the gaps 

22           continue to be, and even with those 

23           incentives the companies just don't want to 

24           go where they don't want to go.


                                                                   71

 1                  ACTING COMMISSIONER GERTLER:  Right.  

 2           Well, I want to give you, you know, one 

 3           example where I think, you know, colleagues 

 4           in my agency, with our Washington office, 

 5           worked relentlessly to get $100 million in 

 6           awards from the FCC's Rural Digital 

 7           Opportunity Fund.  

 8                  Initially we were ruled categorically 

 9           ineligible.  Through their efforts, they went 

10           back to the FCC, got $100 million.  That 

11           money will be used to help to ensure that we 

12           are expanding internet access and service to 

13           any other areas in rural parts of New York 

14           that need, you know, that access.  

15                  As I said, you know, our program, 

16           we've received at this point 99.9 percent 

17           commitment.  We're at 98 percent right now.  

18           You know, we certainly want to make sure that 

19           there's accessibility, availability for all.  

20           But, you know, we believe on those numbers 

21           it's no longer a question of access and 

22           availability, it's a question of 

23           affordability.  We need to make sure that 

24           low-income families also have access.


                                                                   72

 1                  Be that as it may, we are continuing 

 2           to make sure that, you know, those have the 

 3           highest possible speeds on their broadband, 

 4           and, you know, and we'll continue to work on, 

 5           you know, any of the gaps that we see.  We 

 6           have third-party validators and providers 

 7           that help us make sure.  But suffice it to 

 8           say that, you know, broadband -- and this has 

 9           been, you know, reinforced during COVID -- is 

10           absolutely a critical utility for workers, 

11           for students, for families in this age.

12                  ASSEMBLYMAN OTIS:  Thank you for that.  

13                  And I'd also like to circle back to 

14           the arts again and a special need to focus on 

15           the needs of these very small arts 

16           organizations around the state, whether they 

17           be for-profit or not-for-profit.  These are 

18           the ones that are really going to be going 

19           under, and we do not want to lose them.  They 

20           are also big job creators, they are a part of 

21           the economic life of our state.  

22                  And so as you -- I know we'll be 

23           hearing from the Council of the Arts later, 

24           but I think we have to find ways to view 


                                                                   73

 1           those organizations, they are small 

 2           businesses also, having some relief and 

 3           keeping them going.

 4                  And with that, I will yield back the 

 5           last 45 seconds of my time, unless you have 

 6           additional comments about the arts.  

 7                  But thank you for all that ESD does, 

 8           and we are looking forward to a new round 

 9           from the Regional Economic Development 

10           Councils that will be very helpful.

11                  ACTING COMMISSIONER GERTLER:  Thank 

12           you.  I will just add very quickly that we do 

13           need to support employment for artists 

14           throughout the state.  And we also recognize 

15           the importance on a cultural level, and the 

16           diversity that it adds to New York State.  

17           That's one of the reasons -- the diversity, 

18           you know, in the arts, that makes New York 

19           State so special.  So I agree, we need to 

20           help these people get back to work.

21                  CHAIRWOMAN WEINSTEIN:  Thank you.  

22                  Before we go to the Senate, I 

23           neglected to mention that we were joined by 

24           Assemblymembers Gallahan and Gandolfo a while 


                                                                   74

 1           ago.  

 2                  Now we go to the Senate.

 3                  CHAIRWOMAN KRUEGER:  Thank you very 

 4           much.  

 5                  And we've been joined by Senator Pam 

 6           Helming.  

 7                  And our next questioner is Senator 

 8           James Sanders, from Queens.

 9                  SENATOR SANDERS:  Good morning, 

10           Commissioner.

11                  ACTING COMMISSIONER GERTLER:  Good 

12           morning, sir.

13                  SENATOR SANDERS:  Since time is not my 

14           friend, I'm going to go straight to 

15           questions.

16                  The New York Federal Reserve spoke of 

17           a 40 percent loss in Black businesses as of 

18           August, and by now I would argue that there's 

19           at least a 60 percent loss, and growing.

20                  Has anyone done a study of the impact 

21           of waiving the MWBE requirements on -- during 

22           the COVID crisis, sir?

23                  ACTING COMMISSIONER GERTLER:  So, 

24           look -- first of all, let me share with you 


                                                                   75

 1           that, you know, we understand the difficulty 

 2           for many small businesses, and particularly 

 3           the MWBE firms have been severely impacted 

 4           during COVID.  So, you know, what we've done 

 5           is a number of different things to improve 

 6           the process so that we can ensure that more 

 7           MWBEs can be part of our program.

 8                  SENATOR SANDERS:  That wasn't my 

 9           question, sir.  I was wondering have we 

10           looked at what the impact of waiving the 

11           requirement for MWBEs has been?  I'm the 

12           father of MWBEs, sir, I know it well.

13                  ACTING COMMISSIONER GERTLER:  Okay, 

14           sir.  You know, I'm not sure what 

15           requirements would be waived.  You know, we 

16           need to make sure that it withstands the 

17           constitutional challenges.  But perhaps, you 

18           know, Kevin Younis can add, you know, to 

19           that.

20                  ESD COO YOUNIS:  Sure.  Thanks, sir.  

21                  Thanks, Senator.

22                  It is -- you're referring to the 

23           requirements that the businesses be owned or 

24           controlled by Ms and Ws?  


                                                                   76

 1                  SENATOR SANDERS:  No, the 

 2           requirement -- in the time of emergency, the 

 3           requirement of 30 percent was waived.  

 4                  Let me go from there to something that 

 5           perhaps you guys do have.  The CARES Act 

 6           allowed for grants to be given to small 

 7           businesses.  Why didn't New York State use 

 8           this better?  In fact, why didn't it use -- 

 9           go for grants to small businesses?

10                  ACTING COMMISSIONER GERTLER:  You 

11           know, I'm going to have Pravina, who runs 

12           our, you know, Small Business -- I would just 

13           say that I think that that is a, you know, 

14           question that I would say that our Department 

15           of Budget would be, you know, more in a 

16           position to, you know, to answer that.  

17           But -- and you certainly -- 

18                  SENATOR SANDERS:  I'll tell you what, 

19           gentlemen, I'm not trying to -- my time is 

20           not my friend.  Can I meet with your new 

21           executive director and perhaps -- I'm not 

22           trying to embarrass either of you.

23                  ACTING COMMISSIONER GERTLER:  Of 

24           course.  Of course.  We're happy to do that.


                                                                   77

 1                  SENATOR SANDERS:  Can we set this up?  

 2           I'm Senator James Sanders Jr.  I'd like to 

 3           meet with the new executive even if we do it 

 4           under -- what is this, Zoom?  

 5                  ACTING COMMISSIONER GERTLER:  We 

 6           would -- we would be -- we'd be happy to 

 7           arrange for that, sir.

 8                  SENATOR SANDERS:  I thank you.  And I 

 9           thank you very much, Madam Chair.

10                  ACTING COMMISSIONER GERTLER:  Thank 

11           you.

12                  CHAIRWOMAN KRUEGER:  We go to the 

13           Assembly.

14                  CHAIRWOMAN WEINSTEIN:  Yes, we go to 

15           Assemblyman Ra, ranker on Ways and Means.

16                  ASSEMBLYMAN RA:  Thank you, Chairs.

17                  Commissioner, good morning.  Good to 

18           see you again.

19                  ACTING COMMISSIONER GERTLER:  Good 

20           morning.  Good morning.  

21                  ASSEMBLYMAN RA:  And I'll certainly 

22           join my colleagues who thanked you and your 

23           staff who are intimately involved in trying 

24           to get information out to our businesses 


                                                                   78

 1           throughout this pandemic and reopening, and 

 2           guidance and all of that.  So thank you for 

 3           that.

 4                  ACTING COMMISSIONER GERTLER:  Thank 

 5           you.

 6                  ASSEMBLYMAN RA:  I just wanted to 

 7           circle back to the CAT and COEs, in 

 8           particular regarding stakeholders and 

 9           companies that work with those entities.  I 

10           know there was a proposal -- not exactly the 

11           same as this, but there was a proposal last 

12           year to kind of merge the two.  I know a lot 

13           of those stakeholder organizations expressed 

14           opposition to that, and I believe are doing 

15           so again this year.

16                  I'm just wondering what kind of 

17           outreach there has been in the interim time 

18           between last year's budget when that proposal 

19           to consolidate this program was made, and 

20           this current proposal, and whether there -- 

21           you know, those companies' views on working 

22           within these entities have been taken into 

23           account in this year's proposal.  

24                  ACTING COMMISSIONER GERTLER:  Sure.  


                                                                   79

 1                  You know, I think it's fair that I 

 2           have Pravina Raghavan, who runs our Small 

 3           Business and does most of those 

 4           communications with our centers.  Pravina, 

 5           can you please join?

 6                  ESD EVP RAGHAVAN:  Sure.  Thank you 

 7           very much, Eric.  

 8                  Assemblyman, we've been actually 

 9           working with both the stakeholders and the 

10           universities.  We have been doing outreach 

11           with them.  Part of this proposal is actually 

12           just to ensure that the CATs and COEs can go 

13           through that competitive process and also, as 

14           Eric has mentioned before, increase the 

15           designation from one year for the COEs to 10.  

16                  And we continue to keep the same 

17           principles that are both in the CATs and 

18           COEs, which is working with the private 

19           sector.  And we have been working with them 

20           to, you know, ensure they understand the 

21           principles.  One of the things coming back 

22           from last year's hearing was it wasn't a long 

23           time to do the switchover, which is why we've 

24           included two years, to make sure they're 


                                                                   80

 1           automatically designated and then put into 

 2           the system that we do with the CATs normally.  

 3                  So we've been working on that.

 4                  ASSEMBLYMAN RA:  Well, thank you.  

 5                  And I join my colleagues with regard 

 6           to my concerns.  These programs have been 

 7           great about leveraging private investment, so 

 8           we want to make sure that we're working with 

 9           those stakeholders, all of those companies 

10           that are working with the universities, and 

11           make sure that we continue to have that 

12           success from an economic development 

13           standpoint.  

14                  I want to move over to a different 

15           issue, which -- there's a funding that's 

16           included for the Economic Development 

17           Initiatives.  I know in the past there's been 

18           funding allocated for things like advertising 

19           for, you know, different programs like 

20           START-UP NY.  And I'm just wondering if you 

21           can give me any idea in terms of how that 

22           funding was utilized last year and if there's 

23           perhaps an opportunity to maybe repurpose or 

24           open up some of that funding to, you know, 


                                                                   81

 1           regional or local chambers of commerce or 

 2           regional, you know, groups, pro-business 

 3           groups, to just promote the importance of, 

 4           you know, shopping locally and helping get 

 5           our local small businesses up and running and 

 6           thriving again.  

 7                  ACTING COMMISSIONER GERTLER:  So, you 

 8           know, let me say -- and I'll also have Kevin 

 9           Younis respond.  

10                  But, you know, in the past year we've 

11           seen obviously tourism be greatly affected by 

12           COVID.  You know, we had extraordinary 

13           numbers of visitors visiting New York prior 

14           to COVID.  I'm sure you know, you know, the 

15           numbers, north of 260 million people annually 

16           and incredible -- you know, over a 

17           $100 billion in economic impact.

18                  But -- and we know that for so many 

19           reasons those industries, many of the 

20           industries within tourism have been closed 

21           down, you know, and cut back.  We did a 

22           number of things in the past year to help 

23           create some awareness; we did virtual -- you 

24           know, virtual tours at some of our high 


                                                                   82

 1           destinations.  And I think all of this, and 

 2           knowing that tourism is so critical to 

 3           New York, is why the Governor has announced 

 4           that we would do a Rediscover New York 

 5           tourism marketing initiative to help to get 

 6           the tourism -- those tourism numbers back.

 7                  There are, you know -- it -- suffice 

 8           it to say it's such a, you know, critical 

 9           industry and adds so much to -- not just 

10           economically, but to the spirit of this 

11           state.  

12                  Kevin, perhaps you can add to some of 

13           the other initiatives.  I think we were also 

14           asked about what we did last year.

15                  ESD COO YOUNIS:  Yeah, thanks 

16           Assemblyman.

17                  Quickly to your question about what we 

18           did with the funding, the DI funding, 

19           frankly, we didn't use a lot of it, given the 

20           limitations around travel and what have you.  

21                  But this year we have included once 

22           again the Market New York funding, and you 

23           know, that's a $15 million fund that is both 

24           available for capital investments and 


                                                                   83

 1           marketing, local marketing.  So that goes 

 2           through the Regional Council process, and 

 3           that's once again available.

 4                  ASSEMBLYMAN RA:  Thank you.

 5                  ACTING COMMISSIONER GERTLER:  Thank 

 6           you.

 7                  CHAIRWOMAN WEINSTEIN:  Senate?

 8                  THE MODERATOR:  Senator Krueger, 

 9           you're on mute.

10                  CHAIRWOMAN KRUEGER:  Thank you.  I 

11           think it helps when I unmute, doesn't it?  

12                  Let's try Senator Martucci without my 

13           mute on.  Thank you.  

14                  SENATOR MARTUCCI:   Thank you, 

15           Chair Krueger.  And thank you, Commissioner, 

16           for joining us today.

17                  My question circles back to a question 

18           that was asked by Chair Kaplan just in the 

19           beginning of the hearing, and it's with 

20           respect to the CATs and the COEs.

21                  New York continues to decline when you 

22           look at the really important metrics -- R&D 

23           activity, patents filed, companies in tech, 

24           STEM jobs and degrees.  You know, in the 2020 


                                                                   84

 1           Bloomberg Innovation Index, New York has 

 2           dropped two spots to 14th.  The Milken 

 3           Institute State Technology and Science Index 

 4           has us falling from 11th in 2014 to 21st in 

 5           2020.  And New York continues to decline with 

 6           respect to these important issues, but places 

 7           like New Jersey and Connecticut and 

 8           Massachusetts outperform us again and again.

 9                  My concern is, why would we continue 

10           to cut funding to successful economic 

11           development programs like the CATs and the 

12           COEs?  Shouldn't we be increasing the state's 

13           investment in these and competing against 

14           other states, rather than competing against 

15           ourselves?

16                  ACTING COMMISSIONER GERTLER:  You 

17           know, when we look at, you know, our state 

18           economy -- and I went through some of the 

19           statistics earlier -- you know, pre-COVID we 

20           had seen some of the best metrics in our 

21           state economy in the history of the state.  

22           We saw private-sector jobs at all-time high, 

23           unemployment at an all-time low.  

24                  I don't think there is any other state 


                                                                   85

 1           that invests and champions innovation like 

 2           New York does.  You know, we do have the 

 3           Innovation Centers throughout the state.

 4                  But what we're doing here is at a time 

 5           when we're in an increasingly competitive 

 6           knowledge-based economy, what we're trying to 

 7           do is make sure that we're aligning the 

 8           resources in a better way, providing the 

 9           predictability and the stability that these 

10           centers need to be able to be even more 

11           innovative and respond to exactly -- you 

12           know, some of the things that you talked 

13           about, but being more competitive, ensuring 

14           that there's better technology that 

15           industries can ultimately use.  

16                  And when you have this 10-year window, 

17           you're adding more stability for these 

18           centers to be able to respond to critical 

19           needs.

20                  You know, we've seen, you know, other 

21           statistics that I -- you know, when we look 

22           at the number of workforce that have STEM 

23           degrees -- I talk to businesses all the time.  

24           Businesses want to be in New York State 


                                                                   86

 1           because of our talented workforce.  We 

 2           continue to have strong venture capital that 

 3           wants to invest in New York State.  The NIH 

 4           money that comes to the state is among the 

 5           highest in the nation.

 6                  So I think that there are so many 

 7           different statistics -- you know, as one 

 8           famous author said:  There's lies, damn lies 

 9           and statistics.  The statistics that I look 

10           at show a very positive economy, certainly 

11           pre-COVID -- a $1.7 trillion, thereabouts, 

12           GDP economy.  

13                  Look, our economy, like all others, 

14           faced challenges over the last year.  You 

15           know, given the talent of our workforce, the 

16           leadership that we have in this government 

17           stemming from the Governor, all of the 

18           different programs that we have, the 

19           innovative -- the innovations that we're 

20           seeing, the technology companies, the health 

21           companies -- I do strongly believe that this 

22           state will, as the Governor likes to say, 

23           build back better.

24                  SENATOR MARTUCCI:  Thank you, 


                                                                   87

 1           Commissioner.  I certainly appreciate your 

 2           time today.  

 3                  And again, I would just reiterate that 

 4           certainly from my perspective, I would prefer 

 5           to see a model that, again, didn't have these 

 6           CATs and COEs competing against each other 

 7           but rather, you know, utilizing the resources 

 8           that we have to be more competitive with our 

 9           nearby neighbors in Connecticut and 

10           Massachusetts.  

11                  But again, thank you for your time.  

12           And thank you, Chair Krueger, for allowing me 

13           to ask questions today.

14                  ACTING COMMISSIONER GERTLER:  Thank 

15           you.  

16                  CHAIRWOMAN KRUEGER:  Thank you very 

17           much.  

18                  Assembly.

19                  CHAIRWOMAN WEINSTEIN:  Yes, we go to 

20           Assemblyman Friend, the ranker on Economic 

21           Development.

22                  ASSEMBLYMAN FRIEND:  Thank you, 

23           Chairwoman.  

24                  And I'd just like to start with that, 


                                                                   88

 1           the CATs and COEs, and say that I am 

 2           concerned with the possibility of elimination 

 3           of the COEs and the possibility that some of 

 4           those COEs may not actually receive that 

 5           10-year standing.

 6                  I understand that that would be -- 

 7           provide more certainty for them to operate, 

 8           but they have differences in the way that the 

 9           two operate.  I mean, the CATs go ahead and 

10           they leverage that private interaction with 

11           businesses, and the COEs rely on the 

12           university support.  So they are similar, but 

13           not exactly the same way.  And during my time 

14           at the University of Buffalo, I saw 

15           advantages to both models.  

16                  So I think that going forward, we're 

17           eliminating one of the avenues that we have 

18           for our research development within our 

19           universities to be brought to market.

20                  But I don't want to really hang on 

21           that issue.  I appreciate everything that 

22           you've talked about with trying to support 

23           our workforce development.  We see that 

24           happening a lot in our community colleges, 


                                                                   89

 1           and I'd like to see that that would continue.  

 2           They need an awful lot of help going forward.

 3                  We definitely need a lot of support 

 4           getting our education, K-12, back up and 

 5           running to full five-day-a-week classes.  

 6           We're going a year now where our students 

 7           have not been in school and have not had that 

 8           opportunity for the interaction and the 

 9           learning, the stimulation that's going on 

10           there, and that's going to have a massive 

11           impact on our community colleges later on and 

12           our universities going forward, as well as 

13           economic development currently.

14                  With the impact of COVID and 

15           everything that ESD has had and the Governor 

16           has done with his executive orders to allow 

17           businesses to be able to operate under the 

18           current climate, what regulations might you 

19           think -- that the Governor suspended -- 

20           should remain permanently eliminated?

21                  ACTING COMMISSIONER GERTLER:  I'm 

22           sorry, what?  I missed the --

23                  ASSEMBLYMAN FRIEND:  I was just 

24           asking -- during COVID the Governor has 


                                                                   90

 1           suspended, by executive order, several 

 2           regulations within New York State.  Are there 

 3           any of those that you would recommend that 

 4           New York -- that we would go ahead and pass a 

 5           law to eliminate those regulations?

 6                  ACTING COMMISSIONER GERTLER:  So, you 

 7           know, first of all, with -- you know, I agree 

 8           with you, you know, these businesses have, 

 9           you know, faced enormous challenges over the 

10           last year.  I think first and foremost, you 

11           know, what we need to do is -- and again, to 

12           state the obvious, we're dealing with a 

13           public health crisis and we need to defeat, 

14           you know, COVID-19.  We need to ensure 

15           that -- to continue with our program of 

16           vaccination.  We need to continue to ensure 

17           that we're adhering to all of the health 

18           guidelines that have been put forward by 

19           Department of Health.  

20                  And, you know, in doing so, that will 

21           enable us, as the Governor has done over the 

22           last few weeks, is to open up more and more 

23           businesses.  We need to get to the point 

24           where people are able to go into, you know, 


                                                                   91

 1           into congregate settings.  We need to be able 

 2           to support more dining, more of these 

 3           settings.  You know, in terms of -- so -- so 

 4           that's first and foremost.  You can't have, 

 5           you know, over a long period of time, you 

 6           know, our businesses subject to these reduced 

 7           restrictions.  

 8                  The Governor is right in the sense of 

 9           we have to maintain these guidelines to 

10           protect the health and safety of New Yorkers.  

11           But, you know, our hope -- and exactly what 

12           the Governor has been doing over the last few 

13           weeks is opening up more and more of the 

14           economy.  Let's get to that point.  

15                  And, you know, in the interim, in 

16           terms of any specific questions, I would 

17           defer to the Governor's council on regulatory 

18           issues.  You know, we're focused on making 

19           sure that, you know, the businesses, as they 

20           open up more and more, have what they need in 

21           terms of capital access, support, the 

22           technical assistance, and so on.

23                  ASSEMBLYMAN FRIEND:  Since my time is 

24           running short, I'll just make some comments 


                                                                   92

 1           and recommendations.

 2                  It was recently suggested, possibly, 

 3           that the MWBE 30 percent was put on hold.  

 4           I'm not quite sure that I've heard anything 

 5           about that.  But even so, given the 

 6           possibility of still COVID transmission, we 

 7           have a bill that would have the MWBE set by 

 8           the region that it's currently -- that you're 

 9           in.  

10                  So in the Southern Tier, we don't have 

11           30 percent MWBEs available for many of our 

12           businesses, so we end up having to go and 

13           bring people out of Syracuse, New York City, 

14           or even out of the state to come in and 

15           fulfill those MWBE requirements. 

16                  And it would make more sense to spur 

17           more MWBEs within the region and to have the 

18           MWBE requirement be similar to what you 

19           actually have within that region.

20                  My other comment goes to broadband.  

21           And a lot of people have talked about 

22           affordability or availability.  Within the 

23           Southern Tier, availability is still a huge 

24           issue, and it has been.  And I appreciate 


                                                                   93

 1           everything that the Governor has done to try 

 2           to bring up more availability, but I just 

 3           have a recent report from the Ithaca Area 

 4           Economic Development Board that says the 

 5           PERM 75, a New York State DOT permitting 

 6           requirement that became effective in November 

 7           of 2020, authorizes DOT to enact a use and 

 8           occupancy on fiber optic cable that runs 

 9           along state right-of-ways.

10                  This requirement, on average, is 

11           $15,000 per mile to the cable company, and 

12           it's 26 to 80 cents per foot per year on an 

13           annual rental fee.  This requirement --

14                  CHAIRWOMAN WEINSTEIN:  Assemblyman, 

15           your time is up.  Do you want to just 

16           conclude?

17                  ASSEMBLYMAN FRIEND:  Yeah.

18                  So basically the PERM 75 is yet 

19           another one of those things that's holding us 

20           back from having more broadband within the 

21           Southern Tier, within rural parts of the 

22           country -- rural parts of the state.  And I'd 

23           appreciate if you would help to support the 

24           removal of that fee.  Thank you.


                                                                   94

 1                  CHAIRWOMAN WEINSTEIN:  Thank you.

 2                  We go to the Senate.

 3                  CHAIRWOMAN KRUEGER:  Thank you.  

 4                  Senator Jim Skoufis.

 5                  SENATOR SKOUFIS:  Thanks very much, 

 6           Madam Chair.

 7                  And thank you, Commissioner, for your 

 8           testimony.  And I certainly appreciate the 

 9           enormity of the work that you've been a part 

10           of over the past year and moving forward.

11                  I want to circle back to an issue that 

12           I think one of my Assembly colleagues very 

13           briefly touched on, but I didn't quite get 

14           the full answer that he perhaps and I 

15           certainly were looking for.  And that is I've 

16           had concerns for quite some time about the 

17           operations of these Regional Economic 

18           Development Councils, REDCs.  But 

19           specifically, I want to ask about these 

20           so-called recovery plans that the councils 

21           have been working on.

22                  It's my understanding that in an 

23           effort to come out of this pandemic and 

24           retool, if you will, the money that's 


                                                                   95

 1           appropriated to these REDCs, in lieu of the 

 2           traditional awards that they dispense, 

 3           they're developing these recovery plans.

 4                  Our Senate staff has been asking your 

 5           team -- perhaps you personally, I don't know, 

 6           but certainly your office -- for these 

 7           recovery plans throughout the state for at 

 8           least the past four months.  And to date, on 

 9           February 23rd, we still do not have what 

10           these recovery plans are, what they look 

11           like, the details, et cetera.

12                  So I'm asking you today if you can 

13           please make a commitment that, let's say this 

14           week, your office will share with the 

15           Legislature -- who appropriates these 

16           hundreds of millions of dollars for the 

17           REDCs -- that you will share these recovery 

18           plans with us this week.

19                  ACTING COMMISSIONER GERTLER:  So, you 

20           know, thank you for your comments up front in 

21           terms of all the great work that this agency 

22           has done and I can only tell you that it's 

23           been a privilege to be able to lead this 

24           agency during these difficult times.  So 


                                                                   96

 1           thank you for that.

 2                  To get to your question, I mean, we 

 3           rely on the REDCs in so many different ways.  

 4           And we've spent a lot of time discussing, 

 5           planning, you know, thinking.  And we rely on 

 6           the work that they do and the reports that 

 7           they provide in order to guide our thinking 

 8           in terms of how we think about our broad 

 9           economic development plans.  And, you know, 

10           the work that they have done in working with 

11           us -- you know, that work had never been 

12           finalized.  And --

13                  SENATOR SKOUFIS:  But if I could just 

14           interject, so just to cut to the chase here 

15           with 30 seconds.  When can the Legislature 

16           expect you will share these plans with us?

17                  ACTING COMMISSIONER GERTLER:  So, you 

18           know, let's -- you know, let me do this and, 

19           to your point, cut to the chase.  

20                  You know, let me follow up after, you 

21           know, this hearing and figure out a timing of 

22           what we can do about those reports and see 

23           how we can share those.  So --

24                  SENATOR SKOUFIS:  Okay.


                                                                   97

 1                  ACTING COMMISSIONER GERTLER:  -- that 

 2           should be -- that should be soon.  I -- I -- 

 3           so we can follow up on that.

 4                  SENATOR SKOUFIS:  Okay.  My time has 

 5           expired.  Thank you.

 6                  CHAIRWOMAN KRUEGER:  Thank you.

 7                  Assembly?

 8                  CHAIRWOMAN WEINSTEIN:  Yes, I think we 

 9           are now going on to members for three 

10           minutes.  Assemblywoman Rajkumar.

11                  ACTING COMMISSIONER GERTLER:  I'm 

12           sorry, I can't hear anything if anybody's 

13           talking.  I apologize.

14                  CHAIRWOMAN KRUEGER:  Nobody's talking 

15           yet.  We're looking.

16                  CHAIRWOMAN WEINSTEIN:  We're looking 

17           for her.  If she's not here, why don't we go 

18           to Assemblyman Stern.

19                  THE MODERATOR:  She's here.  She's 

20           coming on, I do believe.

21                  CHAIRWOMAN WEINSTEIN:  Okay.  

22                  ASSEMBLYWOMAN RAJKUMAR:  Hi, I'm here.

23                  ACTING COMMISSIONER GERTLER:  Here we 

24           go.


                                                                   98

 1                  ASSEMBLYWOMAN RAJKUMAR:  Thank you.  

 2           Pardon my video.

 3                  Good morning, Commissioner Gertler, 

 4           and thank you for your efforts to help the 

 5           New York economy rebound from this pandemic.

 6                  I have three questions, I'll ask them 

 7           all quickly.  First is on ESD's issuing of 

 8           cash grants.  Given our enormous budget 

 9           challenges right now, and so many health and 

10           human services needs, I'm curious why ESD 

11           still gives cash grants to some private 

12           businesses.  Wouldn't it be better, instead 

13           of cash grants, to offer job tax credits?  

14           Which I know you call Excelsior Job Credits.  

15                  Cash is tight right now, and needs are 

16           great, and Excelsior tax credits are pay for 

17           performance, so don't drain cash in the 

18           short-term.  I'm curious to hear your expert 

19           thinking on the matter.

20                  My second question is on the 

21           representation of South Asian Americans in 

22           the MWBE programs.  South Asians comprise a 

23           large chunk of my constituency.  They include 

24           people from the Indian subcontinent as well 


                                                                   99

 1           as Indo-Caribbeans from Guyana and Trinidad.

 2                  Is ESD committed to ensuring that MWBE 

 3           programs are available across the spectrum of 

 4           minority communities, including for the South 

 5           Asian communities that make up such a vital 

 6           part of my district?

 7                  And finally, does ESD have any role in 

 8           supporting any community college workforce 

 9           development initiatives in Queens?

10                  Thank you.  

11                  ACTING COMMISSIONER GERTLER:  Great.  

12           Thank you.  I'm just running down those 

13           questions.  

14                  I'm going to also turn to my 

15           colleague, you know, Kevin Younis to also 

16           focus on some of those questions.

17                  So let me start first, you know, with 

18           your first question, which is an important 

19           part of what we do in terms of economic 

20           development.  Clearly we use the Excelsior 

21           tax credits as -- in multiple ways.  That is 

22           an important part of our program when we look 

23           to attract businesses, you know, to New York, 

24           for example.  


                                                                   100

 1                  And those are performance-based.  When 

 2           we do -- when we do grants, those grants, 

 3           don't forget, also have clawbacks.  We make 

 4           sure -- and I think this is the key to which 

 5           we do -- in which we do business development, 

 6           that -- and by the way, those grants also go 

 7           to, you know, nonprofits.  They're 

 8           performance-based.  If the grants do not -- 

 9           if those that are awarded the grants do not 

10           do what they're supposed to do, they get 

11           clawed back.

12                  The same thing with the Excelsior tax 

13           credits.  They only get awarded once they 

14           achieve the -- you know, it's tied to the 

15           performance.  And that's -- you know, and 

16           that is absolutely critical.

17                  I think in the interests of time, what 

18           I can do is follow up on the other two 

19           questions.  I certainly don't want to not 

20           answer those.  But what I will do is I'll 

21           have my office come back to respond to the 

22           other two to you.  I apologize.

23                  ASSEMBLYWOMAN RAJKUMAR:  That would be 

24           great, thank you.


                                                                   101

 1                  ACTING COMMISSIONER GERTLER:  Thank 

 2           you.

 3                  CHAIRWOMAN WEINSTEIN:  To the Senate.

 4                  CHAIRWOMAN KRUEGER:  Thank you.

 5                  We've been joined by Senator Roxanne 

 6           Persaud and Senator Sean Ryan.  But the next 

 7           questioner is Senator Borrello.

 8                  There you are, George.

 9                  SENATOR BORRELLO:  Okay, thank you 

10           very much, Madam Chair.

11                  Commissioner, thanks for being here 

12           today.

13                  Let me start off by saying thank you 

14           for -- during the beginning of the pandemic, 

15           when we had the lockdown, I can tell you that 

16           I worked closely with Empire State 

17           Development in the Western New York region, 

18           and they did a fantastic job helping 

19           businesses to figure out, you know, their 

20           reopening and if they qualify.

21                  When I was previously county executive 

22           of Chautauqua County, I was also a member of 

23           the REDC, and I appreciate the work that's 

24           done there.  Which leads me to my question.


                                                                   102

 1                  You know, I think that -- and I don't 

 2           really know if anybody asked this before; I 

 3           don't think so.  We're looking at the CFAs 

 4           and what the status is right now.  I know it 

 5           basically has been more or less on pause.  I 

 6           have many businesses and many organizations 

 7           asking me about the CFAs.  So if you could 

 8           give us an update on what the status is.

 9                  ACTING COMMISSIONER GERTLER:  Great.  

10           Thank you.  I will say very quickly -- I'm 

11           going to turn this over to Kevin Younis -- 

12           but, you know, I'm proud of the work that our 

13           team in Western New York continues to do and 

14           the work they continue to focus on there.

15                  But in the interests of time, Kevin 

16           Younis, can you please respond to the CFA 

17           question?

18                  ESD COO YOUNIS:  I sure can.  Thanks, 

19           Eric.  Thanks, Assemblyman {sic}.

20                  I think, pretty simply, we expect to 

21           have the round of REDCs open this year again, 

22           you know, with the full 750 that we typically 

23           do. 

24                  SENATOR BORRELLO:  Okay.  So in a 


                                                                   103

 1           similar timing, a similar, you know, time 

 2           frame so we can have an idea when?

 3                  ESD COO YOUNIS:  Yeah, I -- you know, 

 4           obviously, given COVID, anything can change.  

 5           But I think our expectation is somewhere -- 

 6           is similar to the same process we've done in 

 7           past years, timing and anything else.

 8                  SENATOR BORRELLO:  Okay.  All right.  

 9           Well, that's a relief --

10                  ESD COO YOUNIS:  The focus will be a 

11           lot more on the COVID recovery, we would 

12           expect, in terms of available resources.  But 

13           yes.

14                  SENATOR BORRELLO:  Yeah.  Well, 

15           absolutely.  And certainly I think we all 

16           know that the hospitality industry has been 

17           hard-hit, and that would certainly be an 

18           important focus.

19                  You know, and I do -- I will, just in 

20           my remaining time here, Commissioner, I will 

21           take you to task on one thing.  You mentioned 

22           that the reason that broadband is not 

23           expanding is because businesses don't want to 

24           do it.  And I would strongly encourage you to 


                                                                   104

 1           look at and speak with broadband providers.  

 2           The tax on fiber has dramatically decreased 

 3           and even killed some projects.  We've got the 

 4           DOT that's charging a fee to -- or requiring 

 5           companies to re-survey the same areas just to 

 6           run fiber on existing poles.

 7                  So I would ask you, and I've brought 

 8           this up many times before -- ask you to look 

 9           at what New York State is doing to 

10           unfortunately, you know, hamper the expansion 

11           of broadband, particularly in rural areas.  

12           You know, right now my opinion of the 

13           expansion of broadband in our rural areas are 

14           self-inflicted wounds.  And I would strongly 

15           encourage you to help look at how we can 

16           solve that.

17                  So thank you.

18                  CHAIRWOMAN KRUEGER:  Thank you.

19                  Assembly.

20                  CHAIRWOMAN WEINSTEIN:  We go to 

21           Assemblyman Stern.

22                  ASSEMBLYMAN STERN:  Yes.  I'm on?  

23           Thank you.

24                  ACTING COMMISSIONER GERTLER:  There we 


                                                                   105

 1           go.

 2                  ASSEMBLYMAN STERN:  Thank you.  Thank 

 3           you, Madam Chair.  Thank you, Commissioner.

 4                  Like many of my colleagues from both 

 5           the Assembly and the Senate, I'm very 

 6           concerned about the CATs and COEs.  So 

 7           currently CATs are awarded a 10-year 

 8           designation and in two years, under the 

 9           Governor's proposal, there would be 14 

10           10-year contracts awarded to the new CATs.  

11                  So I understand the balance that we're 

12           trying to strike between competition and 

13           continuity under this proposal.  But is there 

14           a concern that if these awards are going to 

15           be made at substantially the same time for a 

16           10-year period, that we might actually be 

17           reducing competition?

18                  I'd like to get your thoughts on that, 

19           Commissioner, and then also lend my voice 

20           again to my colleagues' in support of the 

21           CATs and COEs.  We've seen that this is a 

22           demonstrably, quantifiably successful 

23           program, exactly the kind of program that we 

24           should be supporting, not cutting, as we come 


                                                                   106

 1           out of the pandemic to build back better.

 2                  Thank you.

 3                  ACTING COMMISSIONER GERTLER:  Sure.  

 4           No, I appreciate that.  And given I've, you 

 5           know, talked quite a bit about the CATs, you 

 6           know, COEs discussion, I'm going to have 

 7           Pravina Raghavan, who heads our small 

 8           business, I'm going to have her address that 

 9           comment in terms of how we do the competitive 

10           nature after the two-year designation.

11                  ESD EVP RAGHAVAN:  Thank you, 

12           Commissioner Gertler.  

13                  Thank you, Assemblyman.  

14                  I understand the concern.  We do not 

15           look to eliminate COEs or the number, so I 

16           just want to make sure.  We also know that 

17           those are areas that we need to focus on from 

18           a technology perspective.  And so the 

19           competition, as we do for the CATs, many get 

20           redesignated easily because it is areas that 

21           we are creating jobs and thriving in the 

22           economy.  We do not expect that to be a 

23           problem in the two years.  

24                  But it also gives us time to sit there 


                                                                   107

 1           and see if there's a different face and work 

 2           with them to see the competition process.  So 

 3           it would be similar to what we do, which is 

 4           an RFP.  We don't have all the CATs compete 

 5           at the exact same time as well.  There is a 

 6           rotation to make sure that they're evenly 

 7           distributed, between two to four per year, 

 8           usually, in non-COVID years.

 9                  ASSEMBLYMAN STERN:  Very good.  Thank 

10           you.

11                  ACTING COMMISSIONER GERTLER:  Thank 

12           you.

13                  CHAIRWOMAN WEINSTEIN:  Back to the 

14           Senate.

15                  CHAIRWOMAN KRUEGER:  Okay, thank you.

16                  Senator Sean Ryan, Buffalo.

17                  SENATOR RYAN:  Thank you very much.  

18                  Good morning, everybody.  

19                  I would echo the comments of other 

20           people from Western New York that ESD did a 

21           great job early in the pandemic of really 

22           being clear and concise with local 

23           businesses, especially in the manufacturing 

24           field, to make sure those essential supply 


                                                                   108

 1           chain businesses stayed open.  So, you know, 

 2           kudos on that.

 3                  ACTING COMMISSIONER GERTLER:  Thank 

 4           you.

 5                  SENATOR RYAN:  I'm also going to, you 

 6           know, echo the other comments, Commissioner, 

 7           which is that, you know, I know we rely on 

 8           the REDCs, which I think's a good idea to get 

 9           these regionally flavored economic plans.  

10                  But it kind of -- you know, that 

11           theory flies in the face of getting rid of 

12           the CATs and the COEs, because those are 

13           specifically regionally based.  And I bet 

14           that the REDCs really weren't consulted about 

15           whether they think we should get -- 

16           consolidate, you know, lop a lot of them off, 

17           because I think they're a vital part of each 

18           different region's economic development plan.

19                  So did you consult with all the REDCs 

20           before we made this proposal?

21                  ACTING COMMISSIONER GERTLER:  So, you 

22           know, again, as earlier in the hearing -- and 

23           I'm going to have Pravina talk.  You know, 

24           Pravina discussed all the different ways that 


                                                                   109

 1           we had outreached to members of the community 

 2           regarding the CATs and COEs.  And as I said, 

 3           last year this was a proposal that we brought 

 4           up, there was, you know, some -- you know, 

 5           some feedback, which is why we changed it to 

 6           a two-year designation.

 7                  But, Pravina, perhaps you can also 

 8           discuss, you know, some of the discussions 

 9           you've had with the REDCs and some of the 

10           other community members on the reasons for 

11           the change.

12                  ESD EVP RAGHAVAN:  Yup.

13                  And first I'd just like to say that we 

14           are not getting rid of any CATs or COEs, or 

15           eliminating any.  It would be the exact same 

16           number.  I understand that we're moving one 

17           program into another, so there is a 

18           confusion, but there will be none gotten rid 

19           of.  And we're not reducing the number 

20           either.  

21                  So we have done outreach, both with 

22           the communities as well as the universities, 

23           as private stakeholders who use the network, 

24           to ensure that we had a seamless transition.  


                                                                   110

 1           Once again, the reason we are doing this is 

 2           to ensure that we have the upcoming -- 

 3           supporting the right technology to increase 

 4           both jobs regionally but also across the 

 5           state, as well as making sure that we have a 

 6           long tail to make some of this technology 

 7           prevail.  And as I said, the CATs are 10 

 8           years, and so that is what we've been doing.  

 9                  But we have been working with the 

10           communities when we've been looking at these 

11           proposals, as requested last year.

12                  SENATOR RYAN:  Sure.  Well, I hope you 

13           keep open ears to the feedback that you're 

14           getting today, which is pretty uniform.

15                  And as I'm running out of time, I 

16           would like at some point to get an update on 

17           the Tesla gigafactory in Buffalo and how that 

18           is recovering from the pandemic, and how 

19           we're going to, you know, put the new job 

20           measurement rules in place now post-pandemic.

21                  So, Commissioner, if we can do that 

22           offline, I would appreciate it.

23                  ACTING COMMISSIONER GERTLER:  Of 

24           course.  I will make sure that we follow up 


                                                                   111

 1           with you, sir, after this hearing.

 2                  SENATOR RYAN:  Thank you very much.

 3                  ACTING COMMISSIONER GERTLER:  Thank 

 4           you.  

 5                  CHAIRWOMAN KRUEGER:  Thank you.  

 6                  Assembly.

 7                  CHAIRWOMAN WEINSTEIN:  Yes, so we go 

 8           to Assemblyman Byrne, for three minutes.

 9                  ASSEMBLYMAN BYRNE:  Thank you, 

10           Commissioner.  I'm sorry I have to jump on 

11           and off, because we have separate committee 

12           meetings, so I don't want to be overly 

13           redundant with some of my colleagues' 

14           questions that I think were already asked.  

15                  But I do have another question or at 

16           least a follow-up regarding the Restaurant 

17           Return to Work Tax Credit.  My understanding 

18           is it's restricted to places that had Orange 

19           and Red Zone declarations.  My question would 

20           be, you know, these restaurants all 

21           throughout our state have been hit hard by 

22           the state shutdowns, and the state was sole 

23           real decider in determining who could 

24           operate, what phases they could operate for 


                                                                   112

 1           outdoor and indoor dining, et cetera.  

 2                  So why are we having this distinction 

 3           for this tax credit for Orange and Red Zone 

 4           areas only?

 5                  ACTING COMMISSIONER GERTLER:  Yeah.  

 6           You know, we -- you know, I certainly 

 7           understand that restaurants throughout the 

 8           state, businesses throughout the state were 

 9           affected by COVID.  

10                  You know, it wasn't the -- you know, 

11           the state made the decisions in terms of, you 

12           know, the numbers and the percentages.  But 

13           we didn't make the decision to have a global 

14           pandemic hit New York State.  And so, you 

15           know, this has been a crisis that has been a 

16           global and public health crisis coincided 

17           with an economic crisis, and we've had to 

18           make sure that we are protecting the safety 

19           and health of New Yorkers.

20                  Now, because it's also been an 

21           economic crisis, it's also been -- you know, 

22           there's also fiscal challenges.  And so we've 

23           had to think about what are the most -- you 

24           know, perhaps the best focus in terms of 


                                                                   113

 1           restarting the restaurant industry.

 2                  We know -- I've talked to restaurant 

 3           owners around the state; we know that, you 

 4           know, restaurants have been hurt.  What we've 

 5           been trying to do is -- given the fiscal 

 6           constraints, is focus on those that had the 

 7           additional restrictions imposed on them -- 

 8           the restaurants that were closed down, like 

 9           in New York City, or those that were in 

10           Orange and Red Zones.  

11                  And so, you know, it's a $50 million 

12           fund.  And, you know, to ensure that that -- 

13           you know, that money was -- you know, that we 

14           were able to provide to restaurants, we were 

15           looking at those that had the additional 

16           restrictions.

17                  Now, that --

18                  ASSEMBLYMAN BYRNE:  Commissioner, I'm 

19           running out of time.  I have less than 

20           30 seconds left.  So I'm not, you know, 

21           attributing a global pandemic to your 

22           department, so I hope you don't interpret my 

23           question that way.  And I understand the 

24           state had to make restrictions.  


                                                                   114

 1                  But, you know, often in state 

 2           government we get in this mode of picking 

 3           winners and losers, and unfortunately this 

 4           has kind of highlighted that and, you know, 

 5           there's been negative effects on people 

 6           throughout the state, not just in those 

 7           areas.  We want to help everybody.  

 8                  So I just wanted to highlight that 

 9           distinction.  So I hope we get some more 

10           assistance to those restaurants as well.

11                  Thank you, Mr. Commissioner.

12                  ACTING COMMISSIONER GERTLER:  Thank 

13           you.  

14                  CHAIRWOMAN WEINSTEIN:  Before we go to 

15           the Senate, Assemblyman Santabarbara has 

16           actually been with us for quite a while, and 

17           I neglected to announce him.

18                  Now we go to the Senate.  

19                  CHAIRWOMAN KRUEGER:  Nice to see you, 

20           Assemblymember Santabarbara.  You know, the 

21           squares are so small, your best friend can be 

22           staring at you and you're not sure who's on 

23           the screen with you today.

24                  I'm going to take this time for 


                                                                   115

 1           myself, thank you.  

 2                  So we had had a little conversation 

 3           before today, and I asked you about the 

 4           program where the Governor took $175 million 

 5           from various parts of the state budget and 

 6           merged them into one to cover worker 

 7           retraining and employment programs.  You were 

 8           going to get me the master list, I think, of 

 9           how that $175 million is being spent 

10           annually.  

11                  I don't know whether you've had a 

12           chance to put that together yet.  I looked 

13           online and I could not find that anywhere.

14                  ACTING COMMISSIONER GERTLER:  I have 

15           some of the information here in our office.  

16           We'll send you that information, Chairwoman.

17                  CHAIRWOMAN KRUEGER:  Great.  And we'll 

18           share it with everyone, because I think 

19           everyone is very interested.  Sometimes we 

20           forget, we start new programs and then nobody 

21           ever goes and takes a look and sees how 

22           they're doing.  And certainly this is a time 

23           when we need to be smartly investing our 

24           funds that are for specific mandated 


                                                                   116

 1           purposes, such as getting people ready to 

 2           enter the labor market -- or the new labor 

 3           market that will be evolving out of this 

 4           pandemic moosh we are in.

 5                  On that note, can you also explain to 

 6           me -- it's Part AA in the TEDE bill, and it 

 7           reopens the Brownfields Development Grants 

 8           for companies who applied back either in 2010 

 9           or earlier than 2010, so it's been over 

10           11 years.  It's been companies who already 

11           got the first part of the grant, which was 

12           money for the remediation of the actual 

13           brownfields pollution, but have not gotten 

14           the economic development portion, I guess 

15           because they never built or completed 

16           building something.  

17                  But we realized many years ago this 

18           was too generous a program, and we changed 

19           the rules of the road.  So why suddenly would 

20           we in 2021 be reopening this program to 

21           people who had applied before 2010, I believe 

22           was the year.  So I'd love a list of who's 

23           going to be eligible and how much money you 

24           think that's going to cost the state.


                                                                   117

 1                  ACTING COMMISSIONER GERTLER:  Okay.  

 2           You know, for -- as I understand on the 

 3           proposed Brownfield Tax Credit extension, 

 4           it's to extend those where their period was 

 5           set to expire from March 30, 2020, through 

 6           the end of this year.  And it was a two-year 

 7           extension.  

 8                  That being the case, we will provide 

 9           to your office answers to the questions that 

10           you want on the Brownfield Tax Credits.

11                  Kevin Younis, is there anything else 

12           you want to add to that?

13                  ESD COO YOUNIS:  Yes, thanks, Eric.  

14                  Senator, this was solely related -- 

15           the intent was solely related to COVID.  So 

16           in many instances folks were in the middle of 

17           projects where they would have qualified for 

18           work expenditures and had to stop.  So this 

19           was just in recognition of getting -- for 

20           folks who otherwise would have been eligible 

21           for expenditures in work had COVID not 

22           stopped their project, and this allows them 

23           really to be eligible for what that would 

24           have been for.


                                                                   118

 1                  CHAIRWOMAN KRUEGER:  So, Kevin, is it 

 2           normal that under this program it can be 

 3           10 years later and it's still not completed?

 4                  ESD COO YOUNIS:  I think so, yeah.  If 

 5           that is the current time frame that -- 

 6           that -- at least for those getting into the 

 7           program, you know, 10 years ago, they had 

 8           that amount of time to do the projects.

 9                  CHAIRWOMAN KRUEGER:  Okay.  So yes, 

10           I'd be very interested in seeing that.

11                  Then really growing out of much of the 

12           conversation today with people asking about 

13           different programs, some that got delayed for 

14           last year and are being asked to be 

15           restarted, some that seem like they're not 

16           going to have enough money to keep going even 

17           though people are raving about them -- do we 

18           ever take a look at and say we've tried an 

19           awful lot of different models of economic 

20           development in New York State, here are the 

21           ones that worked and here are the ones that 

22           didn't work?  

23                  Do we have a list of like our 10 best 

24           and our 10 worst?  I think we can learn a lot 


                                                                   119

 1           from them.

 2                  ACTING COMMISSIONER GERTLER:  You 

 3           know, it's a great question, Chairwoman.  

 4                  We certainly go through our programs 

 5           on a regular basis.  You know, we go through 

 6           and continuously look at, you know, our 

 7           programs, we're looking at the effectiveness 

 8           of them.  You know, we will -- as I said, in 

 9           a matter of weeks we will release our 

10           database of incentives, you'll be able to 

11           track, you know, those programs.  You know, 

12           that will be searchable, downloadable, we'll 

13           be updating that quarterly.  

14                  Certainly on the REDCs we provide, you 

15           know, the statistics of how those programs 

16           are doing.  

17                  So we're constantly, you know, 

18           measuring it.  We're certainly accountable to 

19           all the public dollars.  So, you know, that 

20           is an important part of what -- you know, 

21           what we do.  I can tell you that certainly 

22           90 percent of our projects meet the 

23           performance levels that we've set.  We do 

24           cost-benefit analysis on every single 


                                                                   120

 1           program.

 2                  You know, Kevin, do you want to, you 

 3           know, add to anything that I've said?

 4                  ESD COO YOUNIS:  No, Eric -- the only 

 5           thing I would add, Senator, is I think you -- 

 6           the challenge -- right, we do -- we want to 

 7           make sure we're focusing on the best 

 8           programs.  

 9                  The nature of what we do, as you know 

10           very well, is what is economic development 

11           and what is success.  And so different 

12           programs do different things.  And there's 

13           just so many, from MWBEs to film to 

14           Excelsior, you know, it's just -- different 

15           programs have different measures, and it's 

16           hard sometimes to put them all in one bucket 

17           and say which -- just different metrics, 

18           right?  And so it's hard sometimes to say 

19           this one's better than that, because they 

20           just -- their goals are different.

21                  CHAIRWOMAN KRUEGER:  I would agree, 

22           although then I would probably modify my 

23           question:  Give me the top five goals, and 

24           then give me the top 10 best and worst within 


                                                                   121

 1           each parameter.  Because you're right, there 

 2           are different goals for different programs.  

 3                  But surely it shouldn't be that hard 

 4           for us to be able to come up with -- 

 5           particularly because you're talking about 

 6           having metrics -- the list of the best and 

 7           the worst.  Because I can certainly think of 

 8           a few of the worst.  

 9                  But I'm not sure we ever do look at 

10           them that way, and I think it's really 

11           valuable each year to be taking a look at 

12           what we did put our money into and say, you 

13           know, we tried, that was worth a try, not a 

14           good model, versus, Wow, look at what we got 

15           out of this one, we should be replicating 

16           that, we should be, you know, celebrating 

17           that one and encouraging that.

18                  So that's just a suggestion, but I 

19           think it would be really valuable.

20                  ACTING COMMISSIONER GERTLER:  Well, 

21           you know -- and thank you for that 

22           suggestion.  I can just assure you that with 

23           every program that we have, we are going 

24           back, we're measuring ourselves against 


                                                                   122

 1           the -- you know, against the performance of 

 2           each of those, against those goals.

 3                  And as Kevin rightly pointed out, you 

 4           know, it's just different if it's part of an 

 5           economic development program versus an MWBE 

 6           program versus a job attraction versus a park 

 7           related to something.

 8                  So -- but, you know, we're happy to 

 9           and I'm certainly happy to have that 

10           conversation with you after the hearing and 

11           show you some of the different metrics that 

12           we use as part of all of those different 

13           types of programs.

14                  CHAIRWOMAN KRUEGER:  And I appreciate 

15           that, and I know, you know, we're all 

16           "New York Strong" and we think we do the best 

17           ever of anyone.  But I know that in national 

18           studies we come out pretty low on how much 

19           money we spend on economic development 

20           without getting return for our money.

21                  So I really do think it's not just a 

22           hypothetical, it's worth a serious look in 

23           New York State as to how much of our taxpayer 

24           dollars we're putting into programs that we 


                                                                   123

 1           claim exist so that we can create new 

 2           economic activity and new job opportunities 

 3           for the State of New York.  And I'm just not 

 4           sure that if we take a hard look, we're going 

 5           to be so happy with the results.  But the 

 6           fact is if we don't take a hard look, we're 

 7           not going to learn from the mistakes we've 

 8           made either.

 9                  And on that note, Opportunity Zones, a 

10           Trump administration model that has been 

11           written up almost on a national level as what 

12           will prove to be a very expensive and useless 

13           program.  It's a federal program, I get it, 

14           and we were told, come up with I guess 

15           geocoded maps of what areas would fit the 

16           qualifications.  And I'm not sure what's 

17           happened since.  But I'm very worried about 

18           the State of New York using up its tax 

19           dollars on this program, which pretty much 

20           everyone I believe in economics thinks was a 

21           scandal waiting to have the story written.

22                  So what do we know about Opportunity 

23           Zones right now?

24                  ACTING COMMISSIONER GERTLER:  Yeah, 


                                                                   124

 1           just, you know, very quickly.  ESD's role was 

 2           to -- in partnership with our sister agency, 

 3           HCR, we designated, you know, the zones.  It 

 4           is a federal program.  Actually, Pravina led 

 5           those efforts at ESD so, you know, she can 

 6           provide even more detail.

 7                  CHAIRWOMAN KRUEGER:  And yet she will 

 8           have to do so by reaching out to me after 

 9           this hearing, because my clock is at zero, so 

10           I'm not allowed to let her answer now.  

11                  But you'll follow up with me, right?  

12                  ACTING COMMISSIONER GERTLER:  We 

13           absolutely -- we absolutely will.

14                  CHAIRWOMAN KRUEGER:  Thank you.

15                  ACTING COMMISSIONER GERTLER:  Thank 

16           you.

17                  CHAIRWOMAN KRUEGER:  Assembly.

18                  CHAIRWOMAN WEINSTEIN:  Next we have 

19           Assemblywoman Buttenschon, three minutes.

20                  ASSEMBLYWOMAN BUTTENSCHON:  Thank you, 

21           Chair.  And thank you, Commissioner, for 

22           being here today.

23                  I want to support the comments of 

24           Chair Stirpe regarding small business needs 


                                                                   125

 1           and including those owners on our REDC teams, 

 2           as well as Chair Otis's comments about the 

 3           importance of reviewing innovative thinking 

 4           that may come from other states.

 5                  I want to thank your regional staff 

 6           for the support with Cree and currently with 

 7           Remington Arms and the new Roundhill company, 

 8           as we see in Ilion, New York.  This is so 

 9           important.  And I'll talk further offline 

10           with you.

11                  As ESD provides assistance and 

12           guidance to build back and reopen our 

13           businesses, the Governor makes information 

14           public through press conferences and then it 

15           appears there's a lag of when your office has 

16           this information to bring to our businesses.  

17           Our businesses are eager to open and want 

18           clarity on this.  I wanted to know if you're 

19           aware of this and if you see a way to remedy 

20           it.

21                  My second question:  Many of my 

22           colleagues discussed broadband concerns, and 

23           I do concur with them.  However, you did 

24           mention the $15 a month program, and I'm 


                                                                   126

 1           wondering if there's any compensation for our 

 2           small internet businesses, as they will be 

 3           offering a reduction to their customers and 

 4           who will be able to pick up that difference?  

 5                  And finally, I am still hearing from 

 6           our minority and women-owned businesses that 

 7           put in timely applications, and they find 

 8           that the process is still quite lengthy and 

 9           the turnaround is still very slow.  I wanted 

10           to know if you're aware of it and if you have 

11           any remedies for this.  

12                  Thank you.

13                  ACTING COMMISSIONER GERTLER:  Great.  

14           Thank you for those questions.

15                  Let me see, let me start with the last 

16           question first on the MWBEs.  And we're 

17           certainly, you know, constantly in touch with 

18           all of our applicants.  We have emphasized 

19           streamlining the application and making it 

20           much easier to complete.  In fact, we've 

21           streamlined it by 30 percent.  

22                  What we've also done is we've also 

23           done outreach with third parties to help to 

24           complete that application so that when it 


                                                                   127

 1           comes in, there's much less back and forth of 

 2           going through that.  You know, clearly that 

 3           program has had, you know, a great deal of 

 4           success, I've cited the numbers --

 5                  ASSEMBLYWOMAN BUTTENSCHON:  Yes, you 

 6           have, and thank you for that information.  

 7           But I want to say that I'm still hearing that 

 8           there's problems.  So thank you.

 9                  ACTING COMMISSIONER GERTLER:  Okay.  

10           Okay.  Well, you know, we continue to look 

11           for ways to improve the process.  We've done 

12           a number of different things recently to 

13           improve it, as I said -- streamlining it, 

14           adding staff, using third parties.  It's an 

15           important part of what we do.  

16                  We emphasize the work that we do at 

17           MWBE, and we'll continue to look for ways to 

18           respond.  I apologize, I'm out of time.  I'm 

19           happy to talk to you afterwards about the 

20           information flow and about the broadband.

21                  Thank you.

22                  CHAIRWOMAN WEINSTEIN:  Thank you.  

23                  Senate, do you have any more?

24                  CHAIRWOMAN KRUEGER:  I'm looking, and 


                                                                   128

 1           I do not think we do.  So I think, Assembly, 

 2           you should just make a run for it here.

 3                  CHAIRWOMAN WEINSTEIN:  We will, we 

 4           have about a dozen members, so we'll just go 

 5           through the list.  And, Senator Krueger, you 

 6           can stretch your legs for a few minutes.

 7                  So next we have Assemblyman Rodriguez.

 8                  Robert?

 9                  ASSEMBLYMAN RODRIGUEZ:  Great.  Can 

10           you hear me?  Great.  Thank you, President.

11                  So I want to focus on a couple of 

12           questions.  Of the $100 million New York 

13           Forward Loan Program, how much of that has 

14           been deployed and how much is left, at this 

15           point?  

16                  ACTING COMMISSIONER GERTLER:  So the 

17           New York Forward Loan Fund was put together 

18           during the height of COVID.  So let's just 

19           provide some context.  That was at a time 

20           when many of the small businesses and many of 

21           the MWBE businesses were unable to -- you 

22           know, to access any source of -- any source 

23           of funds.  And so what we put together was a 

24           $100 million fund and -- you know, of which 


                                                                   129

 1           the state had $20 million in loan loss 

 2           reserves.

 3                  At this point I would say that it's 

 4           about -- just slightly under $40 million has 

 5           gone out the door.  There's about $60 million 

 6           still to be deployed.  

 7                  What I might also note -- and this has 

 8           been -- you know, this was a goal of the fund 

 9           and one of the reasons for developing this 

10           fund.  Almost 66 -- two-thirds of the money 

11           have gone to MWBE firms.  And that was 

12           critical because the whole point of that was 

13           to help companies, particularly MWBEs, that 

14           were having trouble accessing traditional 

15           capital sources.  

16                  So, you know, we're very pleased with 

17           the percentage of money that's going to 

18           MWBE firms.

19                  ASSEMBLYMAN RODRIGUEZ:  Okay.  Well, I 

20           certainly echo my colleagues' concerns about 

21           the cut to the MWBE resources, but I don't 

22           want to spend any more time on that issue, I 

23           think you've gotten the message on that.

24                  ACTING COMMISSIONER GERTLER:  Sure.


                                                                   130

 1                  ASSEMBLYMAN RODRIGUEZ:  I want to 

 2           focus the rest of my time on the restaurant 

 3           initiatives, and speaking specifically about 

 4           a program that I've brought forward to the 

 5           Executive that I think is an important model, 

 6           going on the Senator's comments about models 

 7           that work.  

 8                  We have seen, in places like East 

 9           Harlem, the five boroughs, things like 

10           the World Central Kitchen, where we're able 

11           to support restaurants to deal with food 

12           insecurity.  That actually is a model that 

13           will helps the restaurants be able to ramp up 

14           capacity, provide meals for places that are 

15           food-insecure.  

16                  You know, that, coupled with on 

17           February 2nd President Biden passed an 

18           executive order to allow the FEMA cost share 

19           for those programs that deal with food 

20           insecurity and restaurants to allow them to 

21           support -- to cover 100 percent of the costs 

22           associated with this program.  

23                  So I think there's an opportunity.  

24           We've made the ask of -- you know, that 


                                                                   131

 1           $25 million be allocated to help our 

 2           restaurants be able to get back on their 

 3           feet, hire and deal with the food insecurity 

 4           that's occurring here, separate from the tax 

 5           credit program.  

 6                  So I wanted to bring that to your 

 7           attention, and hopefully it's something that 

 8           you can pursue immediately, knowing that 

 9           there's an opportunity for FEMA support 

10           through SNAP to help this program, you know, 

11           help restaurants today.

12                  ACTING COMMISSIONER GERTLER:  Thank 

13           you for bringing that to my attention.  I 

14           appreciate that.

15                  CHAIRWOMAN WEINSTEIN:  Thank you.

16                  Now we go to Assemblywoman Griffin.

17                  Is Judy there?

18                  THE MODERATOR:  She might be having a 

19           little trouble.  We can probably come back to 

20           her.

21                  CHAIRWOMAN WEINSTEIN:  Okay.  So I 

22           know a number of people have committee 

23           meetings also.  

24                  So we go to Assemblywoman Gallagher.


                                                                   132

 1                  ASSEMBLYWOMAN GALLAGHER:  Okay.  Can 

 2           you see me and hear me?

 3                  CHAIRWOMAN WEINSTEIN:  Yes, we can.

 4                  ACTING COMMISSIONER GERTLER:  I can.

 5                  ASSEMBLYWOMAN GALLAGHER:  Okay, great.  

 6                  Thank you so much for taking my 

 7           question.  I know you've had quite a few 

 8           questions on commercial rent debt and the 

 9           crisis confronting small businesses, but I do 

10           want to drill down on it since it's a crucial 

11           part of restoring our local economies.  Even 

12           before the pandemic, commercial rents in 

13           New York City were astronomical, artificially 

14           inflated by commercial mortgages that require 

15           minimum rents, which are then further 

16           distorted by those mortgages that are 

17           securitized and traded by financial 

18           institutions.  

19                  The result is high-rent blight, and 

20           you could see it in vacant storefronts all 

21           across the city even before the shutdown last 

22           year.

23                  Here in the 50th Assembly District 

24           we've lost more than a hundred small 


                                                                   133

 1           storefront businesses, and many more are 

 2           hanging on by a thread.  I continue to be 

 3           concerned that there's nothing that's been 

 4           laid out here today or in the Governor's 

 5           Executive Budget to propose to meet the scale 

 6           of this crisis.  But there are some ideas out 

 7           there that I think could help and that I'm 

 8           hoping you can respond to.

 9                  Would Empire State Development support 

10           legislation or policies that would void 

11           minimum rent terms in existing future 

12           commercial mortgages?  And would your 

13           department support the imposition of 

14           graduated vacancy taxes for landlords that 

15           sit on vacant storefronts for extended 

16           periods of time?

17                  ACTING COMMISSIONER GERTLER:  You 

18           know, thank you for those questions.

19                  Let me tell you what we have been 

20           focused on at ESD.  I think the question 

21           of -- that you bring up of, in a sense, 

22           mortgage regulation, I think that's, you 

23           know, a question that, you know, my 

24           colleagues at Department of Financial 


                                                                   134

 1           Services are more expert at responding to.  

 2                  I will tell you that, you know, we 

 3           have put forth a number of different 

 4           important, you know, proposals and programs 

 5           to help in this case.  As you know, the 

 6           Governor extended the commercial eviction 

 7           moratorium.  That's been critical at a time 

 8           when we know so many businesses are 

 9           struggling.  

10                  We also had the New York Forward Small 

11           Business Lease Assistance Program to help 

12           small businesses and landlords work out a 

13           mutually beneficial agreement.  

14                  And we've also had the New York 

15           Forward Loan Fund, which works with both 

16           small businesses and it also works with small 

17           landlords and nonprofits to help in that 

18           situation.

19                  I've also been heartened to see that, 

20           you know, a lot of landlords throughout the 

21           city and the state, you know, understand and 

22           recognize the issues here and, you know, the 

23           crisis that we're facing, the way many of 

24           their tenants have struggled.  And they have 


                                                                   135

 1           independently worked on resolutions with 

 2           their tenants to keep them.  

 3                  So I think there's a lot going on 

 4           here, and I think that there's other 

 5           questions that are probably better for other 

 6           agencies that can give you the detail that 

 7           you're looking for.  But thank you for those 

 8           questions.  

 9                  Thank you.

10                  CHAIRWOMAN WEINSTEIN:  Is 

11           Assemblywoman Griffin back?

12                  THE MODERATOR:  Yes, she is here.

13                  CHAIRWOMAN WEINSTEIN:  Okay, great.

14                  ASSEMBLYWOMAN GRIFFIN:  (Muted.)

15                  THE MODERATOR:  We can't hear you.  

16           Try talking while you're muted.  No, we still 

17           can't hear you.

18                  ACTING COMMISSIONER GERTLER:  It says 

19           you're muted.  I'm sorry, I don't hear her 

20           question.  

21                  CHAIRWOMAN WEINSTEIN:  Judy, we 

22           can't -- we can't hear you.  So it must be -- 

23           we can give you a second to figure it out.  

24           Otherwise, we'll move on and -- we have quite 


                                                                   136

 1           a few members -- we'll come back to you.

 2                  ASSEMBLYWOMAN GRIFFIN:  Can you hear 

 3           me now?  

 4                  CHAIRWOMAN WEINSTEIN:  Yes.

 5                  ASSEMBLYWOMAN GRIFFIN:  Okay, perfect.  

 6           Okay, I don't know why that took so long.  

 7           Thank you, Chairs.  Thank you for your 

 8           patience.

 9                  Good morning, Commissioner Gertler.

10                  ACTING COMMISSIONER GERTLER:  Good 

11           morning.

12                  ASSEMBLYWOMAN GRIFFIN:  I represent 

13           southwestern Nassau County, which is full of 

14           struggling businesses which are under 25 and 

15           50 people.  Many are restaurants, bars, 

16           florists, small clothing stores, delis, 

17           bakeries, ice cream shops, salons, bowling 

18           alleys, gyms, fitness centers, dance studios 

19           and theaters.  

20                  These businesses are the heart of each 

21           community I represent, and they really seem 

22           to have been left out of support and 

23           assistance.  And, you know, I always hear of 

24           the bigger businesses getting the assistance.  


                                                                   137

 1           And so my question is -- like now I'll just 

 2           give you all the questions and see if you 

 3           have time to answer them.

 4                  Can I expect to see any awards given 

 5           out to them in 2021, you know, from either 

 6           the -- you know, from any of the programs?  

 7           Or is it more likely that -- like from the 

 8           REDC awards?  Or is it more likely the 

 9           Pandemic Recovery and Restart Program would 

10           support them?  

11                  I'm also wondering will any funding be 

12           allocated to the Small Business Development 

13           Center in Farmingdale and around these 

14           centers across the state so you could have a 

15           more regional look at this and more regional 

16           help for these businesses in every community 

17           on Long Island and across the state.

18                  Those are my questions.  One more, if 

19           you have time, would be I'm really excited 

20           about the Baldwin DRI, it's almost complete.  

21           I'm just wondering what the update is when 

22           we're going to hear the final selection of 

23           projects.  

24                  So if you can answer any of those 


                                                                   138

 1           questions, I'd greatly appreciate it.  

 2                  Thank you.

 3                  ACTING COMMISSIONER GERTLER:  Thank 

 4           you.

 5                  Where to begin.  But let me start with 

 6           our emphasis on small business.  You know, 

 7           that's critical.  I've said it multiple times 

 8           during this hearing, but it's worth 

 9           repeating:  You know, small businesses are 

10           the backbone of this economy.  And that is 

11           why we have implemented and have, you know, 

12           many different programs to help small 

13           businesses.  

14                  So, you know, we know that small 

15           businesses across the state have struggled 

16           during COVID.  One of the programs that we 

17           have put forward for small businesses is one 

18           that is a $50 million recovery program.  

19           That's focused on those that are in the 

20           hardest-hit industries.  You mentioned some 

21           of those -- arts and entertainment and 

22           recreation, you know, tourism.  And, you 

23           know, those businesses are eligible up to -- 

24           it's a $50 million program and they're 


                                                                   139

 1           eligible up to $50,000, $5,000 credits for 10 

 2           employees.  

 3                  In the time, what I will just say is 

 4           that as part of our, you know, program where 

 5           we've used $7.5 million to help small 

 6           businesses -- you know, we supported the 

 7           SBDCs through -- I think that's a critical, 

 8           you know, part of the ways that we're 

 9           helping.  

10                  And what I'll do, in the interests of 

11           time, is I'll have our Small Business 

12           Division follow up with you with the many 

13           different programs that we have, and we'd be 

14           happy to do so.  So thank you.

15                  ASSEMBLYWOMAN GRIFFIN:  Thank you.

16                  CHAIRWOMAN WEINSTEIN:  We go to 

17           Assemblyman Jones.  

18                  ASSEMBLYMAN JONES:  Yes.  Hello.  Hi, 

19           Commissioner, how are you?  It's great to be 

20           with you today.  

21                  ACTING COMMISSIONER GERTLER:  Hello, 

22           how are you?

23                  ASSEMBLYMAN JONES:  Good.  

24                  I only have a short time, so I'm going 


                                                                   140

 1           to get right in it, get my questions off and 

 2           my comments, and hopefully you can answer 

 3           them.  

 4                  Broadband, I know it's been brought 

 5           up.  I apologize, I've been in and out of 

 6           Zoom meetings and committee meetings myself.  

 7           You know, we talk about all the obstacles and 

 8           getting broadband to our rural areas and 

 9           actually to everywhere in New York.  I heard 

10           you say something about it's no longer a 

11           question of accessibility, it's now 

12           affordability.  I tend to be on the -- you 

13           know, I will respectfully disagree with you, 

14           and I can bring you up to the North Country 

15           and take you to some places where we don't 

16           have that accessibility.  There's many 

17           reasons for that.  I would like to see this 

18           program expanded, extended.  

19                  You know, our small companies up here 

20           are trying to get our customers hooked up, 

21           but we have many obstacles that New York 

22           State keeps putting in their way.  I heard 

23           the DOT tax mentioned in that.

24                  My question is, I like the idea of 


                                                                   141

 1           $15 broadband and $15 internet service.  How 

 2           are we going to pay for it?  How is -- who is 

 3           going to pay for that?  I don't see anything, 

 4           you know, in the budget that can pay for this 

 5           expansive program on that.

 6                  My second -- I know MWBEs were 

 7           mentioned.  I'm sorry, this program is not 

 8           working.  It's not getting our minority and 

 9           women-owned businesses certified, it's just 

10           not.  I can tell you horror stories about 

11           people that I know, that women own these 

12           businesses and they can't prove to your 

13           agency that they own these businesses, and 

14           it's heartbreaking.  I've heard of couples 

15           actually going to get divorced to try to 

16           prove that the woman owns the company.  

17                  Something has to be done.  I have one 

18           case in particular -- and I know we can't 

19           talk individual cases here, but where they've 

20           called for three years to the agency.  We -- 

21           they get ahold of my office, we call them, 

22           they say, Oh, well, we're still investigating 

23           it.  They don't get a call back for six 

24           months.


                                                                   142

 1                  I don't know, this program has to 

 2           be -- there has to be something done.  I can 

 3           talk to Kevin about it offline.  I'm not a 

 4           grandstander, I'm just -- we're very 

 5           frustrated with some of these things.  So if 

 6           you can just, you know, comment -- answer my 

 7           first question, comment on my second.  I 

 8           respectfully do this, we can talk about it 

 9           offline, but we need some answers for some of 

10           these women-owned businesses.

11                  ACTING COMMISSIONER GERTLER:  Sure.  

12           And again, I would be happy, in the interests 

13           of time, to also talk to you offline.  

14                  You know, with respect to the MWBE 

15           program, you know, I have to say that -- you 

16           know, let's look at the statistics.  We, 

17           really truly have a nation-leading program, 

18           29.5 percent participation rate, over 

19           $3 billion annually.  And let's go through 

20           all the ways that we've improved that 

21           program.  

22                  On broadband, we continue to look for 

23           ways to ensure that we have accessibility, 

24           but we have a 99.9 percent commitment on 


                                                                   143

 1           broadband.  We're at 98 percent right now.  

 2           And even still, the team is relentless in 

 3           finding others ways to continue to ensure 

 4           that we have the very best broadband for the 

 5           peoples of New York.

 6                  The example that I cite is that even 

 7           though New York State was ruled to be 

 8           categorically ineligible for the FCC's Rural 

 9           Digital Opportunity Fund, the team at ESD, 

10           with our Washington office, was able to 

11           secure $100 million to continue our efforts 

12           to ensure that we've got the critical fiber 

13           infrastructure in rural areas around New York 

14           State.  

15                  So, you know, I want to make sure that 

16           you realize that we are continuing, 

17           notwithstanding the levels of success that we 

18           believe that we've had and the foresight that 

19           the Governor had four or five years ago to 

20           invest $500 million to ensure that we had 

21           nation-leading broadband -- we are still 

22           continuing to make sure that we deliver the 

23           very best broadband that we can to all the 

24           peoples of New York, and at an affordable 


                                                                   144

 1           rate.

 2                  ASSEMBLYMAN JONES:  Okay, thank you.  

 3           I'd love to speak with you offline on a few 

 4           of those issues.

 5                  ACTING COMMISSIONER GERTLER:  Thank 

 6           you.  Of course, sir.  Thank you.

 7                  ASSEMBLYMAN JONES:  Thank you.  

 8                  CHAIRWOMAN WEINSTEIN:  We go to 

 9           Assemblyman Conrad.

10                  ASSEMBLYMAN CONRAD:  Thank you, Chair.  

11                  And thank you, Commissioner, for being 

12           here.  I know it's a long day and we're all 

13           hopping around.

14                  ACTING COMMISSIONER GERTLER:  Thank 

15           you.

16                  ASSEMBLYMAN CONRAD:  I want to 

17           speak -- first of all, I appreciate your 

18           comments early on about your -- the approach 

19           of bottom-up economic development.  I'm a 

20           firm believer in that and making New York 

21           State resilient.  I'm a big fan of the 

22           43North start-up in Western New York, as well 

23           as I want to speak about the advocacy for 

24           small businesses my peers have here today.


                                                                   145

 1                  But right now I believe that we're in 

 2           a transformational economy.  You know, the 

 3           COVID crisis has, you know, rapidly pushed 

 4           things that maybe were going to be five or 

 5           10 years away, from internet sales and so on.  

 6                  But I want to talk particularly about 

 7           small business, particularly what we call 

 8           gazelles, or Tier 2 companies.  I don't know 

 9           if you know what I'm referring to, these -- 

10           they make up 3 to 5 percent of small 

11           businesses, and they are companies that are 

12           producing things that are scalable and unique 

13           that are going to be exported.  And I know 

14           you spoke on that earlier.  

15                  My question is, what are we doing 

16           right now -- I know that the GRE in Rochester 

17           has a pretty impressive program of economic 

18           gardening:  Targeting these companies, 

19           recruiting them, identifying the assets, 

20           creating resource partners for them and 

21           putting together a delivery system to a 

22           targeted audience.

23                  My question is -- and I know that 

24           COVID has certainly put, you know, other 


                                                                   146

 1           things on your priority plate.  But where are 

 2           we in maybe scaling out that type of program 

 3           and focusing on these companies and getting 

 4           away from what I call these Tier 3 companies, 

 5           these big large companies where we kind of do 

 6           that trickle-down approach and where they 

 7           come in, but they tend to commoditize 

 8           wages -- you know, they try to pay as little 

 9           as they can.  

10                  Where are we in shifting from the 

11           Tier 3 to a Tier 2 emphasis?

12                  ACTING COMMISSIONER GERTLER:  Well, 

13           first let me say that I had not heard of the 

14           concept "gazelles."  I have heard of the 

15           concept "unicorns."  So I hope if you don't 

16           mind if I actually start to use that concept.

17                  (Laughter.)

18                  ASSEMBLYMAN CONRAD:  Not a problem.

19                  ACTING COMMISSIONER GERTLER:  So -- so 

20           thank you.

21                  ASSEMBLYMAN CONRAD:  Mine's not 

22           mythical, though.  Mine's not mythical, okay?  

23                  ACTING COMMISSIONER GERTLER:  

24           (Laughing.)  Well, we'd like to then -- I'd 


                                                                   147

 1           like to ensure that we see more gazelles and 

 2           more unicorns in New York State.

 3                  But, you know, be that as it may, just 

 4           a few things.  We -- and you're absolutely 

 5           right, COVID accelerated many of -- many 

 6           aspects of our economy, whether it's been the 

 7           inequities and the disparate effects that 

 8           it's had on small businesses, or it's forced 

 9           companies to deal with the digital realities 

10           of -- that they face as a business.

11                  So, you know, in no priority, there 

12           are so many things that we do in this area, 

13           so many different resources.  During COVID we 

14           did initiate a program called Empire State 

15           Digital, which is a series of partners to 

16           help small businesses be able to start to be 

17           more digital-fluent, be able to do more, you 

18           know, online, have a digital presence.  

19                  And then very quickly, in the 

20           interests of time, we use many of our centers 

21           around the state that help small and medium 

22           and even large businesses.  We have our 

23           manufacturing extension partnerships, and 

24           certainly we use economic incentives.  So 


                                                                   148

 1           there's a whole range of tools that we use.  

 2                  But happy to talk to you offline about 

 3           that as well.  And thank you for sharing the 

 4           expression "gazelles."

 5                  ASSEMBLYMAN CONRAD:  You're welcome.

 6                  ACTING COMMISSIONER GERTLER:  

 7           (Laughing.)

 8                  ASSEMBLYMAN CONRAD:  Thank you.  

 9                  CHAIRWOMAN WEINSTEIN:  So we go to 

10           Assemblywoman Giglio.

11                  ASSEMBLYMAN GIGLIO:  Yes, hi.  I just 

12           have a question about the -- there's a bill 

13           that's being proposed right now, it is 

14           Bill Number A3190, which has $500 million, is 

15           what I'm being told, so that commercial 

16           property owners that have small businesses 

17           that rent from them can access some of that 

18           funding to offset the rental costs or the 

19           rental lease dollar amount.  

20                  So I'm wondering if that's funded, the 

21           $500 million, in support of this bill to keep 

22           our Main Streets alive.  

23                  ACTING COMMISSIONER GERTLER:  I 

24           apologize, I'm not familiar.  That may not be 


                                                                   149

 1           an ESD initiative, so I -- Kevin, are you 

 2           familiar with this?  I apologize, I'm just 

 3           not sure about what you're referring to.

 4                  ESD COO YOUNIS:  No, I'm not either, 

 5           I'm sorry.  

 6                  ACTING COMMISSIONER GERTLER:  We're 

 7           happy to look into it and come back to you.  

 8           But I apologize, I don't have any background 

 9           on that.

10                  ASSEMBLYMAN GIGLIO:  Yeah, that would 

11           be great.

12                  And then my second question is about 

13           tip credits for -- the hospitality industry 

14           is eligible still for the tip credits, or was 

15           through 2020.  And in 2021 it was taken away 

16           for the car washes and for the nail salons.  

17           And I'm just wondering, those are small 

18           businesses also that are struggling through 

19           this pandemic, and what we can do about 

20           getting those tip credits back to those small 

21           business owners, so that it's not just the 

22           hospitality industry.

23                  ACTING COMMISSIONER GERTLER:  You 

24           know, Pravina, do you want to provide some 


                                                                   150

 1           insight on that, please?

 2                  ESD EVP RAGHAVAN:  We could look into 

 3           it.  We will work with your company.  At the 

 4           moment we haven't been looking through the 

 5           legislation to figure out which industries 

 6           yet, we're still doing the analysis to see 

 7           which have been most impacted by COVID.  

 8                  But we will get back to you on that.

 9                  ASSEMBLYWOMAN GIGLIO:  Okay, and then 

10           having --

11                  (Overtalk.)

12                  ACTING COMMISSIONER GERTLER:  I 

13           apologize.  Sorry.

14                  ASSEMBLYWOMAN GIGLIO:  That's okay.  

15           Having a former Grumman facility in my 

16           district, in the Town of Riverhead, they have 

17           a buyer for a $40 million contract for a 

18           10 million square foot buildout, and they 

19           seem to be held up in New York State DEC and 

20           other regulatory agencies where they can't 

21           get the subdivision map approved.  

22                  What is ESD doing to help them to try 

23           and get that subdivision map approved so that 

24           the sale can occur and we can start creating 


                                                                   151

 1           the jobs that we lost when Grumman left?

 2                  ACTING COMMISSIONER GERTLER:  You 

 3           know, it sounds like this is an issue right 

 4           now that DEC is -- you know, is addressing.  

 5           We're happy to, after this hearing, to talk 

 6           to our colleagues at DEC to see if there's -- 

 7           that there's anything we can do to help.

 8                  I'm also happy to discuss this with 

 9           our regional office out there and see what 

10           else we can do.  And look, obviously in these 

11           times, you know, we care about jobs, we're 

12           focused on jobs.  So let's see what, you 

13           know, what help we can provide.

14                  ASSEMBLYWOMAN GIGLIO:  That would be 

15           great.  They've had unmanned aerial vehicle 

16           companies, they've had offshore wind 

17           interested in coming, manufacturing.  They 

18           have runways.  And it's been since 2016 that 

19           they've been trying to get this subdivision 

20           map approved.

21                  ACTING COMMISSIONER GERTLER:  

22           Understood.  I'm happy to follow up with you, 

23           and we'll look into it.

24                  ASSEMBLYWOMAN GIGLIO:  Thank you.


                                                                   152

 1                  ACTING COMMISSIONER GERTLER:  Thank 

 2           you.  

 3                  CHAIRWOMAN WEINSTEIN:  Thank you.  

 4                  We go to Assemblywoman Seawright.

 5                  ASSEMBLYWOMAN SEAWRIGHT:  Thank you, 

 6           Chairwoman Weinstein.  And thank you, 

 7           Commissioner Gertler.  We're fortunate to 

 8           have your vast experience both in the private 

 9           and public sector in this important 

10           leadership position.

11                  I just have two quick questions.  I 

12           represent Cornell Tech on Roosevelt Island 

13           and Marymount Manhattan College on the 

14           Upper East Side.  So what is being done with 

15           our private colleges as well as our public 

16           CUNY and SUNY to encourage graduates to go 

17           into some kind of a career pipeline with 

18           business and with industry as they contribute 

19           to the tax base once they graduate?  

20                  I think it's important to our economy 

21           and the vitality of our economics that we 

22           include these graduates in some kind of 

23           pipeline program.

24                  ACTING COMMISSIONER GERTLER:  I agree.  


                                                                   153

 1                  You know, first of all, thank you for 

 2           those kind remarks.  All I can say is that 

 3           it's been a privilege leading ESD, and I'm 

 4           backed by an incredibly talented and 

 5           hardworking team at the agency who have 

 6           worked tirelessly over the past year.

 7                  You know, certainly as part of the 

 8           Governor's Workforce Development Initiative, 

 9           that's been a program that goes across 

10           agencies.  SUNY and CUNY play a critical role 

11           in that.  You know, there's many ways 

12           specifically they do it.  But what is -- and 

13           obviously all that work needs to continue.  

14                  We have seen a number of successes 

15           coming that from that.  I know when we're 

16           talking to companies, they want to be in 

17           New York because of our talented workforce 

18           because of the STEM degrees that they have.  

19           And we are seeing that among that younger 

20           group, we're seeing an increasing number of 

21           young in New York, sort of 25 to 34 age and 

22           those that now have college degrees and STEM 

23           degrees.  

24                  So I think that's an indication that, 


                                                                   154

 1           you know, that the work that we're doing on 

 2           workforce development and the work that 

 3           our -- that SUNY and CUNY are doing to help, 

 4           you know, enhance that pipeline is also 

 5           working.  It's as critical as ever in a 

 6           post-COVID world.  

 7                  So thank you for that question.

 8                  ASSEMBLYWOMAN SEAWRIGHT:  And I just 

 9           have a quick second question on MWBEs.

10                  ACTING COMMISSIONER GERTLER:  Sure.

11                  ASSEMBLYWOMAN SEAWRIGHT:  What is the 

12           planned outreach to encourage MWBE firms to 

13           have an opportunity to participate in the 

14           broadband projects?  

15                  And I also want to just echo the 

16           remarks of Assemblywoman Buttenschon and 

17           Assemblyman Billy Jones on -- you know, I 

18           have constituents calling my office looking 

19           for help with their MWBE licenses, and it's 

20           very frustrating.  

21                  But it's an important program, it's 

22           one that I believe in, and I would like to 

23           know what the plan is for greater outreach so 

24           that MWBE firms can participate in the 


                                                                   155

 1           broadband projects.  

 2                  ACTING COMMISSIONER GERTLER:  Well, 

 3           thank you.  Let me just say very quickly, in 

 4           the interests of time, that there's been 

 5           significant outreach.  And that outreach has 

 6           not gone unabated during COVID.  There's been 

 7           a number of virtual -- you know, outreach, 

 8           there's been training.  And we had our annual 

 9           MWBE Forum in December, all done virtually, 

10           2200 registrants.  So the work that that 

11           group does did not stop during COVID.  Lots 

12           of different outreach, both on the state 

13           level and on a regional basis.  

14                  So -- and we'll continue to look for 

15           other ways to reach out to this community.  

16           So thank you.

17                  ASSEMBLYWOMAN SEAWRIGHT:  Thank you, 

18           Commissioner.

19                  CHAIRWOMAN WEINSTEIN:  We go to 

20           Assemblywoman Fahy now.  Thank you.

21                  ASSEMBLYWOMAN FAHY:  Thank you, 

22           Commissioner.  Thank you for being here 

23           today.

24                  ACTING COMMISSIONER GERTLER:  Thank 


                                                                   156

 1           you.

 2                  ASSEMBLYWOMAN FAHY:  We really 

 3           appreciate you and so much of your work.  

 4                  So much has been covered, so forgive 

 5           me if some of this is repetitive, as I was 

 6           dealing with some other committees as well.

 7                  But I just want to reiterate what you 

 8           heard so much about -- small business, small 

 9           business, small business.  Right?  And 

10           including those jobs.  It is the lifeblood of 

11           the economy.  

12                  But the work -- you know, I am pleased 

13           that we're getting through to Washington.  We 

14           have to really target out our smallest 

15           businesses and tie it to bringing back 

16           workers.  We're hearing a lot from the 

17           creative economy, from artists and others.  

18           So tying this to jobs, so much of it is truly 

19           important.  

20                  Broadband access, it's -- the 

21           affordability is one of my key concerns.  I 

22           know you've heard a lot about that.  

23                  So now I want to switch to bigger 

24           issues, not small business.  Two issues.  


                                                                   157

 1           Wadsworth, I know your agency was a little 

 2           bit involved in the redo and the proposal to 

 3           redo and consolidate all the Wadsworth 

 4           science labs here in Albany.  Last year that 

 5           was -- well, the last few years it's been a 

 6           $750 million proposal.  While it's not in the 

 7           Governor's budget, my understanding is 

 8           there's still sort of a commitment.  

 9                  And so I just need to reiterate to you 

10           and to others that that would be the biggest 

11           public investment here in the Capital Region 

12           since SUNY Poly or since the investment in 

13           Global Foundries.  So it's that big, it's 

14           that important.  So I just want to get that 

15           on your radar screen.  I know you would be 

16           involved even though the funding was coming 

17           through DOH.  But it is -- it would be the 

18           biggest economic driver here.  

19                  So we are still looking for that.  I 

20           know it didn't make it in the 30-day 

21           amendments either.

22                  A question, now, switching gears again 

23           to another big event.  There's a lot of talk 

24           federally about the Highways to Boulevards.  


                                                                   158

 1           And I know you have helped lead some of the 

 2           efforts out in Buffalo on the Skyway proposal 

 3           there or the reimagining or tearing down some 

 4           of the Skyway.  I know you've been involved 

 5           somewhat in Syracuse.  

 6                  As you know, I've been talking a lot 

 7           about reimagining 787 here in Albany.  You've 

 8           helped lead the efforts in Buffalo.  Just 

 9           wondering if that is on your screen.  As you 

10           know, we need to reimagine it and get a 

11           serious study first before we can even get in 

12           line for the 10 billion -- 10 billion -- that 

13           Chuck Schumer is talking about in Washington.

14                  So just wondering if you have heard 

15           much about this.  And again, it would be -- I 

16           know we overuse the term, but it would be 

17           absolutely transformative here in the Capital 

18           Region, and the goal of course is to reclaim 

19           the waterfront and reunite some communities 

20           that were cut off from that waterfront as 

21           well as the communities themselves.

22                  So just wondering if you've been 

23           involved or have this and --

24                  ACTING COMMISSIONER GERTLER:  So, you 


                                                                   159

 1           know, very quickly, I'll just -- in 

 2           20 seconds, Buffalo Skyway involved that -- 

 3           you know, that challenge started to bring 

 4           about a lot of inspiration.  And, you know, 

 5           our Department of Transportation is working 

 6           through those issues.  

 7                  And, you know, we'll -- you know, 

 8           obviously there's a lot of work still to be 

 9           done related to Buffalo, Buffalo Skyway.  But 

10           that challenge really kicked things off and 

11           really led to a lot of different ideas.  

12                  On Wadsworth, you know, a huge -- 

13           hugely important institution in New York, 

14           vital during COVID.  You know, doing so much 

15           great work.  That is led by -- you know, by 

16           DASNY, but obviously critical.  

17                  And then on your last point, you know, 

18           suffice it to say that there's been, you 

19           know, no governor that has emphasized 

20           infrastructure like Governor Cuomo, 

21           $306 billion program on infrastructure.  So 

22           that, obviously, all things infrastructure 

23           are a focus of this administration.  So -- so 

24           thank you.


                                                                   160

 1                  ASSEMBLYWOMAN FAHY:  Look forward to 

 2           working with you.  Thank you so much.

 3                  ACTING COMMISSIONER GERTLER:  

 4           Likewise, thank you so much.  

 5                  ASSEMBLYWOMAN FAHY:  Thank you, Chair.

 6                  ACTING COMMISSIONER GERTLER:  Great, 

 7           thank you.  

 8                  CHAIRWOMAN WEINSTEIN:  Sure.  

 9           Commissioner, we still have about eight 

10           Assemblymembers.  You okay going through, or 

11           do you need a quick break?  

12                  ACTING COMMISSIONER GERTLER:  I'm 

13           okay.  I would -- let's continue, that's 

14           fine.

15                  CHAIRWOMAN WEINSTEIN:  Okay.  Just 

16           wave if --

17                  ACTING COMMISSIONER GERTLER:  Okay.

18                  CHAIRWOMAN WEINSTEIN:  So we go to 

19           Assemblyman Woerner now.

20                  ACTING COMMISSIONER GERTLER:  Thank 

21           you, though.

22                  ASSEMBLYWOMAN WOERNER:  Thank you so 

23           much, Chairwoman.  

24                  And thank you, Commissioner, for being 


                                                                   161

 1           here and for your comprehensive testimony.

 2                  I want to quickly just give a shout 

 3           out to your team at ESD for the great work 

 4           that they did in the pandemic, managing the 

 5           essential business process and so forth.  

 6           Really solid performance.  Thank you so much.

 7                  I want to lend my voice to the voices 

 8           you've already heard about the 

 9           availability of broadband -- or, rather, the 

10           lack of availability of broadband throughout 

11           the rural communities particularly that I 

12           represent, although it's true in some of our 

13           suburban communities as well.

14                  You know, my question, however, is -- 

15           has to do with whether we are, in your 

16           opinion, getting as much for the dollar as we 

17           should be.  The Governor put in $500 million 

18           into the Broadband Program, not a small 

19           amount of money.  But based on some research 

20           I've been doing, since the -- since before 

21           2015, the cost per mile was $3400.  After the 

22           Broadband Program started, that cost per mile 

23           rose to $16,000.  And prior to 2015, the 

24           make-ready costs associated with any 


                                                                   162

 1           particular project were about 33 percent of 

 2           the total project.  After 2015, those 

 3           make-ready costs grew to greater than 

 4           50 percent of the cost of the project.

 5                  This is important because the 

 6           broadband companies are taxed based on the 

 7           cost of construction.  So their property tax 

 8           is based on the cost of construction.  And 

 9           the net result of all of this additional cost 

10           is that where prior to 2015 the break-even 

11           case for a broadband company was four houses 

12           per mile, it's now seven houses per mile.

13                  So my question for you is, as you go 

14           forward with broadband in this state -- and 

15           we do need to do more for broadband -- what 

16           will your agency do to help control the costs 

17           of these projects so that the state 

18           investment goes as far as it might go?

19                  ACTING COMMISSIONER GERTLER:  Sure.  

20                  First of all, I just want to thank you 

21           again for those kind comments about the staff 

22           at ESD.  I can tell you firsthand that we 

23           have some of the most committed public 

24           servants at ESD who worked around the clock 


                                                                   163

 1           to help New Yorkers around the state.  You 

 2           know, I know so many people have worked 

 3           hard -- everybody in the Legislature and 

 4           other agencies -- and it's just nice to 

 5           recognize that, and I wanted to provide that 

 6           shout-out for my team here at ESD who have 

 7           really done extraordinary work.  So thank 

 8           you.

 9                  I'm going to have Kevin Younis talk 

10           about the costs.  But, you know, if you go 

11           back to when the Governor announced the 

12           Broadband Program and $500 million, at that 

13           time 30 percent of New Yorkers lacked access.  

14           And almost -- somewhere in the neighborhood 

15           of I think two-thirds, but a huge number of 

16           people upstate didn't have access.

17                  So now we have commitments to 

18           99.9 percent.  I mean, that is, you know, a 

19           remarkable accomplishment.  That is 

20           significant improvement.  And quite frankly, 

21           as I've said this before, had that not 

22           started and the Governor, had he not had the 

23           foresight to be investing in broadband many 

24           years ago, we would have had, you know, real, 


                                                                   164

 1           real problems, you know, during COVID.

 2                  So, Kevin, can you please address some 

 3           of the costs and some of the issues that we 

 4           saw?  

 5                  ESD COO YOUNIS:  Sure.  Thanks, Eric.  

 6                  Thanks, Assemblywoman.  

 7                  I'll be real quick.  There's a lot 

 8           smarter people than me in our broadband 

 9           office, but I have had a chance to work 

10           closely with a number of them.  It's 

11           interesting, I think your observation -- you 

12           know, my hunch is because these are the 

13           hardest-to-reach places.  

14                  You know, before our program providers 

15           were going to areas where it was relatively 

16           affordable to do so.  Our program was 

17           designed to go to harder-to-reach places, and 

18           I think that's one of the reasons you might 

19           see a higher cost.  

20                  The other thing you referred to is 

21           the --

22                  ASSEMBLYWOMAN WOERNER:  The cost 

23           comparison -- excuse me.  The cost comparison 

24           is actually rural program to rural program.  


                                                                   165

 1           So this was cost in the North Country and 

 2           then cost in northern Washington County.  So 

 3           it is a -- they are comparable projects.

 4                  ESD COO YOUNIS:  Yes.  So again, I 

 5           will -- we will certainly have some folks 

 6           talk to you.  And I know as we've looked, 

 7           particularly as you get further and further 

 8           into the rural areas, the make-ready work 

 9           becomes more and more expensive.  In some 

10           cases, you know, we see poles that haven't 

11           been replaced in 50 years.  And so I know 

12           there's a lot of make-ready costs on -- up in 

13           those programs. 

14                  But, you know, I would be happy to get 

15           our folks to have a more detailed 

16           conversation with you.

17                  ASSEMBLYWOMAN WOERNER:  Thank you.

18                  CHAIRWOMAN WEINSTEIN:  We go to 

19           Assemblyman Smullen.

20                  ASSEMBLYMAN SMULLEN:  Thank you, 

21           Chair.  

22                  Thank you, Commissioner.  I really 

23           appreciate the opportunity to speak with you 

24           today.  


                                                                   166

 1                  I've got four questions.  I'll ask 

 2           them rather quickly and then circle back 

 3           around to the first question.  Because I know 

 4           I've got three minutes and we've got lots to 

 5           discuss.

 6                  The first question relates to 

 7           broadband.  And specifically, what tool does 

 8           the Broadband Program Office use to measure 

 9           speed and connectivity to rural areas in 

10           New York?  

11                  The second question has to do with the 

12           CFA rounds.  Will there be another Downtown 

13           Revitalization Initiative in this round?  If 

14           not, should our municipalities look towards 

15           next year to resubmit those applications -- 

16           {inaudible}. 

17                  The third question is, was 

18           Remington Arms considered to be labeled an 

19           essential business in this pandemic?  And if 

20           it was not, why wasn't it labeled an 

21           essential business?  

22                  And then the fourth question is, what 

23           is the percentage of women business 

24           applications, certifications in upstate 


                                                                   167

 1           New York under the MWBE certification program 

 2           that have been actually approved?  What was 

 3           approved?  

 4                  So circling back to broadband, I won't 

 5           echo what my colleagues have said, but I hear 

 6           from schools to say that their kids cannot be 

 7           online, they're on the wrong side of the 

 8           digital divide.  I hear from seniors that 

 9           want to do telehealth that they can't do it.  

10           I hear from people in the Adirondacks that I 

11           represent that they would love to live here 

12           but they can't telecommute to their jobs in a 

13           dense urban area or a large suburban area.  

14           And I also hear from businesses that really 

15           want to have high-speed connectivity so they 

16           can compete in the marketplace.

17                  So going back to the question, how is 

18           the Broadband Program Office actually 

19           measuring what my citizens in the 

20           118th Assembly District in upstate 

21           New York -- are they using a tool like 

22           speedtest.net, which does house-level data, 

23           or are they still using census-level data to 

24           get to that question?  


                                                                   168

 1                  Because I know -- you said there was 

 2           some FCC money out there.  I'd really love to 

 3           see that FCC money go to get to the bottom of 

 4           it for these folks.  Whether they get the 

 5           broadband through terrestrial or whether they 

 6           get most of it through terrestrial and the 

 7           rest of it through wireless, it doesn't 

 8           matter, we just need to get it to them.  

 9                  So how are we measuring it for our 

10           citizens?

11                  ACTING COMMISSIONER GERTLER:  You 

12           know, I very much appreciate the specificity 

13           of your questions and I want to make sure to, 

14           you know, give you, you know, the same 

15           specificity on our answers.  So, you know, we 

16           certainly use a number of third-party, you 

17           know, resources and maps to figure that out.  

18           Let me get to you the specific ways that we 

19           do that.  

20                  You know, we've got pretty granular 

21           information on many of these things, but I 

22           don't want to, you know, say something 

23           inaccurate, so I will come back to you on 

24           that.  We'll have our broadband office come 


                                                                   169

 1           to you.

 2                  ASSEMBLYMAN SMULLEN:  I really 

 3           appreciate that, Commissioner, because I know 

 4           there are tools out there like speedtest.net 

 5           that get down -- you know, they've got 

 6           servers everywhere, and they can ping your 

 7           mobile phone and tell you right now what 

 8           you're getting right here in the LOB.  

 9                  So let's double down on getting to the 

10           bottom of it for these folks.  People in the 

11           Town of Stratford would appreciate it.  Thank 

12           you.

13                  ACTING COMMISSIONER GERTLER:  Yeah, 

14           we'll do that.  And in the interests of time, 

15           I'll come back to you on the other questions.  

16                  But very quickly, yes, there will be 

17           another DRI round this year.  Thank you.

18                  ASSEMBLYMAN SMULLEN:  Thank you, sir.

19                  ACTING COMMISSIONER GERTLER:  Thank 

20           you.  

21                  CHAIRWOMAN WEINSTEIN:  We go to 

22           Assemblywoman Kelles now.

23                  ASSEMBLYWOMAN KELLES:  Thank you so 

24           much for your time.  I'm just going to jump 


                                                                   170

 1           right into comments and questions, given the 

 2           time frame.  

 3                  I do want to add my voice in concern 

 4           with respect to broadband.  At this point I 

 5           do respectfully disagree that we have 

 6           98 percent coverage.  Would love to get that 

 7           data on how it's collected.

 8                  And I know there was a bill that was 

 9           put forward last year that would have had a 

10           full assessment, but it was vetoed, which was 

11           a bit concerning.  And I recommend reviewing 

12           Congressman Brindisi's analysis that he did 

13           last year that actually shows the lack of 

14           coverage in at least the Southern Tier.

15                  And I did, with this, also want to add 

16           my concern about the DOT's PERM 75 tax that 

17           is significantly hurting broadband expansion.

18                  So jumping to my questions, one on 

19           childcare -- I'm just going to run through 

20           the three of them really quickly -- one on 

21           childcare being so critical for economic 

22           recovery.  I'd love to see the release right 

23           away of the emergency CARES aid that was 

24           given that still has not been released.  And 


                                                                   171

 1           I'm curious what plan the Governor has for 

 2           supporting sufficient subsidies for 

 3           income-qualifying families.  That was my 

 4           first question.

 5                  My second question, I wanted to ask 

 6           about the NYSTAR program that uses state 

 7           monies to leverage big federal science grants 

 8           and helps to create and keep high-tech jobs 

 9           in New York.  I know I saw that the budget 

10           process cut that funding from 6 million to 5 

11           million, so I just wanted to hear your 

12           comments on that.  

13                  And lastly, the 76West Business 

14           Competition, it's very important to my 

15           district.  And up until now it's been running 

16           through NYSERDA.  But I understand that the 

17           idea was that ESD was going to fund its 

18           continuation through 2023 and get funded 

19           through the Upstate Revitalization Fund.  Is 

20           this still the plan?  

21                  So those are my questions.

22                  ACTING COMMISSIONER GERTLER:  Okay.  I 

23           think -- well, let me start with your first 

24           question.  Thank you, those are all, you 


                                                                   172

 1           know, very important questions and -- let's 

 2           get to childcare, because childcare is 

 3           critical.  And, you know, if anything, COVID 

 4           exposed the need for even -- you know, even 

 5           better support of childcare across the state.

 6                  You know, ESD will be using its 

 7           incentive tax credits to be able to support 

 8           childcare both in terms of a facility and in 

 9           terms of an ongoing program.  And that 

10           obviously complements the Governor's larger 

11           program, you know, to invest to reduce the 

12           burdens of parent subsidy copays and also 

13           provide start-ups in areas where you can't do 

14           childcare.

15                  In the interests of time, in terms of 

16           New York STAR, you know, Pravina is on -- we 

17           have lots of information.  Let us come back 

18           to you on both, you know, 76West 

19           Competition -- I was there, a great 

20           competition.  We want that to -- you know, 

21           we've loved seeing, you know, all the 

22           successes come out of that.  So let's come 

23           back to you on those other two questions.

24                  ASSEMBLYWOMAN KELLES:  Thank you.


                                                                   173

 1                  ACTING COMMISSIONER GERTLER:  Thank 

 2           you.

 3                  CHAIRWOMAN WEINSTEIN:  So now we go to 

 4           Assemblywoman Lunsford.

 5                  Is Jennifer here?

 6                  ASSEMBLYWOMAN LUNSFORD:  Hello.  Thank 

 7           you so much.  I want to pick up on childcare 

 8           as well.  You know, I think that this 

 9           pandemic has really highlighted something for 

10           us that we have long known, which is that 

11           childcare is an economic issue.

12                  So I'd like to ask if ESD has any 

13           programs, either existing or in the works, to 

14           help promote access to childcare and to 

15           support businesses that are providing 

16           childcare access as a benefit.  To that end, 

17           I also want to ask about whether access to 

18           childcare is a criterion in the REDC project 

19           assessment process in each region.  

20                  And then I have a second CFA question, 

21           which is whether you are evaluating 

22           sustainability and environmental justice as 

23           part of that evaluation process.

24                  ACTING COMMISSIONER GERTLER:  Sure.  


                                                                   174

 1           You know, I just responded to some of the 

 2           ways that childcare is being handled by ESD.  

 3           I'm going to have Kevin Younis come and 

 4           provide more color on that, but suffice to 

 5           say I agree with you.  

 6                  We've seen some of the issues with 

 7           respect to childcare.  Just to, you know, 

 8           repeat the -- we're going to use some of our 

 9           Excelsior Tax Credits to ensure that we can 

10           support businesses as they build, you know, 

11           childcare facilities or support programs.  

12           This is also an area where there's other 

13           agencies and other programs that are working 

14           on this.  

15                  And then last year this was -- last 

16           year or two years ago -- Kevin will remind 

17           me, we'll share it -- childcare was an 

18           important focus of the REDCs.  So, Kevin, 

19           perhaps you can add some more flavor to that.  

20           Thank you.  

21                  ESD COO YOUNIS:  Yeah, thanks, Eric.  

22                  Thanks, Assemblywoman.

23                  To Eric's point, the proposal this 

24           year is to include Excelsior credits, make 


                                                                   175

 1           credits available for childcare provisions.  

 2           So, you know, currently the Excelsior program 

 3           does jobs, investment.  It would also 

 4           include -- I may have the numbers backwards, 

 5           a 5 percent refundable tax credit on capital 

 6           investments related to childcare and then 

 7           6 percent related to operating costs for 

 8           childcare.  And maybe I got the 6 and the 5 

 9           backwards, but -- so yeah, we're doing that.

10                  And I think clearly the regional 

11           councils always talk about childcare.  It's 

12           something that they've been focused on for 

13           years, a number of projects have been 

14           advanced through that process.  And I would 

15           expect, you know, given all the things we've 

16           heard over the last year, to see that to be a 

17           pretty strong priority in the regional 

18           councils this year.

19                  ASSEMBLYWOMAN LUNSFORD:  Thank you.  

20           And can you also speak to the sustainability 

21           and environmental justice component of CFAs, 

22           whether that's being considered?  

23                  ESD COO YOUNIS:  Eric, I can jump in a 

24           little bit on that one if you want.


                                                                   176

 1                  ACTING COMMISSIONER GERTLER:  Sure.

 2                  ESD COO YOUNIS:  Our focus -- so 

 3           there's two things that I think we've been 

 4           very involved in.  You know, the ongoing 

 5           CLCPA, bringing that up online.  But ESD, 

 6           last year we advanced what we call the Green 

 7           Tax Credit, so essentially a much more 

 8           generous tax credit.  It's kind of like 

 9           Excelsior, again, but much more generous, 

10           associated with green investments.  

11                  And then, as you know, there's a lot 

12           of these facilities, electricity generation 

13           facilities that have closed down, and the 

14           impact on the communities.  We had a fund 

15           we've been administering for a number of 

16           years, and that has I think significant new 

17           funding added this year to continue helping 

18           communities transition to, you know, green 

19           energy production, and maybe they lost a 

20           facility that was a strong economic 

21           development provider in their region.

22                  ACTING COMMISSIONER GERTLER:  Great.  

23           Thank you, Kevin.

24                  CHAIRWOMAN WEINSTEIN:  Is Assemblyman 


                                                                   177

 1           Durso still here?  I know he had to go to a 

 2           committee meeting.  I think I skipped him by 

 3           error.

 4                  ASSEMBLYMAN DURSO:  I'm still here.

 5                  CHAIRWOMAN WEINSTEIN:  Actually, as 

 6           ranker you get five minutes.  But you don't 

 7           have to use it all.

 8                  (Laughter.)

 9                  ASSEMBLYMAN DURSO:  Thank you, 

10           Chairperson.  

11                  And I'm sorry, Commissioner, they gave 

12           me five full minutes, but I'll try and make 

13           it as quick as possible.

14                  ACTING COMMISSIONER GERTLER:  Thank 

15           you.

16                  ASSEMBLYMAN DURSO:  So really just 

17           more a couple of comments.  I'll just roll 

18           through in regards to a couple of issues 

19           everybody else spoke about, one being 

20           broadband.  Obviously I think it's a very 

21           important initiative.  Even here on Long 

22           Island we still have areas that don't receive 

23           it properly.  They may actually count as 

24           saying that they receive broadband access, 


                                                                   178

 1           but it -- whether it's through satellite or 

 2           means that -- they don't have a proper 

 3           connection.  So obviously when you're doing 

 4           work like that where you need broadband 

 5           access for it, and then not having the proper 

 6           connections, it makes it a little harder on 

 7           them.  

 8                  And also in certain areas that don't 

 9           have access to more than one company.  We 

10           have two major carriers here on the island 

11           for broadband, and some areas, even 

12           specifically talking about Babylon or even 

13           Brookhaven areas, only have access to one 

14           company.  So therefore the competition level 

15           as far as -- pricing goes through the roof 

16           for them.  So I think obviously pushing to 

17           get access to both companies in those areas 

18           would be helpful, not only for businesses but 

19           for students that would be home or people 

20           that are working from home going forward.

21                  Also speaking about other things that 

22           everybody else had touched on, obviously 

23           Ms. Lunsford was just talking about 

24           childcare, facilitated childcare.  Here on 


                                                                   179

 1           Long Island we want to be included in that, 

 2           obviously, any monies that go forward.  I 

 3           believe Assemblywoman Kimberly Jean-Pierre 

 4           had sent a letter to the Governor asking for 

 5           funding for those childcare initiatives here 

 6           on Long Island.

 7                  Obviously small businesses here need 

 8           help.  You know, here in Massapequa Park, 

 9           where I'm from, we were actually stuck in the 

10           Yellow Zone for a number of months, and a lot 

11           of our small businesses suffered.  So 

12           obviously anything we could do going forward 

13           to help them I think would be huge.

14                  Going through a couple of issues, 

15           tourism here on Long Island -- I know that 

16           there was a small cut.  Well, any cut's not 

17           good, but I hate to say small, but looking 

18           around 1.36 million for the local tourism 

19           matching grants.  You know, obviously, again, 

20           talking about small businesses here on 

21           Long Island, whether it's hotels, motels, 

22           some of our businesses out east and local 

23           businesses, we count on, believe it or not, a 

24           lot on tourism here on Long Island, whether 


                                                                   180

 1           it's in the Oyster Bay area where we're going 

 2           to visit Teddy Roosevelt's home, or on to 

 3           Fire Island or -- I mean, on Long Island we 

 4           have a lot to offer.  

 5                  So being able to have those tourism 

 6           matching funds going forward I think will be 

 7           helpful to the small businesses and the 

 8           tourism businesses in general here on the 

 9           island.

10                  I know I'm just throwing a lot at you, 

11           Commissioner.  I'm sorry, I just want to make 

12           sure I get it all in.

13                  ACTING COMMISSIONER GERTLER:  

14           Understood.

15                  ASSEMBLYMAN DURSO:  Obviously -- and 

16           then just speaking about it, and I know it's 

17           kind of an all-encompassing thing, but you 

18           spoke about the Governor's workforce 

19           initiative.  Obviously going forward here on 

20           Long Island, New York State, New York City, 

21           obviously infrastructure, having skilled 

22           labor is helpful.  And that goes along with 

23           everything, whether it's we need broadband 

24           access for students and businesses, whether 


                                                                   181

 1           we need -- you know, and that obviously 

 2           includes internet and computers and these 

 3           small businesses and having these skilled 

 4           laborers going forward.  

 5                  Some of the cuts to some of our BOCES 

 6           programs here in New York State, the 

 7           consolidation of the funds, I think is only 

 8           going to hurt students and people going 

 9           forward, learning those skilled labors -- 

10           skilled trades, excuse me.  And trades 

11           doesn't mean, anymore, so much as someone 

12           like myself who went to carpentry school and 

13           learned to bang a hammer and nails -- now it 

14           goes into computer technology.  You know, as 

15           we were speaking about before, whether it's 

16           robotics, whether -- all the way down to some 

17           of our small businesses with -- like my 

18           daughter wants to be a baker.  

19                  So having those minority and 

20           women-owned businesses opening up in the 

21           future, we need to train them going forward, 

22           and what better way to do it early in their 

23           careers than in high school, and showing them 

24           that there is other programs available to 


                                                                   182

 1           them going forward.  It's not just about -- 

 2           you know, I wasn't going to school to be a 

 3           doctor.  It wasn't happening for me.  But I 

 4           would like some of our students going forward 

 5           to have those options and realize that those 

 6           options are available to them, but putting 

 7           the onus on the school districts and making 

 8           them make up that difference in funding going 

 9           forward is only going to hurt our students 

10           and give them less access to these programs.

11                  So I think to build that government -- 

12           the workforce initiative, we could start in 

13           those programs in the schools and go from 

14           there.  Thank you.

15                  ACTING COMMISSIONER GERTLER:  Thank 

16           you.

17                  CHAIRWOMAN WEINSTEIN:  Thank you.  

18                  So we're going to go to Assemblyman 

19           Santabarbara.

20                  ASSEMBLYMAN SANTABARBARA:  Okay, I 

21           think I'm on.  Can you guys hear me?

22                  CHAIRWOMAN WEINSTEIN:  Yes, we can.  

23           You're okay, Angelo.

24                  ASSEMBLYMAN SANTABARBARA:  Great.  


                                                                   183

 1           Thank you to both chairs.  And thank you, 

 2           Commissioner, for your testimony and 

 3           responding to all these questions today.  

 4                  I know there's been -- I've been -- 

 5           I've had my hand up for quite some time, but 

 6           people ahead of me have also talked about the 

 7           broadband issue, and I wanted to bring that 

 8           up again.  I know my colleagues Carrie 

 9           Woerner and Billy Jones and a number of other 

10           members have brought up the issue of 

11           broadband.  

12                  You know, I have to also respectfully 

13           disagree with the 98 percent number.  We 

14           spoke to the Broadband Office about the way 

15           this is calculated.  And I don't know if it's 

16           a mapping issue or if it's just other 

17           calculation, but I can tell you in my 

18           district -- I represent Montgomery County, 

19           Albany County, Berne and Knox, those -- I 

20           just got a letter from the supervisor talking 

21           about the lack of broadband there and why so 

22           much money was invested in New NY Broadband 

23           and they're still waiting for service.  

24                  But in addition to that, there are 


                                                                   184

 1           pockets in these rural communities that are 

 2           still, you know, not able to do online 

 3           learning, businesses that weren't able to 

 4           make the transition during this time to 

 5           online, sell their products online and 

 6           they've had to close their doors because of 

 7           that.

 8                  So it's a real issue.  I'd like to -- 

 9           going forward, I'd like you to explore 

10           options of funding another round of broadband 

11           that could address these rural communities.  

12                  So my first question is the broadband 

13           mapping I think is key -- and I understand 

14           that's going to be in the budget.  Do we have 

15           your support to keep that in the budget?  

16           Because if it doesn't end up in there, we're 

17           going to be back to square one.

18                  And I know I only have three minutes, 

19           so I'm going to move on to a couple of other 

20           topics.  

21                  In 2019, the Upstate Cellular Gap 

22           Coverage Task Force was formed by the 

23           Governor.  There was a lot of gaps in 

24           cellphone coverage in these rural 


                                                                   185

 1           communities, a lot of them in upstate 

 2           New York.  There was an effort to identify 

 3           how we're going to address those gaps.  Very 

 4           key to economic development as well, being 

 5           able to have -- almost everybody uses 

 6           cellphones at this point, and these gaps in 

 7           service really cause a lot of problems.  Do 

 8           you have any plans to continue that or push 

 9           for that in this year's budget as well?  

10                  And then overall rural resources in 

11           general.  You know, our rural communities 

12           have provided us quite a bit, an adequate 

13           food supply, energy.  They also are going to 

14           be key to rebuilding our economy.  I'd like 

15           to know what your efforts are to support 

16           these rural communities when it comes to 

17           farming, food, energy, water, recreation.  

18           These are all key components that have made 

19           our state thrive in the past.  They will be 

20           very important to our success in rebuilding 

21           our economy.  I'd like to know what your 

22           efforts are to support them as far as 

23           economic development.

24                  CHAIRWOMAN WEINSTEIN:  In eight 


                                                                   186

 1           seconds.

 2                  ACTING COMMISSIONER GERTLER:  You 

 3           know, thank you for those important 

 4           questions.  I think in the interests of time, 

 5           it's probably best that we follow up with 

 6           you.

 7                  But in terms of your reference to the 

 8           broadband numbers, I mean, you know, we have 

 9           everything validated by third-party 

10           providers.  We're happy to go through it with 

11           you.  They validate our 98 percent success to 

12           date.  And our 99.9 percent commitment on 

13           that program is a product of the work that 

14           the group has done over the last five years.  

15                  But again, given the interests of 

16           time, happy to come back and talk to you 

17           about it, sir.

18                  ASSEMBLYMAN SANTABARBARA:  Thank you.  

19                  CHAIRWOMAN WEINSTEIN:  We go to 

20           Assemblyman Braunstein.  

21                  Is Ed here?

22                  THE MODERATOR:  I'm trying to connect.  

23           It looks like he is.  

24                  ASSEMBLYMAN BRAUNSTEIN:  Can you hear 


                                                                   187

 1           me now?

 2                  THE MODERATOR:  Yes.

 3                  CHAIRWOMAN WEINSTEIN:  Yes, we can.

 4                  ASSEMBLYMAN BRAUNSTEIN:  Okay.  My 

 5           question is we're currently operating under 

 6           an eviction moratorium in this state.  Do we 

 7           have plans for how we're going to address the 

 8           fallout when that eviction moratorium expires 

 9           and businesses are asked to pay back rent?  

10           Is there a plan in place for that?  

11                  ACTING COMMISSIONER GERTLER:  So, you 

12           know, yes, there's the commercial eviction 

13           moratorium that's in place right now.  

14           Let's -- you know, and that has been done, 

15           you know, given all the challenges that 

16           businesses have been under and to enable 

17           businesses to at least as they're trying to 

18           build back their businesses, to at least know 

19           that they can do so from the locations that 

20           they're in.

21                  You know, we at ESD have done a number 

22           of different things to support the -- you 

23           know, to support that.  You know, we know, 

24           with our lease assistance program, it's 


                                                                   188

 1           enabled small businesses to work with their 

 2           landlords to figure out a mutual resolution, 

 3           you know, to that.  

 4                  We understand that when -- you know, 

 5           there's a balance and there's larger 

 6           implications to the economy when, you know, 

 7           somewhere along that chain someone's not 

 8           getting paid, there's an effect on that.  And 

 9           so we've used our resources to help figure 

10           out how to reach amicable resolutions in 

11           those situations.

12                  We've also used our New York Forward 

13           Loan Fund to be able to help small businesses 

14           and help small landlords getting through 

15           this.  

16                  But, you know, you raise, you know, a 

17           very good question.  I think ultimately 

18           federal assistance will be -- you know, will 

19           be critical.  And, you know, some of the 

20           complexities of dealing with those issues are 

21           certainly outside the scope of what ESD does, 

22           so I think those other agencies will help to 

23           look at that issue.

24                  But, you know, no doubt COVID has 


                                                                   189

 1           created many new challenges that we will need 

 2           to face as an economy, and that will be -- 

 3           that certainly will be one of the challenges 

 4           that we'll have to address in a post-COVID 

 5           world.

 6                  ASSEMBLYMAN BRAUNSTEIN:  Okay.  Yeah, 

 7           I just wanted to bring it up because I think 

 8           it's going to be a problem sooner rather than 

 9           later.  

10                  And we need to engage the federal 

11           government about stimulus funding, and we 

12           need to be ready to have a plan in place for 

13           when that moratorium expires that we can 

14           provide support for those businesses so 

15           they're not just immediately evicted for 

16           months of back rent.  So my time is up; thank 

17           you very much.

18                  ACTING COMMISSIONER GERTLER:  Thank 

19           you.  

20                  CHAIRWOMAN WEINSTEIN:  Thank you.  

21                  Commissioner, I have a question on 

22           behalf of our Higher Education chair.  

23           Deborah Glick had to leave for a committee 

24           meeting.  


                                                                   190

 1                  So in terms of the Regional Economic 

 2           Development Councils, if we're correct that 

 3           there were nine rounds totaling just under 

 4           $7 billion, 6.9 billion, how much of that, if 

 5           you know, has gone to institutions of 

 6           learning, higher education institutions in 

 7           our state?  

 8                  ACTING COMMISSIONER GERTLER:  So I'm 

 9           not sure.  But I can give you the -- you 

10           know, we can come back and provide the 

11           information, you know, for that.  I mean, $7 

12           billion have gone through the REDCs.  We're 

13           taking about 8,000 programs, a net return of 

14           $18 billion.  So clearly highly successful.  

15                  But I'd have to go back with -- you 

16           know, given the specifics of 8,000 programs 

17           -- I know many supported academic 

18           initiatives.  But, you know, instead of 

19           spending the time now, let us go back and 

20           provide some of that.

21                  CHAIRWOMAN WEINSTEIN:  Sure.

22                  ACTING COMMISSIONER GERTLER:  You 

23           know, 8,000 programs is a lot.

24                  CHAIRWOMAN WEINSTEIN:  Sure.  Sure.  


                                                                   191

 1           No, I -- that's fine.  I would have been 

 2           surprised if you actually knew the number.

 3                  And when you share that, we'll share 

 4           with the committee members in the Senate.

 5                  So now I'm going to -- that was it for 

 6           me.  You've had a lot of questions.  

 7                  We're going to go to Assemblyman 

 8           Bronson for his second round, and we'll see 

 9           if any of the other chairs need a second 

10           round after Assemblyman Bronson.

11                  ASSEMBLYMAN BRONSON:  Thank you, 

12           Madam Chair.  And Commissioner --

13                  CHAIRWOMAN WEINSTEIN:  Excuse me, 

14           Harry, just one second.  For five minutes on 

15           the clock for the Assemblyman.

16                  ASSEMBLYMAN BRONSON:  Great.  Thank 

17           you, Madam Chair.  

18                  And, Commissioner, thank you for 

19           sticking with us for all morning and into the 

20           afternoon.  We do appreciate it.

21                  You know, a number of colleagues have 

22           talked about the small businesses, and in 

23           particular our -- as we often refer to as our 

24           Main Street {inaudible} and stores.  And 


                                                                   192

 1           these -- one of my colleagues just brought up 

 2           rents.  

 3                  And first of all, have you seen any 

 4           analysis or has your department looked at, 

 5           you know, what commercial rents are in 

 6           arrears at this point?  

 7                  And then second of all, I'm very 

 8           concerned that the proposal doesn't really 

 9           seem to address that.  We have a moratorium.  

10           You know, you've mentioned a couple of times 

11           about the 50 million recovery program.  But 

12           those are tax credits.  Those will kick in 

13           next year when they're filing their taxes.  

14           It's not going to help them survive over the 

15           next two, three, six months to a year.  

16                  And then I'm also concerned that the 

17           New York Forward Loans Fund, a $100 million 

18           program and only 40 million of it is out the 

19           door.

20                  So my question is this.  What plans 

21           can we come up with -- I know it's somewhat 

22           dependent on federal stimulus dollars, but we 

23           have got to get rent relief to commercial 

24           businesses.  And the programs that are out 


                                                                   193

 1           there, the various recovery loans, the 

 2           recurring loans that were in the programs in 

 3           the past, the tax credits that are being 

 4           suggested, that's not going to help these 

 5           small businesses survive.  What can we look 

 6           for in the future from your department on how 

 7           we're going to address these arrears?

 8                  ACTING COMMISSIONER GERTLER:  You 

 9           know, I'm also going to turn to Pravina 

10           Raghavan, who runs our Small Business.  And, 

11           you know, thank you for that question.  It is 

12           undoubtedly a very, you know, important 

13           question and important area that we need to 

14           stay attuned to.  

15                  You know, on a high level, you know, 

16           we've discussed the Lease Assistance 

17           Partnership Program, the New York Forward 

18           Loan Fund.  We've also talked about -- we 

19           also did a Raise the Bar Recovery Fund for 

20           restaurants.  We have the recovery funds for 

21           restaurants and small businesses.  You know, 

22           we have a whole host of programs.  

23                  Pravina, maybe you want to also talk 

24           about the way our programs complement, you 


                                                                   194

 1           know, some of the questions that are being 

 2           asked.

 3                  ASSEMBLYMAN BRONSON:  Well, if I may 

 4           just interrupt, though.  I mean, those funds 

 5           relate to tax credits.  They are not going to 

 6           be the relief that our small businesses need 

 7           now.

 8                  And then I'm also concerned that the 

 9           New York Forward Loan Fund, less than 

10           50 percent of it has been released.  So where 

11           do we stand on getting the other $60 million 

12           out?  Not that I think loans are going to be 

13           the way to address this, because I think we 

14           really have to have grants out there for the 

15           relief.

16                  So the tax credits thing, with all due 

17           respect, I just don't think that's going to 

18           help our businesses survive over the next 

19           months.

20                  ACTING COMMISSIONER GERTLER:  No, I 

21           hear you.  Look, in the case of restaurants 

22           those tax credits are fast-tracked, so it -- 

23           you know, it helps get money out the door.  

24           The Raising the New York State Bar, that was 


                                                                   195

 1           $3 million that -- that, you know, went 

 2           pretty quickly.  So those are examples of the 

 3           way we're getting money out the door.

 4                  On the New York Loan Fund, you know, 

 5           again, this was created at a time when 

 6           business couldn't access a lot of the PPP 

 7           monies.  What we've done is we've continued 

 8           to expand eligibility, you know, for that.  

 9           It used to be if you had PPP funds, you 

10           couldn't access it; now you can.  It used to 

11           be, you know, a smaller limitation on 

12           employees; we've expanded that as well.

13                  So, you know, I hear you.  We are 

14           looking at different ways that we can get 

15           capital into these -- you know, into these 

16           small businesses.  The lease assistance 

17           program, you know, it helps.  So it's not 

18           just one program, it's a multifaceted 

19           approach with both loans, with technical 

20           assistance, with partnerships, with tax 

21           credits.  

22                  So, you know, this is an economic 

23           crisis that's been unprecedented.  So we're, 

24           you know, using as many of the different 


                                                                   196

 1           tools that we have to try and address this 

 2           situation.

 3                  ASSEMBLYMAN BRONSON:  All right.  I 

 4           appreciate that, Commissioner.  I think we 

 5           need to throw in the mix grant funds 

 6           available for our small mom-and-pop stores.  

 7                  Thank you.

 8                  ACTING COMMISSIONER GERTLER:  Thank 

 9           you.

10                  CHAIRWOMAN WEINSTEIN:  Thank you.  So 

11           that is -- there are no more questions from 

12           the Assembly, so I'm going to throw it back 

13           to Senator Krueger.  I'm not sure if there's 

14           any Senate questions left.

15                  CHAIRWOMAN KRUEGER:  Thank you.  I see 

16           no hands.  I'm not even giving people a 

17           chance to raise their hand.

18                  (Laughter.)

19                  CHAIRWOMAN KRUEGER:  I want to thank 

20           our guest from ESDC -- ESD -- you have too 

21           many names.  You have ESD, you have ESDC, you 

22           have Urban -- whatever.  Thank you for being 

23           with us today.  

24                  I think you have a number of homework 


                                                                   197

 1           assignments from a number of us.  So if you 

 2           can just get those back to both Helene and I, 

 3           we will make sure to put them up for everyone 

 4           to take a look at and to learn more even 

 5           after this hearing is over for you.  

 6                  With that, I am going to call up our 

 7           next testifier, RoAnn Destito, commissioner, 

 8           New York State Office of General Services.  

 9           And I see her with us already.

10                  Good afternoon -- no longer good 

11           morning, RoAnn.  Good afternoon -- 

12                  ACTING COMMISSIONER GERTLER:  Thank 

13           you, Chairwoman Krueger, thank you, 

14           Chairwoman Weinstein.  Thank you so much.

15                  CHAIRWOMAN KRUEGER:  Thank you.

16                  So you have 10 minutes on the clock.

17                  COMMISSIONER DESTITO:  Thank you.  

18                  Good afternoon, Chairs Krueger and 

19           Weinstein, Ranking Members O'Mara and Ra, and 

20           distinguished members of the committees.  I 

21           am pleased to be here today to provide 

22           testimony about the Office of General 

23           Services.  

24                  As all of us know, the past year has 


                                                                   198

 1           been challenging for all residents of 

 2           New York State as well as the world.  

 3           COVID-19 has changed the way we live, work, 

 4           and interact with one another.  At OGS, the 

 5           pandemic has presented unprecedented demands 

 6           on our services and our time.  

 7                  I would like to offer you some details 

 8           on the efforts that OGS employed to support 

 9           the state's ongoing response to the pandemic.  

10           Competing in a global market where essential 

11           supplies suddenly became scarce, OGS was able 

12           to focus the full weight of our expertise to 

13           get New York State to the front of the line.  

14                  OGS facilitated the sourcing, 

15           ordering, tracking, delivery coordination, 

16           and reconciliation of more than 200 million 

17           items of durable medical equipment and PPE. 

18           We partnered in multi-agency efforts to 

19           contract for products and services for test 

20           sites, alternative care facilities, agency 

21           PPE, and vaccines, while supporting local 

22           government sourcing through statewide 

23           contracts.  

24                  OGS was also responsible for the 


                                                                   199

 1           financial processing required to secure the 

 2           state's PPE and hospital build-out inventory.  

 3           We worked with DOCCS to support the New York 

 4           State Clean hand sanitizer program.  OGS 

 5           managed warehouse operations for storage, 

 6           distribution, inventory, and delivery of New 

 7           York State Clean hand sanitizer, PPE, and 

 8           other supplies.  

 9                  We accepted the responsibility for 

10           three alternative care facilities from the 

11           Army Corps of Engineers and FEMA, and they 

12           continue to be operationally maintained by 

13           OGS.  

14                  We also provided real estate services 

15           to establish laboratory, warehouse, call 

16           center, and COVID-19 testing and vaccination 

17           sites. OGS also delivered mailing and 

18           printing support for the Department of Labor 

19           and the Office of Temporary Disability 

20           Assistance, provided contracting support for 

21           Javits Center operations, as well as 

22           broadcast support for daily COVID briefings.  

23                  We were also responsible for the 

24           development and maintenance of New York 


                                                                   200

 1           Forward and COVID-19 websites, in conjunction 

 2           with ITS.  We created return-to-work plans 

 3           for state office buildings to ensure 

 4           employees were aware of and following the 

 5           COVID protocols, and we established enhanced 

 6           cleaning procedures and air filtration.  My 

 7           agency's staff also participated in many 

 8           COVID-related volunteer efforts and continue 

 9           to do so.  

10                  As New York implemented its phased 

11           reopening and employees began returning to 

12           work at OGS owned and managed buildings, 

13           including the Legislative Office Building, 

14           our facilities team increased the frequency 

15           of cleaning and disinfection of high-density 

16           and high-touch areas.  We installed signage 

17           reminding people of COVID protocols.  

18                  In addition to our COVID-related 

19           activities, OGS continues delivering the 

20           services and support our customers depend on 

21           us to provide.  OGS provides enterprise-wide 

22           operational services and programs that allow 

23           other state agencies, local governments, 

24           not-for-profits, businesses and citizens to 


                                                                   201

 1           focus on and fulfill their own diverse 

 2           missions.  

 3                  We maintain and manage 20 million 

 4           square feet of state-owned space and leases 

 5           of 11.8 million square feet of office, 

 6           warehouse, and other required space 

 7           throughout the state.  OGS provides 

 8           architectural, engineering, contracting, and 

 9           construction management services to over 

10           50 state agency clients.  Additionally, OGS 

11           provides vital emergency response and 

12           recovery support following floods, fires, 

13           weather disasters, and more, and we do this 

14           24/7, 365 days a year.  

15                  We manage a portfolio of approximately 

16           1,500 centralized contracts for commodities, 

17           services, and technology, and that represents 

18           over 1.6 billion in spend for state agencies 

19           alone.  

20                  We also provide transactional 

21           back-office administration services for 

22           nearly all the executive agencies for finance 

23           and human resources and administer the 

24           Service-Disabled Veteran-Owned Business 


                                                                   202

 1           program.  

 2                  In addition, OGS delivers support 

 3           services for agencies, including fleet 

 4           management, printing and mail services, food 

 5           distribution, warehousing, and surplus 

 6           property disposition.  We aggregate and 

 7           manage the purchase of energy resources and 

 8           insurance.  We also administer the visitor 

 9           experience at the Capitol and Empire State 

10           Plaza, and we issue easements and grant 

11           licenses and permits for the use of uplands 

12           and lands under water.  

13                  Our Procurement Services group 

14           continues to lead the way in new and 

15           innovative procurements.  We maintain the 

16           largest information technology catalog of 

17           contracts in the country.    

18                  OGS trains government employees on 

19           contracts and businesses on how to do 

20           business with the state.  We maintain an 

21           electronic catalog of over 10 million items 

22           available for purchase, and facilitate the 

23           employment of individuals with disabilities.  

24                  OGS is responsible for the 


                                                                   203

 1           administration and daily operations of 

 2           176 state-owned buildings and structures.  

 3           Since the beginning of this administration, 

 4           the agency has performed more than 

 5           1200 capital projects and over 

 6           3200 preventive-maintenance and 

 7           rehabilitation/improvement projects.  

 8                  Continuing our pledge from previous 

 9           years to meet the Governor's clean energy 

10           goals, NYPA and OGS have begun projects to 

11           replace old and obsolete equipment at the 

12           Sheridan Hollow steam plant and the 

13           Empire State Plaza chill plant.  We are also 

14           in the process of establishing a 38-megawatt 

15           solar photovoltaic project at the former 

16           Oriskany Airport, which the state now owns.  

17           This project would generate over 50 percent 

18           of the electricity used at the Empire State 

19           Plaza.  

20                  In conjunction with other agency 

21           partners, OGS continues the Employee Zero 

22           Emissions Vehicle Charging Pilot Program in 

23           targeted OGS parking facilities throughout 

24           downtown Albany and the Harriman campus.  


                                                                   204

 1                  In addition to managing space, we also 

 2           build it and conduct project permitting with 

 3           the OGS Design and Construction team, which 

 4           serves state agencies including DOCCS, OMH, 

 5           State Police, DMNA, and Ag and Markets.  

 6           Design and Construction typically responds to 

 7           300 vital agency construction emergency 

 8           declarations each year.  

 9                  OGS is also participating in the 

10           Governor's REDI program on Lake Ontario.  In 

11           addition to serving on the REDI committee and 

12           advancing multiple projects for the 

13           initiative, OGS is directly managing the 

14           $15 million navigation dredging initiative at 

15           up to 20 channels and harbors.  

16                  Also we do an excellent job growing 

17           businesses.  We are very proud to say that we 

18           have exceeded the Governor's MWBE utilization 

19           goal of 30 percent.  Since 2011, MWBEs have 

20           received in excess of $842 million from 

21           contracts associated with our Design and 

22           Construction group alone.  

23                  Our success in implementing the 

24           Service-Disabled Veteran-Owned Business Act 


                                                                   205

 1           continues.  We now have approximately 

 2           855 certified businesses in a wide range of 

 3           categories, from construction and financial 

 4           services to commodities.  

 5                  Providing an exceptional visitor 

 6           experience is a source of pride for the OGS 

 7           team.  Since 2011, OGS has managed nearly 

 8           10,000 events, and more than half a million 

 9           people have taken tours of the Capitol, the 

10           Executive Mansion, and visited the Corning 

11           Tower Observation Deck.  

12                  Efforts to prevent the spread of COVID 

13           required us to pivot to a successful Virtual 

14           Visit online series, and we provided tours of 

15           the majestic halls of our Capitol and both 

16           the Empire State Plaza and Harlem Art 

17           Collections.  Instead of our usual Martin 

18           Luther King, Jr. Day observance at the Empire 

19           State Plaza, we honored Dr. King with a 

20           one-hour pre-produced broadcast that for the 

21           first time aired on PBS stations statewide.  

22                  We also reopened the plaza's Visitor 

23           Center, and we began selling New York Tough 

24           face masks to help stop the spread.  


                                                                   206

 1                  As commissioner, I am honored to lead 

 2           the hardworking and dedicated team at the 

 3           Office of General Services.  Their service to 

 4           the people of New York State never wavers and 

 5           can be counted on at all times.  

 6                  Thank you for listening to my 

 7           testimony, and I am happy to take all of your 

 8           questions.

 9                  CHAIRWOMAN KRUEGER:  Thank you very 

10           much.

11                  And Assembly, I do not think the 

12           Senate has any questions, so I'm going to 

13           pass it over to you.

14                  CHAIRWOMAN WEINSTEIN:  Okay.  So let's 

15           go first to Assemblyman Zebrowski.

16                  ASSEMBLYMAN ZEBROWSKI:  Thanks, Chair 

17           Weinstein.  

18                  And good afternoon, Commissioner.  

19           Great to see you.

20                  I only have three minutes, so I'm just 

21           going to jump into one area that falls under 

22           my purview of the Governmental Operations 

23           Committee.  

24                  The Public Protection and General 


                                                                   207

 1           Government Budget, Part BB, the New York 

 2           Medical Supply Act, three questions with 

 3           that.  Is this intended to supercede any of 

 4           our current programs -- Preferred Source, 

 5           MWBE, Service Disabled Veterans, or anything 

 6           with corrections industries?

 7                  COMMISSIONER DESTITO:  We will 

 8           continue, Assemblyman -- and it's good to see 

 9           you too.  We will continue to work at 

10           providing the Preferred Source as well as all 

11           of our MWBE and SDVOB.  We are in process of 

12           putting many of the new state-supported 

13           vendors on contract.  We would like to do 

14           business in the State of New York and make 

15           sure that this does not supercede the 

16           Preferred Source Program or any other program 

17           that we have in place.

18                  ASSEMBLYMAN ZEBROWSKI:  Thanks.

19                  So purchases under this program, if it 

20           becomes law, will they be noted or 

21           highlighted within the current sort of 

22           procurement disclosures that are done?

23                  COMMISSIONER DESTITO:  The Medical 

24           Supply Act is a partnership with ESD, and we 


                                                                   208

 1           will be working with them.  They incentivize 

 2           a number of businesses in New York State, and 

 3           we will be working with them to put them on 

 4           our state contracts so that whenever our 

 5           centralized contracts are used by state 

 6           agencies or any of our authorized users, 

 7           those products will be there for people to 

 8           purchase from New York State-incentivized 

 9           companies.

10                  ASSEMBLYMAN ZEBROWSKI:  Okay.  And --

11                  COMMISSIONER DESTITO:  And it will -- 

12           again, Assemblyman, it will be in concert 

13           with the preferred sources and all of our 

14           MWBE and SDVOB.

15                  ASSEMBLYMAN ZEBROWSKI:  Right.  Okay.

16                  And so lastly, what is the process?  

17           There's a process within the language that 

18           allows an agency if it's not in the -- I 

19           think it's the best interest of the public 

20           or, you know, some standard like that, that 

21           they don't have to follow that Medical Supply 

22           Act.

23                  COMMISSIONER DESTITO:  Its form, 

24           function and utility determines whether a 


                                                                   209

 1           Preferred Source partner can meet their 

 2           requirements.

 3                  ASSEMBLYMAN ZEBROWSKI:  And with the 

 4           New York -- with the New York Medical Supply, 

 5           with that sort of purchasing, there's like a 

 6           section in that that says an agency head -- 

 7           you know, if it's not in the best interests 

 8           -- there's some broad language there, and I 

 9           was trying to get a sense of like what would 

10           be the process for that?  Do you envision --

11                  COMMISSIONER DESTITO:  It would be an 

12           internal process, and it would be documented 

13           as to how they made that decision.

14                  ASSEMBLYMAN ZEBROWSKI:  Okay, so you 

15           do envision some sort of documented -- like 

16           something filed with it.

17                  COMMISSIONER DESTITO:  Yes.  Yes.

18                  ASSEMBLYMAN ZEBROWSKI:  Okay.

19                  COMMISSIONER DESTITO:  Yes, 

20           absolutely.

21                  ASSEMBLYMAN ZEBROWSKI:  My time's 

22           expired.  Thanks, Commissioner.

23                  COMMISSIONER DESTITO:  Thank you, 

24           Assemblyman.


                                                                   210

 1                  CHAIRWOMAN WEINSTEIN:  So we go to -- 

 2           Assemblyman Byrne has a question.

 3                  ASSEMBLYMAN BYRNE:  Yes.  

 4                  Thank you, Commissioner.  And my 

 5           question is a bit similar to my colleague, so 

 6           this may be a short question, about the 

 7           Medical Supplies Act.  And it seems pretty 

 8           clear in the language in the budget that 

 9           there is some flexibility if a state agency 

10           is unable to get the supply needed from 

11           within the United States, that there is -- 

12           for the department head or agency head to 

13           pass a waiver.

14                  And I think the intent behind this is 

15           very good, but I just want to get that on the 

16           record and confirm.  Because obviously I 

17           think some of the reason we're doing this is 

18           because of the supply chain issue, we want to 

19           incentivize more products that are made here 

20           in the United States and in New York State.  

21           But should there be a massive need that goes 

22           beyond the available supply, we should be 

23           able to have everything available to us.

24                  And there is a -- you know, I know 


                                                                   211

 1           some concerns have been expressed to me about 

 2           the "in whole or in part" portions.  If 

 3           certain medical supplies are in part made by, 

 4           you know, entities outside of the country or 

 5           outside of the state, will they be able to 

 6           have that waiver as well?

 7                  COMMISSIONER DESTITO:  We -- 

 8           flexibility without limiting the ability to 

 9           respond.  We will -- the whole idea in 

10           working with ESD on this issue is that we 

11           will be incentivizing more people in New York 

12           State, more vendors in New York State, to be 

13           able to provide these products and 

14           manufacture these products in New York State.

15                  But that will not limit our ability to 

16           go out and get what we need, as we did during 

17           the COVID pandemic.

18                  ASSEMBLYMAN BYRNE:  Perfect.  That's 

19           my -- that was my understanding.  I just 

20           wanted to make sure that was clear.

21                  COMMISSIONER DESTITO:  Yes.

22                  ASSEMBLYMAN BYRNE:  Thank you.

23                  COMMISSIONER DESTITO:  Yes, 

24           absolutely.


                                                                   212

 1                  CHAIRWOMAN KRUEGER:  All right.  Do we 

 2           see any other hands up, Helene?

 3                  CHAIRWOMAN WEINSTEIN:  No, we do not 

 4           have anyone else.

 5                  CHAIRWOMAN KRUEGER:  Okay, thank you.

 6                  Well, then, Commissioner, thank you so 

 7           much for being with us.  Don't take it 

 8           personally; you're not nearly as 

 9           controversial as the prior commissioner.  You 

10           just run an agency that seems to do its job, 

11           so we appreciate that very much.  And we'll 

12           check in with you sometime soon.

13                  COMMISSIONER DESTITO:  You sure can.  

14           Thank you very much for having me.  I 

15           appreciate it.

16                  CHAIRWOMAN KRUEGER:  Thank you, we 

17           appreciate it.

18                  CHAIRWOMAN WEINSTEIN:  Nice and clear.

19                  COMMISSIONER DESTITO:  Yup.  Bye-bye.

20                  CHAIRWOMAN KRUEGER:  Our next speaker 

21           is the New York State Council on the Arts, 

22           Mara Manus, executive director.

23                  And I think I see her in a box.

24                  EXECUTIVE DIRECTOR MANUS:  I'm here.


                                                                   213

 1                  CHAIRWOMAN KRUEGER:  And you are 

 2           welcome to start, you have 10 minutes.

 3                  EXECUTIVE DIRECTOR MANUS:  Thank you 

 4           so much.

 5                  Chairs Krueger and Weinstein and 

 6           members of the committee, thank you for the 

 7           invitation to address you today.  I am Mara 

 8           Manus, the executive director of NYSCA. 

 9                  On behalf of our chair, Katherine 

10           Nicholls, our board members, our staff, and 

11           our field, we are deeply grateful for the 

12           Governor and Legislature's continued support 

13           and recognition of NYSCA's critical role in 

14           our state's vital arts sector.  

15                  In a year of unprecedented devastation 

16           to our sector, our grantees' unyielding 

17           dedication to their work ensures the survival 

18           of the arts as we confront the dual pandemics 

19           of COVID-19 and systemic racism together.  

20                  Pre-COVID, the state's arts sector 

21           constituted 7.5 percent of our economy and 

22           generated $120 billion, employing over 

23           460,000 workers.  The arts are a significant 

24           driver of tourism, as we all know, and 


                                                                   214

 1           pre-COVID our grantees reported 150 million 

 2           visitors.  Every dollar that supports the 

 3           arts is a critical investment in the health 

 4           of our economy and a significant driver of 

 5           our state's recovery.  

 6                  NYSCA is immensely grateful to the 

 7           Governor for his decision to preserve our 

 8           FY '21 grant-making budget at level funding.  

 9                  As an agency, we have pivoted over the 

10           last year to meet the increasingly dire needs 

11           of our grantees, and I will provide further 

12           details shortly.  

13                  NYSCA's core focus is grant making to 

14           nonprofit organizations and artists.  For 

15           FY 2021, we prioritized flexible general 

16           operating expenses as well as support for 

17           small and medium-sized organizations and 

18           underrepresented communities.  We moved 

19           quickly to bring all of our FY '21 grant 

20           recommendations to a NYSCA council meeting in 

21           February.  The applicants received 

22           notification letters on February 12th.  

23                  In this round, NYSCA awarded 

24           1900 grants totaling $40 million to 


                                                                   215

 1           1200 organizations and 150 artists.  Of that 

 2           amount, $28 million went to organizations 

 3           with budgets less than $3 million.  

 4                  Our FY '21 application deadline was 

 5           4 p.m. on March 12th, which was the same week 

 6           that everything shut down.  We immediately 

 7           gathered responses from our grantees through 

 8           a survey and were able to develop and execute 

 9           FY '20 contract flexibilities, including 

10           extensions and modifications.  To date, we 

11           have approved over 200 of those requests and 

12           are allowing those same modifications for our 

13           FY '21 contracts. 

14                  So those FY 2020 contracts started on 

15           January 1st, FYI.  

16                  In April, NYSCA received NEA CARES 

17           funding, and we executed two funding 

18           opportunities in under three months, 

19           providing $10,000 grants to 49 organizations 

20           and $1,000 grants to 40 non-New York City- 

21           based artists through our partnership with 

22           NYFA.  

23                  NYSCA held all of our review panels 

24           virtually in August and September, and the 


                                                                   216

 1           panelists were charged with evaluating the 

 2           applicant's ability to deliver on their 

 3           mission.  

 4                  NYSCA also led three reorgs of our 

 5           website, the first to identify timely 

 6           emergency resources, the second to create a 

 7           space for Arts Online, and the third to 

 8           showcase grantee reopenings and resources.  

 9           We also created the NYSCA PRESENTS webinar 

10           series in May, and we've held six webinars, 

11           reaching over 3500 people, and covering such 

12           topics as "Fundraising in the Time of COVID" 

13           and "Moving Your Mission Online." 

14                  As of February 2021, the total 

15           financial impact of COVID on the New York 

16           State arts sector is estimated as a loss of 

17           more than $338 million.  Additionally, the 

18           estimated loss in attendance totals 

19           13 million people, and employee reductions 

20           total 47,000 full-time arts workers.  This 

21           does not include contract workers, which we 

22           all know are the bedrock of the arts 

23           workforce.  

24                  The state's reopening guidelines for 


                                                                   217

 1           low-risk arts were released on June 23rd, and 

 2           some museums began reopening over the summer.  

 3           However, many are operating at a much lower 

 4           capacity than the 25 percent requirements set 

 5           by the state.  We recognize that a majority 

 6           of the arts sector is still shut down and 

 7           that the performing arts are contending with 

 8           a minimum of 18 months of revenue loss.  

 9                  While a hybrid model of 

10           virtual/in-person programming may be viable 

11           in the future, there is no current data to 

12           suggest that digital programming is creating 

13           significant revenue to contend with 

14           COVID-related losses.  

15                  Here are a few examples of grantees 

16           that have pivoted to embrace the challenges 

17           of the last year.

18                  MOCA -- also called the Museum of 

19           Chinese in the Americas -- in Manhattan was 

20           severely damaged in a devastating fire in 

21           January.  When faced with both COVID and the 

22           fire recovery, MOCA launched a new virtual 

23           exhibition, Trial by Fire, and also a 

24           crowd-sourced social-media storytelling 


                                                                   218

 1           project.  To date, MOCA's digital programming 

 2           has been viewed by over 65,000 people.  

 3                  Ballet Hispanico is the nation's 

 4           renowned Latinx dance organization, and in 

 5           2020 they launched the wildly successful 

 6           BUnidos virtual program, featuring virtual 

 7           dance classes and watch parties with company 

 8           members.  These have been viewed by over 

 9           160,000 people to date.  

10                  Moving to the western part of our 

11           state, ArtPark Niagara is a 150-acre park and 

12           cultural institution, and that was one of the 

13           first to reopen.  They held 80 socially 

14           distanced events, including an artist-led 

15           tour and a parking-lot mural project.  It's 

16           worth noting that they are reporting an 

17           80 percent loss in revenue due to the 

18           cancellation of their regular large-scale 

19           events.  

20                  Many grantees reimagined their mission 

21           through non-arts support as well, such as 

22           Jack Arts in Brooklyn, which provided 

23           120 individuals and families with food 

24           assistance weekly, and DreamYard in the 


                                                                   219

 1           Bronx, which served over 100,000 free meals, 

 2           bagged groceries, and produce.  

 3                  I'm pleased to share updates on our 

 4           vital cross-sector partnerships, which I have 

 5           mentioned in previous testimonies.  We 

 6           relaunched our Creative Aging Initiative in 

 7           partnership with NYSOFA on February 22nd, 

 8           after being delayed due to COVID.  The 

 9           programming will now be offered virtually, 

10           enabling a much broader reach across the 

11           state.  

12                  Our partnership with DOCCS, called 

13           CreativityWorksNYS, continues to support 

14           creative programming for justice-involved 

15           youth through hands-on art making.  So this 

16           was initially launched in the Hudson and 

17           Adirondack facilities.  Those have been 

18           converted back to adult facilities, and we 

19           are relaunching the program at Brookwood and 

20           Columbia, which are sites that are now under 

21           the purview of OCFS.

22                  Arts programming will also continue at 

23           the Ulster adult facility, and we are in 

24           talks with DOCCS about expanding arts 


                                                                   220

 1           programming to other facilities.  

 2                  Our joint arts calendar in partnership 

 3           with I Love NY, which has reached 

 4           300,000 visitors with a single submission, 

 5           was modified this year to include digital 

 6           events as well.  

 7                  Thank you again for the opportunity to 

 8           share the impact and the reach of the arts in 

 9           New York State, and NYSCA's role in 

10           supporting the transformative work of our 

11           grantees.   We are so privileged to represent 

12           the tens of thousands of New York artists and 

13           cultural workers from the nonprofit sector.  

14           The investment we make in the arts delivers 

15           an incredible return as a driver of the 

16           health of our workforce, our economy, and our 

17           people -- all while maintaining our state's 

18           position as a global leader in arts and 

19           culture, attracting millions each year from 

20           around the world.  

21                  Arts funding is so vital to our 

22           recovery, and the arts remain determined to 

23           reimagine, rebuild, and renew New York.  

24                  I now welcome your questions.


                                                                   221

 1                  CHAIRWOMAN WEINSTEIN:  I think we're 

 2           going to go to Assemblyman Carroll for three 

 3           minutes.

 4                  CHAIRWOMAN KRUEGER:  Yes, thank you.

 5                  ASSEMBLYMAN CARROLL:  Thank you, Chair 

 6           Weinstein.  

 7                  And thank you, Executive Director 

 8           Manus, for speaking to us in that 

 9           presentation.

10                  I wonder if you have any information 

11           on those art organizations, especially small 

12           and medium-sized, that applied for grants 

13           last year prior to COVID and whether those 

14           organizations still are functioning and 

15           operational today.

16                  EXECUTIVE DIRECTOR MANUS:  So the 

17           small and medium-sized organizations that we 

18           have provided grants to are -- two points to 

19           mention here.  One is that if they have 

20           closed down, they're required to let us know.  

21           We've had very, very few notifications of 

22           permanent closures so far.  I think obviously 

23           the story is still unraveling.

24                  The -- however, we have granted to 


                                                                   222

 1           every organization the ability to extend and 

 2           modify their grants, and we have -- and those 

 3           modification requests are continuing to come 

 4           in.  And so -- and those encompass anything 

 5           from moving your programming online to 

 6           extending the deadline, obviously, of work 

 7           that was going to be presented in person.  

 8           But so far we don't have any data on 

 9           complete, permanent closures.

10                  ASSEMBLYMAN CARROLL:  Two quick 

11           follow-ups.  Does NYSCA -- has it or does it 

12           have any opinions on converting former office 

13           space in Manhattan or other areas that may be 

14           now unused or underutilized, to convert that 

15           to studio space, performance space?

16                  And in addition to that, has NYSCA 

17           been able to help arts organizations work 

18           through insurance claims?  Many arts 

19           organizations have called my office talking 

20           about being rejected for business 

21           interruption insurance or other insurance 

22           that they have had, they have paid premiums 

23           for years and years and years.  And of course 

24           if they were able to get those claims paid 


                                                                   223

 1           out, it would make it much easier for them to 

 2           begin operations again when it is safe.

 3                  EXECUTIVE DIRECTOR MANUS:  So one of 

 4           the wonderful benefits of being a NYSCA 

 5           grantee is that we offer technical assistance 

 6           actually through NYCON, the New York Council 

 7           of Nonprofits, and so that technical 

 8           assistance is available to any one of our 

 9           grantees, whether you get general operating 

10           support or project support.  

11                  And they are helping -- they're able 

12           to provide assistance and guidance to anyone 

13           facing this kind of situation, any entity.  

14           And they're also providing a lot of guidance 

15           around, for instance, the PPP application.  

16                  And in terms of your question about 

17           storefront spaces, so there are a couple of 

18           our grantees that are actually -- one of them 

19           is called ChaShaMa, and they actually do 

20           activate storefront spaces for artists work, 

21           both exhibition and work.  We of course are 

22           in support of any kind of construct that's 

23           going to support the return of the arts in a 

24           healthy way to the state after this 


                                                                   224

 1           devastating year.  And I think we have to 

 2           acknowledge that the devastation of this year 

 3           is still not over.

 4                  ASSEMBLYMAN CARROLL:  Thank you.

 5                  CHAIRWOMAN WEINSTEIN:  Thank you, 

 6           Assemblyman.

 7                  We're going to send it back to the 

 8           Senate now.

 9                  CHAIRWOMAN KRUEGER:  Okay, thank you 

10           very much.  

11                  Thank you, Executive Director.

12                  So when I reviewed the Governor's 

13           proposal and there were a number of new I 

14           guess grant programs for the arts, or at 

15           least one particularly, but it was for fairly 

16           large companies, of spending at least a 

17           million dollars for production.

18                  Now, I'm from New York City so when I 

19           see those kinds of numbers, I say, oh, 

20           they're going to underwrite Broadway shows at 

21           the major Broadway theaters and at the major 

22           musical, you know, sites we have -- Lincoln 

23           Center, Carnegie Hall.

24                  And yet the groups that we don't know 


                                                                   225

 1           whether they will survive and be able to come 

 2           back are the smaller groups.  And certainly 

 3           the history of the arts in New York City has 

 4           been smaller community-based groups, 

 5           off-off-Broadway, The Public Theater -- you 

 6           know, all these different venues.  But it 

 7           didn't appear that we were offering them 

 8           anything.

 9                  When I raised it with the ESDC 

10           commissioner -- not at the hearing this 

11           morning but at a previous conversation the 

12           other day -- he said, Well, that program is 

13           set up so that if money is repaid or they hit 

14           a certain mark, then that money will go to 

15           you for further distribution to smaller 

16           groups.

17                  So can you help me understand that?  

18           Because I was a little confused.

19                  EXECUTIVE DIRECTOR MANUS:  So I think 

20           that Eric and I are in discussion about how 

21           we can further collaborate.  And there hasn't 

22           been a long history of that I think 

23           historically, but we are looking forward to 

24           working together this year most specifically.


                                                                   226

 1                  I don't have the detail on the program 

 2           you're talking about, but I'm happy to revert 

 3           after -- when I get more information.

 4                  I will say that to your point, there 

 5           are 300, we know that there are 300 small 

 6           nonprofit theaters in New York City, for 

 7           instance, and that they -- and the small 

 8           organizations are really the bedrock of our 

 9           sector.

10                  And NYSCA does everything we can to 

11           support those, including the kind of pivots 

12           we made this year with our funding -- 

13           specifically, how 28 million of our 

14           40-plus-million went to organizations with 

15           budgets of less than $3 million.  And many of 

16           those are much, much, much smaller; you know, 

17           budgets of half a million dollars.

18                  CHAIRWOMAN KRUEGER:  But is it a 

19           surprise to you when I say he said that some 

20           of this money actually is supposed to head to 

21           you and your universe of groups when the 

22           companies, I guess, that are larger are more 

23           successful with their productions because of 

24           the money they got from the state?


                                                                   227

 1                  It almost sounds like it's a -- you 

 2           know, where we become shareholding producers 

 3           of those shows and the ones that do well, we 

 4           get money back, except it goes to you.  Which 

 5           I'm not opposed to at all, but I didn't see 

 6           that language anywhere in the budget.  So I 

 7           want to just double-check that I was not 

 8           mishearing him.

 9                  EXECUTIVE DIRECTOR MANUS:  Yes, I 

10           haven't been a part of that conversation, but 

11           I'm looking forward to that.

12                  CHAIRWOMAN KRUEGER:  Please.  And 

13           please let me know what you learn, because I 

14           would hate to think that -- I'm not saying he 

15           would intentionally mislead me, but I would 

16           hate to imagine that I heard it wrong, 

17           because that's what I heard.

18                  EXECUTIVE DIRECTOR MANUS:  Sure, we'll 

19           get back to you in revert.  Thank you.

20                  CHAIRWOMAN KRUEGER:  Okay, thank you.

21                  Any other questions, Helene, from the 

22           Assembly?

23                  CHAIRWOMAN WEINSTEIN:  Yes, we do, we 

24           have our chair of Science and Technology.  


                                                                   228

 1                  So Assemblyman Otis for five minutes.  

 2           Or actually he could have 10 minutes if he 

 3           needs it, because he's the chair.

 4                  CHAIRWOMAN KRUEGER:  Don't give him 

 5           five minutes --

 6                  CHAIRWOMAN WEINSTEIN:  He'll only use 

 7           five.  He's very concise.

 8                  ASSEMBLYMAN OTIS:  I'll be less than 

 9           five.

10                  But thank you for all the good work at 

11           the Council of the Arts.  

12                  And, you know, you've heard from some 

13           of the other questions, we're very concerned 

14           about the small arts organizations that may 

15           or may not survive.

16                  Just curious, what did we do last year 

17           with the decentralization grants?  Did they 

18           not go out the door or -- what money flowed 

19           and didn't flow last year?

20                  EXECUTIVE DIRECTOR MANUS:  So last 

21           year you mean beginning January 1st of the 

22           last year?

23                  ASSEMBLYMAN OTIS:  Or ending April 1st 

24           to the current year.


                                                                   229

 1                  EXECUTIVE DIRECTOR MANUS:  Yeah.  So 

 2           all of our DEC sites have been receiving 

 3           funding.  As you know, the budgets were on 

 4           pause this year, and so we were able to 

 5           distribute all of those grants and 

 6           notifications by February, and those 

 7           contracts are dated January 1st.  

 8                  So there has been -- there's no break 

 9           in commitment from NYSCA to our DEC sites.

10                  ASSEMBLYMAN OTIS:  So the money's 

11           still going to be spent, is what you're 

12           saying, even though we had a pause period.

13                  EXECUTIVE DIRECTOR MANUS:  Absolutely.

14                  ASSEMBLYMAN OTIS:  Okay.  So I would 

15           just say in terms of how you're figuring out 

16           your priorities in the upcoming year, I would 

17           just ask attention be given to these small 

18           arts organizations that are again on the 

19           ledge whether they're going to survive or 

20           not, and it may be some state help will allow 

21           them to do it.

22                  They may need emergency help, not for 

23           performance, but to pay some rent or some 

24           survival costs.  And so if you could look at 


                                                                   230

 1           your criteria and maybe look at possible 

 2           adjustments to deal with the unusual 

 3           situations we're in so we don't lose those 

 4           entities, what they offer and the jobs that 

 5           they offer.  

 6                  And I'm going to yield back my three 

 7           minutes left, and -- but thank you.  You're a 

 8           very important agency, not just for the 

 9           culture of the state but for the economy of 

10           the state.

11                  EXECUTIVE DIRECTOR MANUS:  Thank you 

12           so much.

13                  I just want to add that we will be -- 

14           we are rethinking in probably the most major 

15           way our opportunities for FY '22.  They will 

16           be posted in late spring.  And we are taking 

17           all of these points, including yours, into 

18           consideration in developing those new 

19           guidelines.

20                  ASSEMBLYMAN OTIS:  Great.  Thank you 

21           very much.

22                  CHAIRWOMAN KRUEGER:  Thank you very 

23           much.

24                  Helene, you have more?


                                                                   231

 1                  CHAIRWOMAN WEINSTEIN:  Yes, I believe 

 2           Assemblyman O'Donnell was going to be logging 

 3           in, but I had a question before we check on 

 4           that.

 5                  I was just wondering, in terms of the 

 6           Arts and Cultural Facilities Improvement 

 7           Program, the status of the program.  And has 

 8           prior funding improved the renovation, 

 9           construction, energy efficiency or 

10           technology?  And do you believe that a 

11           competitive process is the most effective way 

12           to ensure funding is optimally regionally 

13           distributed?

14                  EXECUTIVE DIRECTOR MANUS:  So just to 

15           clarify, are you speaking about the capital 

16           support that we got in 2018-2019?

17                  CHAIRWOMAN WEINSTEIN:  Yes.

18                  EXECUTIVE DIRECTOR MANUS:  Great.  

19                  Okay, so we did receive a total of 

20           $30 million, as you well know, and that was 

21           allocated and distributed to 88 projects.  

22           about half of those projects have been 

23           completed or are near completion at this 

24           point, and we expect the rest to be completed 


                                                                   232

 1           in the next two years.

 2                  In terms of -- you know, we do -- we 

 3           have been hearing from the field that 

 4           probably, you know, one of the priority 

 5           capital needs will be the air filtration 

 6           systems and an upgrade of their HVAC due to 

 7           the new requirements and the need for more 

 8           safe reopenings.

 9                  CHAIRWOMAN WEINSTEIN:  Okay, thank you 

10           very much.

11                  If we could just pause for a moment, I 

12           was told that Assemblyman O'Donnell was here, 

13           so he may just be having some problem logging 

14           on.  Let me just --

15                  THE MODERATOR:  He is currently 

16           entering the room.

17                  CHAIRWOMAN WEINSTEIN:  Okay, so 

18           let's --

19                  CHAIRWOMAN KRUEGER:  Aha, he's 

20           spotted.

21                  CHAIRWOMAN WEINSTEIN:  Okay, is he 

22           here?

23                  CHAIRWOMAN KRUEGER:  Yes.

24                  CHAIRWOMAN WEINSTEIN:  Oh, there, I 


                                                                   233

 1           see him.  Okay.  Perfect timing, Danny.

 2                  Why don't you put five minutes on the 

 3           clock for Assemblyman O'Donnell, since he's 

 4           the chair of the committee.

 5                  Danny, go ahead, we're up to you. 

 6                  ASSEMBLYMAN O'DONNELL:  Thank you very 

 7           much, Ms. Manus, for being here.  I apologize 

 8           for being late.  I wasn't invited to this 

 9           hearing, and therefore I was never sent a 

10           link.

11                  But now that I'm here, I'd like to 

12           talk to you a little bit about the importance 

13           of the economic impact of the arts.  In all 

14           my 20 years I've been here, I've been told 

15           it's a multiplier and that if you spend a 

16           dollar in state spending, the tax revenue the 

17           state receives is seven times that amount of 

18           money.

19                  Can you elaborate a little bit on 

20           that?

21                  EXECUTIVE DIRECTOR MANUS:  Yes.  In 

22           fact I have what I hope is somewhat of an 

23           illicit -- enlightening example.  

24                  So first of all, we don't have 


                                                                   234

 1           complete statewide data on the economic 

 2           impact, other than the high-level data.  But 

 3           we know that the regions are producing their 

 4           own reports.  And I just wanted to read from 

 5           a report that was developed a few years ago 

 6           in Mid-Hudson.

 7                  Just a quick -- it's home to 

 8           500 organizations, generates 468 million in 

 9           total economic impact.  This was around 2015.  

10           It created 5,000 jobs.  The region reports 

11           3.6 million cultural visitors, adding almost 

12           500 million to the area's economy, spending 

13           40 million on lodging, 160 million on food 

14           and beverage, 134 million on retail, and 

15           119 million on transportation.

16                  Some of NYSCA's grantees in the region 

17           include the Hudson Valley Shakespeare 

18           Festival, Storm King, and the Boys and Girls 

19           Club of Newburgh.  

20                  That's an example.

21                  EXECUTIVE DIRECTOR MANUS:  Thank you.

22                  Which brings me to the problem that 

23           we're in, which is that there are a great 

24           many needs in this pandemic, and the reality 


                                                                   235

 1           is if we don't fix the arts funding problem, 

 2           we won't be able to have the resources going 

 3           forward to fix the other problems.

 4                  On a given night, I think there are 

 5           over 10,000 seats in Lincoln Center, and if 

 6           the productions are successful, that's 10,000 

 7           human beings coming into the West side of 

 8           Manhattan.  They're buying coffee, they're 

 9           eating dinner, they're having drinks, they're 

10           doing all those things.  And some of them, in 

11           fact, because of the international importance 

12           of the Metropolitan Opera, are staying in 

13           hotels.  And those are the big organizations.

14                  But the small organizations do the 

15           same thing.  In Glens Falls, New York, my 

16           sister and brother-in-law saved Glens Falls 

17           by putting a theater in an old Woolworth's in 

18           downtown Glens Falls.  It was a sleepy, dead 

19           town that is now thriving with restaurants 

20           and bars and everything, all because the 

21           Woolworth's was converted into a theater.

22                  And so in the past your budget has 

23           been minuscule, and the attention to the arts 

24           has been neglected because people don't think 


                                                                   236

 1           of it as being important.  And so we have a 

 2           maintenance-style budget.  

 3                  We don't need to maintain the arts, we 

 4           have to rebuild them.  And if we don't 

 5           rebuild them, the economy of the State of 

 6           New York will not rebuild either.  Can you 

 7           comment on that?

 8                  EXECUTIVE DIRECTOR MANUS:  The arts 

 9           are critical to recovery.  I mean, we -- I 

10           shared numbers at the top of my presentation 

11           about just the -- how much they actually 

12           exceed, the economy of the arts exceeds the 

13           retail, construction and transportation 

14           sectors.  And the employment of workers, you 

15           know, cannot be understated.  You know, 

16           almost 500,000, and that doesn't include the 

17           contract workers, which we all know are just 

18           in the tens of thousands or perhaps hundreds, 

19           who knows.  We don't really know.

20                  But I agree.  I mean, what we have 

21           from all of our grantees is a profound sense 

22           of the extent to which they hold up their 

23           local economies.  And while it's very clear 

24           in a place like New York City, and the, you 


                                                                   237

 1           know, great numbers of global tourists it 

 2           attracts, what you said about Glens Falls 

 3           holds true in almost every small town and 

 4           village that we -- where there's an 

 5           organization that we support.

 6                  I mean, if you look at, for instance, 

 7           Saranac Lake, Pendragon Theater, it's been 

 8           there for 40 years.  It's about a 150-seat 

 9           theater.  They're now going to be the 

10           cornerstone of the DRI project in Saranac 

11           Lake.  And they are taking over a former 

12           grocery store, an abandoned grocery store 

13           space. 

14                  And if you go up to the North Country 

15           and visit any -- visit the Lake Placid- 

16           Saranac Lake area, what you see is a high 

17           concentration of artists as well as arts 

18           organizations, and you also see a thriving 

19           economy.  And in a place that perhaps one 

20           wouldn't expect it.

21                  And what is clear across all the 

22           cities that were born by the birth of the 

23           Erie Canal, whether it's in Syracuse or 

24           Rochester or Buffalo, is while there are no 


                                                                   238

 1           longer perhaps the corporations that there 

 2           once was, the arts are still a tent pole of 

 3           the economy in those places and I believe are 

 4           really contributing to securing the 

 5           populations that are there and are 

 6           attracting -- and serve also as places to 

 7           attract, you know, new residents.

 8                  And it's heartening to see that, but 

 9           it's also, as you said, attention must be 

10           paid -- not to quote Arthur Miller -- to what 

11           is such a critical part of our sector.  And 

12           it's going to be such a giant part of its 

13           recovery.  But we -- without attention, we 

14           are all concerned.

15                  ASSEMBLYMAN O'DONNELL:  My last 

16           question.  Ms. Fahy's not present, so in her 

17           absence --

18                  CHAIRWOMAN WEINSTEIN:  Actually, she 

19           is.

20                  ASSEMBLYMAN O'DONNELL:  -- I'm going 

21           to ask the question on her behalf.

22                  CHAIRWOMAN WEINSTEIN:  Excuse me --

23                  ASSEMBLYMAN O'DONNELL:  She has 

24           proposed a WPA-like project for the arts.  


                                                                   239

 1           You and I have talked about workforce 

 2           development.  What do you have to say about 

 3           how do we get the people who have been 

 4           unemployed for the last year back to work?

 5                  CHAIRWOMAN WEINSTEIN:  Assemblyman, 

 6           Pat Fahy is here.  She has her hand up, so 

 7           she'll be asking her question.  But --

 8                  ASSEMBLYMAN O'DONNELL:  Okay, could 

 9           you please answer the question about 

10           workforce development, please, Ms. Manus?

11                  CHAIRWOMAN WEINSTEIN:  The director 

12           could answer the question, that's fine.

13                  ASSEMBLYMAN O'DONNELL:  Thank you.

14                  EXECUTIVE DIRECTOR MANUS:  Okay.  So 

15           the question about workforce development and 

16           its critical --

17                  ASSEMBLYMAN O'DONNELL:  Yes.

18                  EXECUTIVE DIRECTOR MANUS:  Okay, 

19           great.  So workforce development.  So I think 

20           the headlines for the arts sector this year 

21           are income loss by individuals and revenue 

22           loss by organizations.  And in terms of 

23           workforce, that is where if we don't get our 

24           people back into the jobs, whether they're 


                                                                   240

 1           full-time or contract jobs, we're not going 

 2           to get the organizations open.

 3                  And let's face it, we all recognize 

 4           that there's a longer runway than just 

 5           getting a vaccine at this point, in terms of 

 6           building the arts and getting the 

 7           organizations to be at the state that they 

 8           were pre-COVID.

 9                  So in terms of the workforce, we have 

10           prioritized workforce development in our REDC 

11           programs and as I said -- I don't know if you 

12           heard, but we are going to be completely 

13           overhauling our 2022 opportunities, and the 

14           goals of those are to be streamlined, create 

15           greater access, and be responsive to a field 

16           that we know has been devastated.

17                  Workforce is going to be, I believe, 

18           the priority.  And it's hard to say that 

19           we're going to be responsive without 

20           attending to workforce investment.

21                  CHAIRWOMAN WEINSTEIN:  Thank you.

22                  Senate, do you have anybody?  Because 

23           we still have --

24                  CHAIRWOMAN KRUEGER:  Nope.  Nope.  We 


                                                                   241

 1           are giving it to you, the Assembly.

 2                  CHAIRWOMAN WEINSTEIN:  Okay.  I know 

 3           we have Pat Fahy, but Assemblywoman Giglio I 

 4           know had -- was trying to raise her hand.  I 

 5           don't know if she's available.

 6                  ASSEMBLYWOMAN GIGLIO:  Yes, I am 

 7           available.  And trying to -- yeah, there you 

 8           are.  Having some technical glitches here.

 9                  But I just have a few questions, and 

10           one of them is about the funding for New York 

11           State Council of the Arts.  

12                  You know, the art councils in downtown 

13           Riverhead and in the historic districts in my 

14           district are struggling.  And they are agents 

15           of the community, and they bring many people 

16           to Main Streets with the various events that 

17           they have.  And the cuts for the funding for 

18           the New York State Council of Arts has really 

19           put a damper on the Main Street functions 

20           that they normally do -- not during COVID, 

21           but for this year.

22                  So I have a question about that, about 

23           the New York State Council of Arts and why 

24           that funding was not restored and what we are 


                                                                   242

 1           doing to get it.

 2                  EXECUTIVE DIRECTOR MANUS:  Could -- 

 3           could you -- I'm not aware of the funding 

 4           that you're speaking of.  Do you have any 

 5           detail on that?

 6                  ASSEMBLYWOMAN GIGLIO:  Yes.  I heard 

 7           it from the East End Arts Association in 

 8           downtown Riverhead.  It's New York State 

 9           Council of the Arts funding.

10                  EXECUTIVE DIRECTOR MANUS:  Yup.  So -- 

11           so our funding is a competitive process, and 

12           my understanding is that they -- their score 

13           didn't warrant funding this year.

14                  ASSEMBLYWOMAN GIGLIO:  Okay, so that's 

15           just out and they're not going to get it.

16                  And then there was also the question 

17           about hotel tax and if that could be 

18           appropriated to any of the arts and tourism.

19                  EXECUTIVE DIRECTOR MANUS:  We would 

20           welcome that.  I know that that's in place in 

21           New Jersey, and perhaps other states.  And 

22           obviously any further dollars to support the 

23           arts in this incredibly critical time is -- 

24           would be -- I think we would rejoice.


                                                                   243

 1                  ASSEMBLYWOMAN GIGLIO:  Yeah.  So has 

 2           there been any requests for some of that 

 3           hotel tax?  Seeing as the chair of my 

 4           Committee on Tourism just brought that up, 

 5           saying that the hotels fill up when there are 

 6           art events that are happening on the 

 7           Main Streets.  So I'm just wondering how we 

 8           could go about that, pursuing getting some of 

 9           that hotel tax.

10                  EXECUTIVE DIRECTOR MANUS:  I'm happy 

11           to engage in any conversation that anyone 

12           wants to have.  I haven't been privy to any 

13           to date.

14                  ASSEMBLYWOMAN GIGLIO:  Okay.  So I 

15           will call you after this, then.

16                  EXECUTIVE DIRECTOR MANUS:  Thank you.

17                  ASSEMBLYWOMAN GIGLIO:  And I'm also 

18           curious as to whether or not there's any 

19           money for maintenance of trails within the 

20           parks.  We have a state-funded recreation 

21           trail that's a 10-mile contiguous trail in 

22           the former Grumman facility, and I'm just 

23           wondering if there is any funding for the 

24           maintenance of those trails.


                                                                   244

 1                  EXECUTIVE DIRECTOR MANUS:  There 

 2           wouldn't be funding from us, but I believe 

 3           that's a great question for Parks.

 4                  ASSEMBLYWOMAN GIGLIO:  Okay.  So it 

 5           had to do with tourism, because we get people 

 6           from all over New York State and from all 

 7           over the United States, actually, that come 

 8           and stay in the hotels and ride this trail.

 9                  So you're saying that the funding 

10           should come from Parks and that tourism 

11           wouldn't entertain it.

12                  EXECUTIVE DIRECTOR MANUS:  Right, we 

13           don't have any -- the only time we've had 

14           real capital funding is those two years that 

15           I mentioned, '18 and '19.  

16                  We do have an ongoing small facilities 

17           capital program, it's $50,000 or lower -- or 

18           less, grants that we do offer every year.  

19           But that really is -- it's really focused on 

20           buildings.

21                  ASSEMBLYWOMAN GIGLIO:  Yeah, the 

22           capital projects, not for maintenance.

23                  EXECUTIVE DIRECTOR MANUS:  Right.  

24           Right.


                                                                   245

 1                  ASSEMBLYWOMAN GIGLIO:  Okay.  And then 

 2           the historic barns --

 3                  CHAIRWOMAN KRUEGER:  -- I'm sorry.

 4                  ASSEMBLYWOMAN GIGLIO:  I'm out of 

 5           time?

 6                  (Overtalk.)

 7                  EXECUTIVE DIRECTOR MANUS:  You can 

 8           always call us.  Please.

 9                  ASSEMBLYWOMAN GIGLIO:  Thank you for 

10           your time.  I will.  Thank you.

11                  EXECUTIVE DIRECTOR MANUS:  Thanks.

12                  CHAIRWOMAN KRUEGER:  Sorry, thank you.

13                  CHAIRWOMAN WEINSTEIN:  And we're going 

14           to go to -- thank you, Senate.

15                  We're going to go to Assemblywoman 

16           Fahy now, three minutes.

17                  ASSEMBLYWOMAN FAHY:  Thank you.

18                  And thank you to our colleague, 

19           Chairman O'Donnell.  I was listening, and I 

20           really appreciated him bringing up my 

21           temporary jobs bill for short-term jobs, like 

22           the -- modeled after the WPA.

23                  I just want to go a little bit 

24           further.  I also -- I also want to echo the 


                                                                   246

 1           concerns of needing -- from the previous 

 2           speaker, the need for capital dollars.  So 

 3           thank you, Director Manus.  We definitely 

 4           need to restore those capital dollars that I 

 5           know were so hard-fought-for by Chairman 

 6           O'Donnell and others a couple of years ago.  

 7           We need to restore that.

 8                  But can I ask you -- the Governor did 

 9           put out a pop-ups initiative.  And I 

10           understand that that's met with some dismay 

11           or disenchantment, if you will, of concerns 

12           that that's really not drilling down and 

13           where some of the highest numbers of 

14           unemployment -- and I've seen numbers as high 

15           as 50 percent of artists and dancers are out 

16           of work.  But then the gig workers in the 

17           artists community, I've again seen numbers as 

18           high as 60 percent.  

19                  How do we get at the gig workers, and 

20           what more than the pop-ups?  Yes, I have the 

21           WPA bill.  Yes, I want to see short-term 

22           jobs.  But what -- what can we do?  And then 

23           also if you could -- so in addition to how we 

24           do this, what can we do about the summer?  I 


                                                                   247

 1           mean, there is a real growing sense of 

 2           desperation out there to --

 3                  EXECUTIVE DIRECTOR MANUS:  What can we 

 4           do by the summer, is that what your question 

 5           is?

 6                  ASSEMBLYWOMAN FAHY:  No, by the 

 7           summer.  Yeah, by -- you know, to get at this 

 8           desperation.  So if not the pop-ups, how do 

 9           we get it down to -- you know, it's not -- 

10           Proctor's, in our area, it's not reemploying 

11           the full-time staff, it's these gig workers 

12           that are, you know, 60 percent unemployed.

13                  EXECUTIVE DIRECTOR MANUS:  Yes, I 

14           think the gig workers are incredibly 

15           important.

16                  And I just want to mention that while 

17           we don't have a lot of detail on it, that the 

18           Mellon Foundation is going to be launching a 

19           project, an initiative, called Creatives 

20           Rebuild New York.  It's going to bring -- 

21           it's going to bring employment to artists and 

22           support for organizations who employ those 

23           artists.  And it's also, I believe, going to 

24           provide other kinds of income support for 


                                                                   248

 1           artists.

 2                  So those details are forthcoming, and 

 3           so stay tuned.  And as soon as we have those, 

 4           we will obviously be sharing those widely.  

 5           That is one thing. 

 6                  You know, we operate on a -- we 

 7           provide grants on an annual cycle, NYSCA, so 

 8           our grants portal usually opens in January.  

 9           It's going to be opening in the spring.  We 

10           make our grants through the year, but the 

11           contracts start the following year.  

12                  And what we are going to do -- which 

13           we haven't finalized, but we're going to be 

14           offering a small recovery fund.  And we 

15           should be announcing that in the next month, 

16           about a million-point-four, and we're going 

17           to probably prioritize small organizations.  

18           But we haven't finalized those guidelines 

19           yet.

20                  And we're going to model it very much 

21           on our NEA CARES opportunity, which we would 

22           have gotten actually out in a couple of 

23           months, and that was just a four-part 

24           questionnaire -- super short, super 


                                                                   249

 1           accessible, prioritized small organizations.

 2                  In terms of the artists, you know, 

 3           NYSCA is not -- I'm going to answer your 

 4           question --

 5                  ASSEMBLYWOMAN FAHY:  I see we're out 

 6           of time.  I will follow up with you to 

 7           really --

 8                  EXECUTIVE DIRECTOR MANUS:  Okay, 

 9           follow up --

10                  ASSEMBLYWOMAN FAHY:  -- gig workers 

11           and short-term jobs for the summer that 

12           address the desperation.  

13                  Thank you so much to the chair.

14                  EXECUTIVE DIRECTOR MANUS:  Thank you.  

15                  And also I did want to just finish my 

16           response to you, which is that NYSCA is not 

17           in a position to be able to provide grants to 

18           individuals, and so we do that through 

19           New York Foundation for the Arts, for 

20           instance, and support 80 to 100 artists a 

21           year through that partnership, for instance.

22                  But let's follow up afterwards.

23                  ASSEMBLYWOMAN FAHY:  Thank you.

24                  EXECUTIVE DIRECTOR MANUS:  Thank you.


                                                                   250

 1                  CHAIRWOMAN KRUEGER:  Okay.

 2                  CHAIRWOMAN WEINSTEIN:  Senate, do you 

 3           have --

 4                  CHAIRWOMAN KRUEGER:  No, the Senate 

 5           would actually like to thank this guest for 

 6           being with us and to say thank you very much 

 7           from all of us, and to move the hearing 

 8           forward.  Is that all right?

 9                  CHAIRWOMAN WEINSTEIN:  Yes, please.

10                  CHAIRWOMAN KRUEGER:  Okay.  So just 

11           for people to understand, it's 1:47.  This 

12           hearing was scheduled to be done 45 minutes 

13           ago, to move on to a second hearing.  

14                  Helene, we may be past the point in 

15           history where we can pull off two hearings in 

16           one day.  We'll have to have a discussion for 

17           next year.  There's so much greater interest 

18           in so many issues.  Which is a very good 

19           thing, it's just a little overwhelming from a 

20           time perspective.  

21                  So our first panel -- and now we move 

22           to the rules where each person gets three 

23           minutes to testify and the questioner also 

24           gets three minutes for the question and the 


                                                                   251

 1           answers from whoever on the panel.  So 

 2           it's -- I like to describe it as it's the 

 3           speed dating part of our public hearings --

 4                  CHAIRWOMAN WEINSTEIN:  Senator 

 5           Krueger?

 6                  CHAIRWOMAN KRUEGER:  Yes.

 7                  CHAIRWOMAN WEINSTEIN:  I just wanted 

 8           to clarify just for some members who may not 

 9           have participated in prior hearings.  It's 

10           three minutes to ask a question of the panel, 

11           not each member of the panel.

12                  CHAIRWOMAN KRUEGER:  That's correct, 

13           Thank you.  Yes, three minutes for the panel 

14           with their answers.  So it's the speed dating 

15           part.

16                  So our first panel:  The League of 

17           Independent Theater, Christina Perry; the 

18           National Association of Theatre Owners of 

19           New York State, NATO -- that's funny, I know 

20           this other group who thinks their name is 

21           NATO.  And that's Joseph Masher, who's the 

22           president.  He's incorrectly identified as 

23           the treasurer on the printed list, but he is 

24           the president.  Theatrical Teamsters Local 


                                                                   252

 1           817, Thomas O'Donnell, president.  And the 

 2           New York State Hospitality and Tourism 

 3           Association, Mark Dorr, president.

 4                  Welcome to you all.  

 5                  I guess we'll go straight down the 

 6           list.  Christina Perry, are you with us? 

 7                  MS. PERRY:  I am.  Hello.  Thank you 

 8           so much for having me and allowing me this 

 9           time.

10                  I'm Christina Perry, and I am with the 

11           League of Independent Theater.  We represent 

12           over 300 theater venues with 99 seats or 

13           less.  And we are also part of the United for 

14           Small Business and the Save Our Store Fronts 

15           Coalition.

16                  In addition, I am also a theater venue 

17           operator, and I help to operate the Chain 

18           Theatre.  We have two spaces in Midtown 

19           Manhattan here.  So I'm representing the 

20           League and also giving a personal account of 

21           the effects of this pandemic as a venue 

22           operator.

23                  Our biggest need right now is rent 

24           relief for commercial tenants.  I'm sure 


                                                                   253

 1           that's a surprise to no one.  It's been 

 2           almost a year since the mandated closure, and 

 3           while we appreciate all the moratoriums that 

 4           have been in place, we feel this is not 

 5           really a solution.  To give an example, the 

 6           not-for-profit I work for is currently 

 7           looking at over $100,000 in back rent, and 

 8           that is just continuing to mount.  And that's 

 9           something that even in the best economy we 

10           just would not be able to make up.

11                  So I can also tell you from personal 

12           experience that rent accounts for 60 percent 

13           of our yearly operating budget, and this 

14           statistic is true for hundreds in my industry 

15           with similar spaces.  Rent is and always has 

16           been our greatest expense.

17                  Prior to the pandemic, we at the 

18           Chain Theatre were always paying in full and 

19           on time.  We were even able to reopen after 

20           the devastating effects of Hurricane Sandy 

21           when there was sewage literally pouring into 

22           our basements.  And we even survived the real 

23           estate boom in Long Island City that led us 

24           to our current space in Midtown.


                                                                   254

 1                  And I share that just kind of as an 

 2           example of our tenacity and, when we're open, 

 3           how we can make it work.  But this is just 

 4           something beyond what any of us have ever 

 5           been able to encounter.  And that's why the 

 6           survival of small businesses like mine is so 

 7           dependent on rent relief.

 8                  We're positive fixtures in your 

 9           community, as so many of you know.  We serve 

10           the local residents on each block where we 

11           live.  We provide positive foot traffic.  We 

12           bring people to the mom-and-pop restaurants, 

13           local hotels, stores, public transportation.  

14           And of course thousands of students apply 

15           each year to the State of New York because 

16           they know what kind of opportunities there 

17           are upon graduation at theaters like mine.  

18           And it's so exciting, and one of our 

19           highlights every year is to work with them.

20                  So also I'm sure -- you may know that 

21           there was a study done in 2019 that tells you 

22           that our industry alone collectively accounts 

23           for $1.3 billion in taxes from these 

24           activities that then go on to support the 


                                                                   255

 1           state.  

 2                  There's been some wonderful proposals 

 3           put in place, such as S3349, a bill led by 

 4           Senator Hoylman and Assemblymember Epstein, 

 5           and we want to thank them, Senator Serrano, 

 6           and Senator Salazar.  We believe this bill is 

 7           a really strong example on how commercial 

 8           rent relief might be implemented, as the 

 9           proposal shares the burden between the 

10           renters and landlords.

11                  I see I'm running out of time, so I 

12           just want to close by saying thank you once 

13           again.  And we really hope that we can find a 

14           way to find rent relief for commercial 

15           tenants such as myself, because our survival 

16           depends on it.  Thank you.

17                  CHAIRWOMAN KRUEGER:  Thank you very 

18           much.

19                  Next, Joseph Masher.

20                  MR. MASHER:  Good afternoon, 

21           everybody, Chairs Krueger and Weinstein.  I 

22           also wanted to thank specifically Senator 

23           Savino and Assemblywoman Fahy for their 

24           unwavering support in this effort.


                                                                   256

 1                  I'm Joe Masher, president of the 

 2           National Association of Theatre Owners of 

 3           New York State.  NATO is the largest 

 4           exhibition trade organization in the world, 

 5           representing over 32,000 movie screens in 

 6           all 50 states and additional cinemas in 

 7           82 countries worldwide.  I'm also the chief 

 8           operating officer of Bow Tie Cinemas.  We 

 9           have two locations in the Capital District, 

10           one in Westchester and one in Manhattan.  

11                  I'm here today to urge your support in 

12           the Governor's budget to allow movie theaters 

13           to apply for a liquor license, using the same 

14           process as a similar business.  Alcohol is 

15           already offered in places such as Chuck E. 

16           Cheese, sporting events and family 

17           restaurants across the state.  Even 

18           Disney World in Florida has a liquor license.

19                  Presently New York does permit limited 

20           alcohol sales in movie theaters, but only in 

21           conjunction with a full restaurant license, 

22           which includes a kitchen and a significant 

23           menu.  Several theaters offer alcohol sales 

24           under this exception.  The other way you can 


                                                                   257

 1           do alcohol in movie theaters right now is to 

 2           license your lobby as a tavern, but then 

 3           people have to slam their drinks in the lobby 

 4           before going into their movie.

 5                  The legal change in this proposal is 

 6           most urgent, given the current state of the 

 7           movie theater industry.  As a result of the 

 8           pandemic, movie theaters were completely shut 

 9           down across the state until this past 

10           October, and in New York City will finally be 

11           allowed to reopen starting on March 5th.  

12           Movie theaters that have reopened are doing 

13           so at a capacity that is safe for consumers 

14           and the industry, I'm proud to say, has had 

15           zero cases of COVID transmission traced to a 

16           movie theater.

17                  Our pass-through limits are 

18           dangerously low for a volume business and 

19           profitability, and in order to pay our rent 

20           we need other sources of revenue.  Many major 

21           theater circuits are facing bankruptcy, and 

22           many independents and small chains have 

23           already been forced to close permanently.  

24           The economic impact is really upsetting to 


                                                                   258

 1           hear, let alone to experience.  

 2                  In New York State our box office 

 3           revenues alone are down 98 percent.  We've 

 4           lost over $105 million in revenue, including 

 5           concessions and screen advertising.  Further, 

 6           10,000 jobs in the state have either been 

 7           lost or still on furlough, including 6,000 in 

 8           New York City alone.  Contrary to popular 

 9           impression, theaters carry many full-time 

10           adult employees on their payroll.  

11                  Widespread closures have devastated an 

12           industry that was already imperiled by 

13           streaming technology prior to the pandemic.  

14           In 2020, some studios began sending their new 

15           movies directly to streaming, skipping the 

16           theatrical window entirely.  That means 

17           zeroing out any revenue these films would 

18           have made for theaters.

19                  But we're determined to bring 

20           audiences back to the big screen.  Theaters 

21           are taking the initiative to create a more 

22           enjoyable movie-going experience that can 

23           compete with streaming in the new normal.  

24           The proposal will create a much-needed income 


                                                                   259

 1           for an industry that just lost an entire year 

 2           of revenue.  And beyond that, we're committed 

 3           to working with Taste NY to bring New York 

 4           State craft beverages into our systems.

 5                  Small theaters will benefit most from 

 6           this proposal because while they're often the  

 7           backbone of downtowns, they're also the least 

 8           able to afford the renovations necessary to 

 9           apply for a restaurant license.  

10                  This provision also builds in adequate 

11           protections and restrictions for movie 

12           theaters to apply for a license, including ID 

13           requirements, one alcoholic beverage per 

14           purchase, purchases limited to one hour 

15           before the first movie showing and cease at 

16           the end of the last movie showing.  Food 

17           typically found in a theater must be kept 

18           readily available.  And any municipality may 

19           object to a license, and the Liquor Authority 

20           may use that as a good cause to deny the 

21           license.

22                  So we're urging your support for this.  

23           Thank you very much.

24                  CHAIRWOMAN KRUEGER:  Thank you.  


                                                                   260

 1                  Our next speaker is Thomas O'Donnell.

 2                  THE MODERATOR:  You need to unmute.

 3                  MR. O'DONNELL:  Thank you, Chairwoman 

 4           Krueger.

 5                  My name is Tom O'Donnell.  I'm 

 6           president of Theatrical Teamsters Local 817.  

 7           I present this testimony on behalf of the 

 8           entire film production labor community.

 9                  Thank you for the opportunity to 

10           provide testimony to describe the 

11           unparalleled success of the Empire State Film 

12           Production Tax Credit, and for your long-term 

13           support of the film and television production 

14           community.  

15                  In the 2021 legislative session, the 

16           union's top priority is ensuring the 

17           continuity and stability of the tax credit.  

18           We thus testify today in support of the 

19           Governor's proposed extension of the program 

20           in the State Budget.

21                  On Friday, the 13th of March, 2020, we 

22           were at record employment and still growing.  

23           I got a phone call that day from the 

24           commissioner of the New York City Office of 


                                                                   261

 1           Media and Entertainment that the city just 

 2           had their first COVID-related death and they 

 3           were shutting everything down.  That day we 

 4           went from 100 percent employment to less than 

 5           1 percent employment for the next five 

 6           months.

 7                  Over those five months, the 

 8           entertainment unions negotiated with the 

 9           studios and producers some of the most 

10           thoughtful and rigorous safety protocols of 

11           any industry in the country -- testing up to 

12           three times a week, the best PPE available, 

13           social distancing.  Today we are returning to 

14           near-pre-pandemic employment levels, keeping 

15           not only our casts and crews safe, but also 

16           the communities and neighborhoods that we 

17           live and work in. 

18                  I just want to emphasize that this is, 

19           first and foremost, a union program.  We 

20           fight to ensure higher wages, the excellent 

21           health and pension benefits, even a 

22           scholarship fund for our dependent children.  

23           Since the inception of the tax credit, 

24           Local 817 has more than tripled its 


                                                                   262

 1           membership and our gross wages and benefit 

 2           contributions have gone from 70 million to 

 3           almost 400 million.  And we're just a very 

 4           small slice of the employment pie.

 5                  Lastly, in last year's State Budget 

 6           the tax credit was reduced from a 30 percent 

 7           to 25 percent rebate.  These reforms no doubt 

 8           will further increase the state's return on 

 9           the tax dollars invested in the program.  

10           However, we are always monitoring the 

11           calibration of the tax credit to maximize its 

12           job-creating impact.

13                  In summation, this extension does not 

14           impact this year's fiscal plan.  It will, 

15           however, give confidence to producers and 

16           employers that New York remains committed to 

17           the film and television production incentive 

18           for the long haul.

19                  I thank you for your time and 

20           consideration, and I look forward to 

21           answering any questions the panel may have.

22                  CHAIRWOMAN KRUEGER:  Thank you very 

23           much.

24                  And our last speaker on the panel, 


                                                                   263

 1           Mark Dorr.

 2                  MR. DORR:  Good afternoon.  Thank you 

 3           for having me.  My name is Mark Dorr, 

 4           president with the New York State Hospitality 

 5           and Tourism Association.  We represent 1,000 

 6           members throughout New York State, including 

 7           hotels, amusement parks, destination 

 8           marketing organizations, those charged with 

 9           marketing and promoting our great state.

10                  So we're currently the third-largest 

11           industry in the state, tourism overall.  We 

12           represent a million jobs, $19 billion in tax 

13           revenue.  And we welcomed in 2019 -- I'll 

14           take 2020 out of the mix -- but we welcomed 

15           250 million visitors, and we hope to get back 

16           somewhere -- and I was just reading this 

17           morning, I think we're going to get back to a 

18           very robust summer travel vacation schedule 

19           here in New York State.

20                  My  main topic this morning is really 

21           to thank the economic development folks for 

22           recognizing the need to provide a mechanism 

23           for collecting of sales tax from the 

24           unregulated short-term rental industry.  In 


                                                                   264

 1           the Executive Budget this year there's a 

 2           portion in there to level the playing field 

 3           that allows for state and local collection of 

 4           sales tax on those short-term rentals.  And 

 5           obviously that's going to immediately boost 

 6           the economy by doing that.

 7                  And, for example, $18 million probably 

 8           in sales tax over the last decade has been 

 9           left on the table.  I'd like to thank 

10           Assemblymember Fahy especially, she's been a 

11           champion of this for us for the last five to 

12           six years.  And this is one part of a 

13           three-part puzzle that we have collecting 

14           that sales tax.  The occupancy tax is another 

15           part of that for later on.  But there's 

16           probably -- we've done a study with our folks 

17           at Smith Travel Research -- probably in 

18           New York State another $90 million in 

19           occupancy taxes are not being collected from 

20           those short-term rental units.

21                  So as we heard earlier from 

22           Assemblyman O'Donnell, there is, you know, a 

23           segment of the industry out there that is not 

24           collecting occupancy tax.  However, they're 


                                                                   265

 1           benefiting from the arts, they're benefiting 

 2           from overnight stays and the marketing and 

 3           promotion of our convention and visitors 

 4           bureaus.  

 5                  So -- but mostly I'd just like to 

 6           thank everybody for the mechanism to collect 

 7           that sales tax.  We hope that makes it all 

 8           the way into the final budget.

 9                  Last couple of things, I Love NY is a 

10           very important part of the tourism industry 

11           and marketing statewide, bringing people in.  

12           Again this year, this summer's probably going 

13           to be more critical than ever to bring people 

14           back to traveling into New York.  They're set 

15           at $2.5 million; we hope to keep that level 

16           there.

17                  And matching grants, which is our 

18           convention and visitors bureaus, our tourism 

19           promotion agencies.  One thing to keep in 

20           mind is in the Governor's budget it was 

21           $2.4 million.  Last year it was 3.8 in a very 

22           tough year.  We hope to get back to 3.8 

23           million.  We'll be asking for that, because 

24           it's a match, dollar for dollar, if the local 


                                                                   266

 1           community spends a dollar, the state matches 

 2           it based on a marketing program.  And we hope 

 3           to accomplish great things this summer.

 4                  Thank you very much.

 5                  CHAIRWOMAN KRUEGER:  Thank you.  

 6                  All right, who might have a question 

 7           for any of our guests?

 8                  CHAIRWOMAN WEINSTEIN:  We have 

 9           Assemblywoman Pat Fahy, three minutes.

10                  CHAIRWOMAN KRUEGER:  Okay.

11                  ASSEMBLYWOMAN FAHY:  Thank you.  And I 

12           really think this is my last question.

13                  But great panel, thank you for all you 

14           have said and done.  The numbers, going back 

15           to what Joe Masher said with theaters, we 

16           talk so much about the industries that have 

17           been so devastated because of COVID, but 

18           there are a few I can -- that can point to 

19           the absolute devastation of what happened 

20           with the movie theaters.

21                  So regarding the employment -- a 

22           question there, and then I want to get to 

23           Mark Dorr as well within my three minutes.  A 

24           question there on what will help -- I'm 


                                                                   267

 1           actually surprised there are any independent 

 2           theaters, movie theaters left.  So on one 

 3           hand, kudos to the movie theaters that have 

 4           stayed and are trying to survive this, huge 

 5           kudos.

 6                  But if you can tell us about those 

 7           that expect to leave and what it's going to 

 8           take to make them reemploy people.  

 9                  And then, before I stop, I want to -- 

10           then, secondly, I want to get to Mark Dorr to 

11           see if the sales tax on -- again, if you 

12           could take a few more seconds to explain the 

13           difference that this could make to some of 

14           our upstate counties.  The reason I have 

15           supported the upstate -- in some ways it's an 

16           upstate Airbnb bill, because they're already 

17           doing that more in the city.  It's to level 

18           the playing field.  Because when you are not 

19           paying your taxes, you are indirectly hurting 

20           hotels and motels.

21                  So if you would start with Joe Masher 

22           on what it's going to take to get the 

23           theaters back -- I've got a minute and a half 

24           here, or less -- and then Mark Dorr, please.


                                                                   268

 1                  MR. MASHER:  Thank you again for your 

 2           support, Assemblywoman Fahy.

 3                  A big step happened yesterday when the 

 4           Governor announced that New York City 

 5           theaters can reopen.  Without New York City 

 6           and LA, studios have not released big movies 

 7           exclusively into theaters, so it's limited 

 8           our chances, where we are open, to gain an 

 9           audience.

10                  We have done so, as I said, very, very 

11           safely with zero cases.  So, you know, the 

12           theaters that have managed to hang on -- and 

13           there are many that just won't reopen -- 

14           really need extra amenities such as alcohol 

15           to lure patrons back.  It's not a place where 

16           people come and get drunk, it's not a place 

17           where people are coming to buy multiple 

18           drinks, it's an amenity.  And we need 

19           amenities to keep people coming back to 

20           theaters.

21                  We're excited to get reopened in 

22           New York City next Friday, and we hope that 

23           you'll support this to get us the amenities 

24           that we need to continue to --


                                                                   269

 1                  ASSEMBLYWOMAN FAHY:  I've carried the 

 2           bill for a few years.  I assure you I will 

 3           support it.

 4                  MR. MASHER:  You and everybody else.

 5                  ASSEMBLYWOMAN FAHY:  I'm trying to 

 6           make sure that bill extends beyond the 

 7           executive orders.

 8                  And then Mark Dorr, if you could 

 9           please respond to the --

10                  MR. DORR:  Well, the sales tax 

11           portion, for many years -- the sales tax 

12           collecting that's in the Executive Budget 

13           provides for state and local county sales tax 

14           to go on those short-term rentals, your 

15           Airbnbs, your VRBOs.  Eighteen million 

16           dollars throughout the whole state just on 

17           the sales tax.

18                  The one thing, if I may, the second 

19           component that Assemblymember Fahy carries a 

20           bill for us is the occupancy tax.  And I was 

21           so glad to be included on sort of the theater 

22           panel here, because one of the biggest 

23           disparities as the hotels -- and hotels are 

24           not against short-term rentals, they just a 


                                                                   270

 1           level playing field so that they're all doing 

 2           the same thing.

 3                  Real quickly, on the occupancy tax, it 

 4           goes into marketing and promoting regions.  

 5           {Zoom interruption}  And if you've got 

 6           theaters that are full, that spills over into 

 7           the hotels -- that segment of our industry is 

 8           not collecting the occupancy tax, which goes 

 9           into drawing more people in.  So if we can 

10           get theirs, the second part, that would help 

11           promote and bring people to the theaters as 

12           well.

13                  So thank you.

14                  ASSEMBLYWOMAN FAHY:  Thank you.  Thank 

15           you to the chairs.  

16                  Really look forward to working with 

17           both of you, and more.  Thank you.

18                  CHAIRWOMAN KRUEGER:  Helene, I have a 

19           question, if you don't mind.  Thank you.

20                  So Mr. Dorr, following up on the hotel 

21           tax question.  Actually, Pat Fahy is 

22           incorrect, New York City does not use the 

23           property taxes for this kind of model at all.

24                  ASSEMBLYWOMAN FAHY:  My mistake.  


                                                                   271

 1           Thank you.  Yes, my mistake.  Let's pass it 

 2           for the whole state.  Thank you, Chair.

 3                  CHAIRWOMAN KRUEGER:  But the concern 

 4           that's been brought out in many places all 

 5           around the country is that if you're going to 

 6           collect the sales tax, it needs to be done 

 7           correctly so that the government knows who 

 8           exactly is paying the sales tax at which 

 9           location.  And this bill is not written -- 

10           the way the Governor has it written, that it 

11           would be in violation of actually our tax 

12           laws and the country's tax laws.

13                  So would you agree that a tax that is 

14           provided through a third-party vendor without 

15           the government knowing who's paying the tax 

16           or on what business, would be a problem?

17                  MR. DORR:  They're going to need to 

18           report who their hosts are in order to make 

19           sure the tax is being collected.  There's a 

20           lot of county sort of tax agreements where 

21           they just send in a check and say, this is 

22           what we -- you know, there's no way to check 

23           and make sure.

24                  But as I understand it, we would want 


                                                                   272

 1           them to put in there -- when they're putting 

 2           the tax in, they have to register the host 

 3           and the money comes through the third party.

 4                  CHAIRWOMAN KRUEGER:  Well, my 

 5           understanding is that they don't want to 

 6           actually have to register who the host is or 

 7           what the address is where this is taking 

 8           place.  

 9                  Because once you get into occupancy 

10           taxes or other collections of fees, you also 

11           have to look into are they in violation of 

12           other laws.  So we have stricter laws for 

13           hotels than for private residences for good 

14           reasons.  So if somebody's going to suddenly 

15           go into the business -- and it would be 

16           business because it's paying hotel and 

17           occupancy taxes -- then make sure that they 

18           are following the correct building codes and 

19           fire codes and electric codes, which will be 

20           a serious problem for many of these people 

21           who might think it's simply a question of, 

22           you know, renting out for a few days.

23                  So it's a lot more complicated than 

24           sometimes it comes across.  But I don't want 


                                                                   273

 1           to take any more time up in today's hearing, 

 2           but I'm happy to discuss it further with 

 3           anyone.  And I am going to move us along 

 4           unless somebody tells me, we need to let you 

 5           ask more questions of this panel.

 6                  And no one's saying that --

 7                  CHAIRWOMAN WEINSTEIN:  We have --

 8                  CHAIRWOMAN KRUEGER:  Yes?

 9                  CHAIRWOMAN WEINSTEIN:  We have no 

10           further hands raised, Senator, so we can move 

11           on.

12                  CHAIRWOMAN KRUEGER:  Thank you very 

13           much.

14                  So moving on on our schedule, Panel B, 

15           I'll just read off the names first.  Post 

16           New York Alliance, Yana Collins Lehman; 

17           New York City Artist Collective, 

18           Olympia Kazi; Long Island Progressive 

19           Coalition, Lisa Tyson; and Chhaya CDC, 

20           Jose Miranda.  Although there might be a note 

21           that we might not have found him.  So let's 

22           see if he was showing up.

23                  THE MODERATOR:  Yes, they didn't show 

24           up.


                                                                   274

 1                  CHAIRWOMAN KRUEGER:  The first three 

 2           are here, though, right?

 3                  THE MODERATOR:  Correct.

 4                  CHAIRWOMAN KRUEGER:  Fine, let's start 

 5           with Yana.  Hello, Yana, can you unmute?

 6                  MS. LEHMAN:  Hello, yes.

 7                  CHAIRWOMAN KRUEGER:  There you are.  

 8           Hi.

 9                  MS. LEHMAN:  Good morning.  Good 

10           morning, Chairwoman Krueger --

11                  CHAIRWOMAN KRUEGER:  No, it's 

12           afternoon.

13                  MS. LEHMAN:  Good afternoon.  Good 

14           afternoon, Chairwoman Krueger, Chairwoman 

15           Weinstein, and distinguished members of the 

16           New York State Finance Committee and the 

17           Assembly Ways and Means Committee.

18                  I am Yana Collins Lehman, and I thank 

19           you for the opportunity to provide testimony 

20           on behalf of the Post New York Alliance, 

21           PNYA, the association of film and television 

22           post-production facilities and labor unions 

23           operating in New York.

24                  The PNYA is made up of over 


                                                                   275

 1           65 companies from all over the State of 

 2           New York, with over 600 individual 

 3           post-production professionals working in film  

 4           and television.  It is the mission of the 

 5           PNYA to incentivize film and television 

 6           projects to finish in New York, to market the 

 7           services provided by New York's 

 8           post-production industry, and to create 

 9           avenues for talent to enter into this 

10           fast-growing sector of the economy.

11                  To that end, we testify today in 

12           support of the Governor's proposed extension 

13           of the Post-Production Tax Credit in the 

14           state budget.  The post-production credit is 

15           a $25 million suballocation of the 

16           $420 million Empire State Film Production 

17           Credit.  

18                  This framework divides the overall 

19           post-production program into two components: 

20           a Production Tax Credit that provides an 

21           incentive for productions that shoot in 

22           New York, including subsequent in-state 

23           expenses on post-production; and a 

24           Post-Production Tax Credit that incentivizes 


                                                                   276

 1           additional productions which shoot outside 

 2           New York to bring the projects to New York 

 3           for their post-production work.  

 4                  The success of the program is 

 5           unparalleled, with the post-production sector 

 6           seeing explosive growth since enactment of 

 7           the separate post-production incentive, 

 8           allowing domestic productions to bring scores 

 9           of editorial work to New York.  By enhancing 

10           the credit, it allowed New York to compete 

11           with Canada, which has a 48 percent Visual 

12           Effects Labor credit, and the UK, which 

13           credits 30 percent on 100 percent of a spend 

14           of 80 percent of the spend that happens in 

15           the UK. 

16                  We've succeeded in repatriating 

17           high-paying vis effects jobs that were based 

18           in China and India because producers prefer 

19           having talent in the same time zone and they 

20           offset the New York labor cost increase with 

21           the credit.  

22                  The PNYA commissioned a 2019 report 

23           from HR&A Advisors illustrating the 

24           post-production program's role as both a jobs 


                                                                   277

 1           creator and an economic stimulus for 

 2           New York's economy.  The report indicated 

 3           that over 10,800 people, including 

 4           3,560 freelancers, worked in the 

 5           post-production ecosystem -- all jobs in the 

 6           traditionally defined post-production 

 7           industry, as well as all post-production jobs 

 8           in adjacent industries -- with an average 

 9           income of $83,000.  

10                  In contrast, prior to the 

11           post-production incentive, it was a rare 

12           occurrence for productions that didn't shoot 

13           in New York to opt to engage their editorial 

14           work in New York.  And in fact, after the 

15           credits spurred the growth of our sector, 

16           35 percent more people worked in New York's 

17           post-production ecosystem in 2019 than in 

18           2004.  

19                  Over 40 percent of traditionally 

20           defined post-production jobs in New York do 

21           not require a bachelor's degree, and a 

22           diverse talent development pipeline breaks 

23           down barriers to opportunity.  

24                  In addition, approximately 13,250 jobs 


                                                                   278

 1           are supported by this growing post-production 

 2           ecosystem, with average wages of $86,000.  

 3           All together, these 24,000 middle-class jobs 

 4           across the state can be attributed to the 

 5           post-production credit, with our sector's 

 6           continued growth and stability likewise tied 

 7           to its long-term extension.  

 8                  All this job growth and investment 

 9           buoyed by the post-production credit ripples 

10           across the New York State economy.  Direct 

11           investment tied to the credit in 2017 led to 

12           $6.9 billion in spending, $2 billion in wages 

13           paid, and $142 million in state tax revenues 

14           back to the state and localities.  The 

15           credits have helped New York become a 

16           national leader in post-production, and 

17           20 percent of U.S.-based post-production 

18           firms call New York home.  

19                  However, like all industries, 

20           post-production has been highly impacted by 

21           the COVID-19 pandemic.  The post-production 

22           credit insists that 75 percent of eligible 

23           spend occur within the state.  However, our 

24           physical offices worked with skeleton crews 


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 1           to adhere to state COVID-19 protocols.  As a 

 2           result, much of our editorial work has 

 3           occurred directly in individual workers' 

 4           homes, in many cases out-of-state.  

 5                  This has led to significant confusion 

 6           regarding how to accurately determine 

 7           eligibility for the incentive where the 

 8           primary office is in New York, but the 

 9           individual is telecommuting from their home 

10           state.  This is not an academic question.  

11           Already a few large film productions and at 

12           least two repeat TV series, not sure whether 

13           they would still qualify for the credit with 

14           much of their labor having to move 

15           out-of-state, left New York for good and gave 

16           up the credit.  

17                  To clarify this matter, we are 

18           proposing language be added to the Governor's 

19           proposed extension that will explicitly 

20           qualify the costs of out-of-state 

21           telecommuting workers of New York’s 

22           post-production businesses for the tax 

23           credit's rebate.  

24                  Such language is thematically 


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 1           consistent with the Department of Taxation 

 2           and Finance's guidelines, which subject state 

 3           taxes to wages paid to non-state residents 

 4           who telecommute to a primary office within 

 5           New York.  Given these workers pay New York 

 6           state taxes, we believe their work should 

 7           also be eligible for New York's tax 

 8           incentive.  

 9                  In summation, the Empire State Film 

10           Post-Production Tax Credit has supported the 

11           creation of thousands of jobs and billions of 

12           dollars in wages and economic activity.  The 

13           PNYA respectfully urges your support for the 

14           Governor's proposed one-year extension of the 

15           Post-Production Tax Credit, and asks for your 

16           support in clarifying that the spend on 

17           out-of-state telecommuters will be eligible 

18           for the post-production incentive.  This 

19           proposed extension and technical 

20           clarification will ensure a continuation of 

21           the growth, vibrancy, and vitality of the 

22           post-production industry throughout the 

23           state.  

24                  I thank you for this opportunity to 


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 1           testify on behalf of our industry, and I look 

 2           forward to answering any questions the panel 

 3           may have.

 4                  CHAIRWOMAN KRUEGER:  Thank you.

 5                  Next, we have Olymbi -- I'm so sorry.  

 6           Yes, Olympia Kazi.

 7                  MS. KAZI:  Don't worry.  My name is 

 8           Olympia Kazi.  Can you hear me?

 9                  CHAIRWOMAN KRUEGER:  Yes, we can, 

10           thank you.

11                  MS. KAZI:  Okay.  So thank you for 

12           holding this hearing and for asking great 

13           questions all day today.

14                  My name is Olympia Kazi, and I'm a 

15           founding member of the Music Workers 

16           Alliance, a group of independent musicians 

17           and DJs who fight against unfair treatment, 

18           and the New York City Artist Coalition, not 

19           collective.  Our claim to fame was that we 

20           were the leading group in repealing the 

21           Cabaret Law.  And as a result of that work, I 

22           also serve as the vice chair of the New York 

23           City Night Life Advisory Board.

24                  The New York City Artist Coalition 


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 1           advocates for the safety and preservation of 

 2           grassroots cultural spaces and is also a 

 3           member of the United for Small Business NYC.

 4                  First of all, I'd like to counter a 

 5           remark made earlier today by Commissioner 

 6           Eric Gertler, who said that New York State 

 7           was thriving before the pandemic.  The truth 

 8           is the markets were thriving, but the 

 9           majority of working people of our state were 

10           left behind, struggling with housing costs 

11           and unfair employment situations.  So this 

12           year we need to pass a budget that puts us on 

13           a more equitable path forward.

14                  Today I'll ask you to fund two very 

15           important items for the recovery of the 

16           people of our state:  Commercial rent relief 

17           with at least 500 million, as it is asked by 

18           the Save Our Store Fronts; and a WPA-style 

19           program as outlined by Assemblymember Fahy's 

20           bill for all workers in need, with 

21           $2 billion.  

22                  To fully fund these initiatives we'll 

23           need to enact the taxes proposed by the 

24           Invest in Our New York Act.  These long-term 


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 1           revenue raisers will be critical, not just 

 2           for the short-term recovery but also for 

 3           ongoing future investments in our 

 4           communities.  

 5                  So rent is really the elephant in the 

 6           room for small businesses.  Arts and cultural 

 7           venues are commercial tenants, so we face the 

 8           same issues as the small businesses, and we 

 9           have very little if any protections.  It 

10           takes years to establish a cultural space 

11           with our community of artists, employees, 

12           suppliers, and of course audience, and very 

13           often they are shuttered overnight with 

14           exorbitant rents.  

15                  The few that are surviving right now, 

16           they face the back rent, when they will have 

17           to pay it, and they accrued in the meanwhile 

18           crazy debt.

19                  So we really need to invest, 

20           especially in the small grassroots cultural 

21           spaces -- that's low-income, minority and 

22           marginalized communities.

23                  Also, you know, the important thing is 

24           what is happening with our workers.  We know 


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 1           the unemployment rate is huge, and especially 

 2           for the performing arts, they've been 

 3           shuttered since last March, so a year now.  

 4           And the broken and piecemeal unemployment 

 5           system has left many workers out -- basically 

 6           struggling to survive.  So we need to pass a 

 7           WPA bill for the next three years when we're 

 8           hoping to be able, within three years, to get 

 9           back to the 2019 level of productions.

10                  But long-term, there can be no 

11           recovery for New York if we don't invest in 

12           our arts and culture and in our people.  So 

13           please pass a good budget and stop the 

14           scarcity mentality that our Governor has 

15           imposed during a pandemic in a cruel way, 

16           frankly.

17                  Thank you so much.

18                  CHAIRWOMAN KRUEGER:  Thank you.

19                  And our next, Lisa Tyson.  Hello.

20                  MS. TYSON:  Hello, how are you?  

21                  Thank you.  My name is Lisa Tyson, 

22           director of the Long Island Progressive 

23           Coalition.  I really appreciate speaking and 

24           having this opportunity to speak to you at 


                                                                   285

 1           this hearing.

 2                  I'm a resident of Bellmore, 

 3           Long Island.  Long Island Progressive 

 4           Coalition fights for structural change at the 

 5           local, state and national levels to attain 

 6           racial justice, build community wealth and 

 7           realize a just transition to a 100 percent 

 8           renewable energy future.

 9                  Actually, earlier today I was outside 

10           Senator Thomas's office to drop off 

11           1700 postcards from Long Islanders across the 

12           island who believe in legalizing marijuana.  

13           All across Long Island, people believe in it.  

14           It is not a fringe issue.  There's huge 

15           public support for legalization -- from moms 

16           like me, veterans, seniors.  We were out 

17           today, and we really need your support in 

18           moving this forward.  

19                  So we're here really to talk about 

20           legalization, but any proposal worth passing 

21           must center on equity, community 

22           reinvestment, remove critical penalties and 

23           repair the past harms caused by the failed 

24           war on drugs.


                                                                   286

 1                  Cannabis prohibition has been a racist 

 2           endeavor since the beginning.  Decades of 

 3           criminalization have disproportionately 

 4           affected Black and brown communities, despite 

 5           the fact that white people consume and sell 

 6           marijuana at the same rate.  

 7                  Outside of New York City, Long Island 

 8           has some of the biggest disparities.  Nassau 

 9           and Suffolk counties had the highest arrest 

10           rates for low-level marijuana offenses in the 

11           state from 2010 to 2017, with people of color 

12           being arrested and prosecuted at a 

13           significantly higher rate than white people.

14                  Many of the arrests on Long Island are 

15           the result of the stop-and-frisk traffic 

16           stops, where officers stop drivers if they 

17           have a reasonable suspicion of criminal 

18           activity.  Officers routinely use, without 

19           evidence, the odor of marijuana as a pretext 

20           for these instances.

21                  These racially biased stop-and-frisk 

22           traffic stops are pervasive throughout 

23           Long Island.  A recent Newsday analysis found 

24           that Suffolk County police officers pulled 


                                                                   287

 1           over Black drivers almost four times more 

 2           than white drivers, and Hispanic drivers 

 3           twice as often.  More tellingly, after 

 4           stopping drivers police search Blacks over 

 5           three times more frequently than whites, and 

 6           Hispanics 1.7 more times.

 7                  Virginia has banned police searches 

 8           based on the smell of marijuana, and in 

 9           July 2020 Maryland's highest court affirmed 

10           that police cannot use the smell of marijuana 

11           to search and arrest a person.  A 

12           Pennsylvania appeals court ruled in 

13           October 2020 that marijuana smell alone 

14           cannot form the basis for a vehicle search.

15                  New York should follow suit, in tandem 

16           with the passage of a legalization proposal 

17           rooted in racial and economic justice, so 

18           those most harmed by disproportionate 

19           enforcement of misguided prohibition policies 

20           are in a position to benefit most from our 

21           state's new, well-regulated cannabis 

22           industry, which will generate 50,806 jobs, 

23           $2.2 billion in employee compensation, 

24           $4.7 billion in value added, and $6.1 billion 


                                                                   288

 1           in total economic output, according to the 

 2           new study by economist James Parrott and 

 3           labor-market consultant Michele Mattingly.

 4                  Beyond restorative justice and 

 5           economic conditions, legalizing cannabis has 

 6           multiple other benefits.  Marijuana use among 

 7           teens has decreased in states where it's 

 8           legal, and that's because legalizing and 

 9           regulating recreational cannabis makes it 

10           difficult for kids to obtain.  Multiple 

11           studies show that access to legal cannabis 

12           leads to reductions in opioid deaths by 

13           40 percent.

14                  There is broad support on Long Island 

15           for legalization, and we are ready to build 

16           the new industry on Long Island with our 

17           farms, we're ready to have a multitude of 

18           supportive businesses, and ready to open 

19           dispensaries owned by the communities most 

20           harmed by the drug wars.  This is the year 

21           New York should legalize cannabis, but we 

22           must do it the right way.

23                  Thank you.

24                  CHAIRWOMAN KRUEGER:  Thank you very 


                                                                   289

 1           much.

 2                  Anyone with any questions for this 

 3           very diverse panel?

 4                  Well, then, we appreciate your being 

 5           with us today.  Thank you very much.  And it 

 6           was quite a diverse group of proposals, thank 

 7           you.

 8                  Our next panel will be New York State 

 9           Center of Excellence in Bioinformatics and 

10           Life Sciences, Norma Nowak; Associated 

11           Medical Schools of New York, Jonathan Teyan; 

12           the Business Incubator Association of 

13           New York State, Marc Alessi; and United for 

14           Small Business NYC, Karen Narefsky.

15                  You see how diverse economic 

16           development topics are even just by the names 

17           of the organizations.  

18                  So let's start with Norma.  Are you 

19           here, Norma?

20                  DR. NOWAK:  I am.

21                  CHAIRWOMAN KRUEGER:  Hi.

22                  DR. NOWAK:  Hello.  Thank you to the 

23           chairs and committee members for the 

24           opportunity to testify today.  I am Dr. Norma 


                                                                   290

 1           Nowak, and I lead the University at Buffalo 

 2           Center of Excellence in Bioinformatics and 

 3           Life Sciences, as well as the Center for 

 4           Advanced Technology in Big Data and Health 

 5           Sciences.

 6                  The COEs and CATs are among the 

 7           highest-performing economic development 

 8           programs in the state.  Under the Executive 

 9           Budget proposal, the COEs would be eliminated 

10           and consolidated into the CAT program through 

11           competition.  Funding for the 14 COEs and 15 

12           CATs would also be reduced by 19 percent, 

13           from $23.5 million to $19 million.  

14                  On behalf of all 29 CATs and COEs, we 

15           are asking the State Legislature to once 

16           again reject the proposal to consolidate the 

17           centers as well as to restore the centers' 

18           funding levels.  

19                  The COEs were established to take 

20           advantage of regional strengths and talent, 

21           while the CATs are designated for their 

22           ability to address specific emerging 

23           technologies identified as state priorities.  

24           The COEs provide an environment to foster 


                                                                   291

 1           collaboration between academia and industry.  

 2           These facilities provide the academic 

 3           experts, staff, student talent and 

 4           state-of-the-art technology that are critical 

 5           to the success of our industry partners.

 6                  The CAT program cuts across many 

 7           technology sectors and provides project-based 

 8           funding for collaborative applied research 

 9           with industry partners and capitalizes on 

10           matching funds from industry -- unlike the 

11           COEs, which require a match from the 

12           university.  The industry matching funds 

13           required are more challenging for startup and 

14           early-stage companies, as well as our small 

15           businesses, during the pandemic.  

16                  According to the 2017-2019 Empire 

17           State Development annual reports, the centers 

18           combined have approximately $2.5 billion in 

19           economic impact and help to create or retain 

20           10,000 jobs.  Centers typically received a 

21           million dollars annually, which has 

22           translated into an astonishing 25:1 to 45:1 

23           return on investment.  

24                  The impact of the COEs extends beyond 


                                                                   292

 1           their home regions.  For example, Buffalo's 

 2           COE anchor tenant and former UB startup, 

 3           Athenex, is now a global oncology-focused 

 4           biopharmaceutical firm with 606 employees 

 5           worldwide, with 205 in Western New York.  

 6           Their new $210 million pharmaceutical 

 7           manufacturing facility in Dunkirk, New York, 

 8           is opening later this spring and is 

 9           recruiting 450 new employees, bringing a 

10           much-needed boost to the Southern Tier 

11           region.

12                  In addition to their proven record of 

13           job creation, the COEs and CATs played a 

14           critical role in the state's response to the 

15           COVID-19 pandemic.  The centers have 

16           collaborated on over 80 COVID-related 

17           projects with industry.  The collaborations 

18           included diagnostic testing, PPE, HVAC, 

19           vaccine development, and more.

20                  The Buffalo Centers and the COE at RIT 

21           in Advanced and Sustainable Manufacturing 

22           worked together to advance You First 

23           Services' SteriSpace air sterilization 

24           technology, which eliminates airborne 


                                                                   293

 1           pathogens such as COVID-19 from the 

 2           environment when attached to an HVAC system.

 3                  The rapid response to the sudden and 

 4           unexpected demands of the pandemic 

 5           demonstrates how valuable COEs and CATs have 

 6           been for addressing the public health crisis 

 7           of our time, as well as rebuilding our 

 8           economy.  Let us not divest in them and turn 

 9           back the progress we have achieved.

10                  As I have shown, it is critical for 

11           the State Legislature to again reject the 

12           Executive Budget proposal to eliminate the 

13           Centers of Excellence as well as restore 

14           funding, continuing the centers' progress to 

15           drive an innovation economy throughout 

16           New York.  

17                  Thank you.

18                  CHAIRWOMAN KRUEGER:  Wow, perfect 

19           timing.  Well done.

20                  (Laughter.)

21                  CHAIRWOMAN KRUEGER:  Next -- sorry.  

22           Let's see.  Who's our next speaker?  Is that 

23           Marc Alessi?  Or Jonathan Teyan?

24                  MR. TEYAN:  Yes.  I believe it's me.


                                                                   294

 1                  CHAIRWOMAN KRUEGER:  Thank you, 

 2           Jonathan, it is.

 3                  MR. TEYAN:  So thank you, Chairs 

 4           Krueger and Weinstein, for the opportunity to 

 5           testify.  And good afternoon to all the 

 6           distinguished members.

 7                  My name is Jonathan Teyan.  I'm the 

 8           COO of the Associated Medical Schools of 

 9           New York.  We are the consortium of the 

10           17 medical schools in the state.  

11                  We have more medical schools in 

12           New York than any other state in the nation.  

13           We also have an embarrassment of riches in 

14           some of the, you know, best academic research 

15           institutions in the world and a really high 

16           concentration of biopharma companies.

17                  I really want to take this opportunity 

18           to underscore the importance of biomedical 

19           research and the life sciences.  They're 

20           vital components of what the medical schools 

21           do, but they're also vital to the state's 

22           economy.  Really, New York is a leader in so 

23           many areas within the life sciences.

24                  And just to give a very broad 


                                                                   295

 1           overview, in 2020 we brought in $3.2 billion 

 2           in NIH funding to New York, much of which -- 

 3           most of which went to the medical schools and 

 4           supported more than 6,000 research projects.

 5                  One thing I really just would take a 

 6           moment to highlight and echo some of 

 7           Dr. Nowak's comments.  You know, when COVID 

 8           arrived, really much of our research 

 9           community pivoted to understanding and 

10           treating COVID.  And I think it really 

11           underscores the need to maintain a life 

12           sciences infrastructure and a robust 

13           scientific workforce.  And that dovetails -- 

14           actually leads into my -- the two programs 

15           that I would really like to highlight this 

16           afternoon, which are the NYFIRST program and 

17           NYSTEM, the stem cell program.

18                  So firstly the NYFIRST program -- as a 

19           reminder, this was a $20 million investment 

20           included in the 2018 Life Sciences 

21           Initiative.  It supports the recruitment and 

22           retention of star scientists to the medical 

23           schools.  It has worked extraordinarily well.  

24                  There have been three cycles of RFAs 


                                                                   296

 1           since it was first launched in 2018.  The 

 2           first one was made official, the first set of 

 3           awards was made official in 2019.  Three 

 4           recruits from outside New York came here and 

 5           basically set up their labs, which function 

 6           as small businesses within the medical 

 7           schools.  They have, we project, created a 

 8           hundred jobs in the first three years, and 

 9           their institutions have matched with another 

10           $17.5 million in their own investments.

11                  So we'd really like to see this 

12           program continue, and that the 

13           unappropriated -- the unspent funds get 

14           reappropriated in the upcoming budget.  

15                  And just quickly, since I am running 

16           out of time, the NYSTEM program has really 

17           been a -- has been the flagship life sciences 

18           investment in New York for the past decade.  

19           It was envisioned as a $600 million 

20           investment to make New York a leader in stem 

21           cell science.  It has done that, and more.  

22           It actually has generated quite a lot of 

23           economic activity.  We've spun out some very 

24           large companies that have attracted hundreds 


                                                                   297

 1           of millions of dollars in DC investment.

 2                  And unfortunately, the Executive 

 3           Budget proposal would terminate the program 

 4           with no new funding for that research after 

 5           April 1st of this year.

 6                  Again, we think it's an 

 7           extraordinarily successful program that has 

 8           both major health implications, major 

 9           economic implications, and the science really 

10           has reached maturity.  We're launching 

11           clinical trials -- actually trials have been 

12           launched in Parkinson's disease, sickle cell 

13           disease, and many other areas.

14                  And, you know, just in closing I would 

15           say that at a time when COVID has really 

16           emphasized how important research is, it 

17           seems perplexing to terminate what has, 

18           again, been our flagship investment in life 

19           sciences in New York for the past decade.  

20                  So I'll leave it there, since I am 

21           over time, and thank you again for the 

22           opportunity.

23                  CHAIRWOMAN KRUEGER:  Thank you, 

24           Jonathan.


                                                                   298

 1                  Next is Marc Alessi, Business 

 2           Incubator Association of New York State.

 3                  MR. ALESSI:  Thank you for the 

 4           opportunity, Chairwoman, for me to give 

 5           testimony on behalf of the incubators of 

 6           New York State.  I'm the executive director 

 7           for the Incubator Association.  We are a 

 8           member-led trade association of over 

 9           100 incubators and accelerators across 

10           New York State that house over 3,000 startup 

11           companies.  

12                  In addition to this role, I'm also a 

13           startup entrepreneur myself, with a company 

14           that is housed in Stony Brook's incubators on 

15           Long Island.  And I'm a former State 

16           Assemblyman, so I think I have a unique 

17           perspective on the macro end of what you're 

18           looking for out of economic development 

19           programs for the people of New York State 

20           and, at the micro end, as an entrepreneur 

21           that's on the receiving end of some of the 

22           services provided on this maturing innovation 

23           ecosystem.

24                  The importance of incubation cannot be 


                                                                   299

 1           overstated.  Many of you may have heard how 

 2           90 percent of startups fail.  And when you 

 3           look at startups, that could be anything from 

 4           a tech startup at an incubator to a local 

 5           restaurant in our downtown.

 6                  But incubated startups, 50 percent of 

 7           them succeed.  As a result of the programming 

 8           that they receive, and the mentorship, we're 

 9           able to de-risk these companies.  Incubated 

10           startups that succeed have the potential to 

11           grow very fast and add hundreds of jobs, and 

12           we've seen this across New York State.  

13                  When I was in the Assembly, I was the 

14           chair of the Subcommittee on the 

15           Emerging Workforce, a subcommittee of the 

16           Labor Committee, and we held hearings to try 

17           to figure out how back then -- this is 2008, 

18           2009 -- the State of Tennessee was 

19           commercializing more of their higher ed IP 

20           than New York State, and a lot of that had to 

21           do with a lack of investment in the 

22           innovation and entrepreneurial ecosystem.

23                  That has changed over the past 10 to 

24           15 years, and you've made that investment.  


                                                                   300

 1           And we went from falling behind Tennessee to 

 2           the second-largest innovation ecosystem in 

 3           the world, pumping out thousands of jobs a 

 4           year, hundreds of millions in venture capital 

 5           investment, and billions in economic 

 6           activity.  

 7                  So I would say during this COVID 

 8           crisis it's definitely not time to hit the 

 9           brakes, it's time to hit the accelerator on 

10           these types of programs.  You know, you know, 

11           in terms of programs that our association 

12           offers incubators, we offer education to the 

13           incubator managers, we bring them together to 

14           share best practices.  We are launching this 

15           year, thanks to some legislative grant 

16           funding we were able to obtain from former 

17           Senator Marty Golden, a soft landings program 

18           to bring international companies to the 

19           United States, through New York State, 

20           through our incubation programs.

21                  And, you know, our pre-incubation 

22           program to help Main Street entrepreneurs 

23           succeed is a new program launched this year 

24           as well.  But we need to maintain the funding 


                                                                   301

 1           of the Certified Incubator programs that the 

 2           Governor has included in his budget at 

 3           $2.5 million, and the Hotspot Regional 

 4           Incubator Program, which funds regions at 

 5           $2.5 million for all the incubators in those 

 6           regions to be able to partake in the program.

 7                  And the last thing -- I know I'm out 

 8           of time --

 9                  CHAIRWOMAN KRUEGER:  You are out of 

10           time.

11                  MR. ALESSI:  There's a fix that's 

12           needed in the START-UP NY program.  Because 

13           of COVID-19, there are companies that have 

14           promised job creation, they've created those 

15           jobs, but those jobs are supposed to report 

16           to the START-UP NY location, and because of 

17           COVID-19 social distancing, those employees 

18           are being asked to stay home and remote work.  

19                  And these companies are now being 

20           informed by State Tax and Finance that 

21           they're not going to qualify for the program 

22           because of this hiccup.  And we need to fix 

23           this in the state budget.

24                  CHAIRWOMAN KRUEGER:  Thank you.


                                                                   302

 1                  Thank you.  I see the ranker from 

 2           Ways and Means -- I was going to make you a 

 3           Senator, but let's leave you in the Assembly, 

 4           Assemblymember Ra for five minutes.

 5                  ASSEMBLYMAN RA:  Thank you, Chair.  

 6           I'm happy to stay in the Assembly, so --

 7                  (Laughter.)

 8                  ASSEMBLYMAN RA:  I just had kind of 

 9           some follow-ups regarding the Centers of 

10           Excellence and the CATs and that proposal.  

11                  But I just wanted to -- directly to 

12           Ms. Nowak, was your Center of Excellence 

13           funded or had funding withheld last year, 

14           from last year's budget?

15                  DR. NOWAK:  We had some money taken 

16           back, so the budget was reduced.  And there 

17           is going to be a hold-back of funds, so we'll 

18           submit 100 percent of our costs, but there 

19           will be a 20 percent hold-back.

20                  CHAIRWOMAN KRUEGER:  Assemblymember, I 

21           left one of the panelists off.  So do you 

22           mind if I --

23                  ASSEMBLYMAN RA:  Oh, go ahead, I'm 

24           sorry.


                                                                   303

 1                  CHAIRWOMAN KRUEGER:  No, it was 

 2           totally my fault.  

 3                  I apologize, Karen.  So we're going to 

 4           reset the clock, we're going to go back and 

 5           have you testify, and then we'll 

 6           Assemblymember Ra his five minutes again.

 7                  Okay, Karen Narefsky.  Are you on 

 8           mute?  Can you come off mute, Karen?

 9                  MS. NAREFSKY:  Great, thank you.  Can 

10           you all hear me?

11                  CHAIRWOMAN KRUEGER:  Yes.

12                  MS. NAREFSKY:  Can you all hear me?

13                  CHAIRWOMAN KRUEGER:  Yes.

14                  MS. NAREFSKY:  Great.  Thank you so 

15           much --

16                  CHAIRWOMAN KRUEGER:  Lost you.

17                  MS. NAREFSKY:  Can you all hear me?

18                  CHAIRWOMAN KRUEGER:  Now, yes.

19                  MS. NAREFSKY:  Fabulous.

20                  Thank you so much to the committee 

21           chairs for the opportunity to testify.  My 

22           name is Karen Narefsky, and I'm the senior 

23           organizer for equitable economic development 

24           at the Association for Neighborhood and 


                                                                   304

 1           Housing Development, one of New York City's 

 2           leading policy and advocacy organizations, 

 3           with a membership of over 80 nonprofits.

 4                  I'm testifying today on behalf of 

 5           United for Small Business New York City, a 

 6           coalition convened by ANHD.  United for Small 

 7           Business is a coalition of 15 groups across 

 8           the city working to protect small businesses 

 9           and commercial tenants from displacement, 

10           especially owner-operated businesses that 

11           serve low-income communities and communities 

12           of color.  So these are really the smallest 

13           businesses that so many of the committee 

14           members today have mentioned.

15                  In 2019 we conducted research on the 

16           challenges facing small businesses in 

17           immigrant commercial corridors, and we found 

18           that high rents were a top concern for 

19           82 percent of those businesses.  Because of 

20           the pandemic, what was formerly a concern is 

21           now an existential threat.  And because of 

22           this, I want to urge the Legislature to 

23           prioritize commercial rent relief as part of 

24           the strategy for equitable economic recovery.


                                                                   305

 1                  As several of the committee members 

 2           have already mentioned today, existing state 

 3           programs don't address the need for rent 

 4           relief, and the individual deals that have 

 5           been worked out are not going to be 

 6           sustainable forever, for tenants or for 

 7           property owners.

 8                  With regards to the various eviction 

 9           restrictions that are in place, they're not 

10           truly moratoriums.  But even if they were, 

11           commercial tenants are not going to wait for 

12           an eviction notice if they don't have the 

13           money to maintain operations.  They're either 

14           going to close, or they're going to go 

15           bankrupt.  And as a matter of fact, 

16           bankruptcy filings have increased by 40 

17           percent in New York City last year, and 

18           thousands of businesses have already closed.  

19                  We shouldn't really be asking 

20           businesses to reopen at the expense of public 

21           health.  We know that 25 percent capacity 

22           indoor dining is not profitable for 

23           restaurants, but we also know that 

24           100 percent capacity indoor dining isn't 


                                                                   306

 1           safe.  Not to mention we love restaurants, 

 2           but we also have many types of businesses 

 3           across the state and they all have different 

 4           needs.  

 5                  What they have in common is the need 

 6           for a bridge that will help them get from the 

 7           current crisis to a recovery where they can 

 8           operate as they did before the pandemic.  If 

 9           we don't provide that bridge, the state will 

10           lose millions of jobs, billions of dollars in 

11           tax revenue, and the goods and services 

12           provided by those businesses, which in many 

13           cases are culturally specific to the 

14           neighborhood and hard to replace.

15                  As I mentioned earlier, our coalition 

16           supports a broadly accessible commercial rent 

17           relief program, and we'd like the state to 

18           devote $500 million to this program in the 

19           budget.  We support the approach of 

20           Senate Bill 3349 and Assembly Bill 3190, 

21           sponsored by Senator Hoylman and 

22           Assemblymember Epstein, under which all 

23           commercial tenants who have lost revenue due 

24           to COVID and can't pay rent would qualify for 


                                                                   307

 1           a partial abatement and would be required to 

 2           pay a prorated portion of their rent or 

 3           actual income.  

 4                  Property owners whose tenants get this 

 5           abatement would be eligible for reimbursement 

 6           from the state, and we believe that there's a 

 7           rule for ESD to play here in administering 

 8           that program.  This will complement the 

 9           initiative mentioned by the commissioner, and 

10           we think it's really important for all 

11           impacted small businesses to be eligible, to 

12           ensure that the smallest businesses get what 

13           they need.

14                  And finally, I want to share that ANHD 

15           also supports the intention of the proposal 

16           in the Governor's budget to allow residential 

17           conversions of hotels and office buildings to 

18           affordable housing.  However, we believe that 

19           this should exempt land zoned for 

20           manufacturing, given the limited industrial 

21           land available and the key economic role of 

22           industrial businesses.  So in New York City 

23           there are approximately 45 hotels eligible 

24           for conversion that would fall within 


                                                                   308

 1           manufacturing zones.  

 2                  We ask that the Legislature also allow 

 3           the affordable units created through 

 4           commercial conversions to be funded by city 

 5           subsidy programs as well as state programs, 

 6           and to add additional restrictions to 

 7           disincentivize the option of payments in 

 8           lieu.

 9                  So thank you again to the committee 

10           chairs and to all the members for the 

11           opportunity to testify.

12                  CHAIRWOMAN KRUEGER:  Thank you.

13                  And now we're going to go back to 

14           Assemblymember Ra; give him back five minutes 

15           on the clock.  Thank you.

16                  ASSEMBLYMAN RA:  Okay, thank you very 

17           much.  

18                  And I'm glad we heard from the last 

19           panelist, because she made a number of very 

20           important points.  So thank you.  

21                  So I got the question answered 

22           regarding withholding for that particular 

23           Center of Excellence.  But I just wanted to 

24           just go back to that issue with regard to the 


                                                                   309

 1           proposal and the -- you know, last year there 

 2           was a proposal in the budget different from 

 3           this one in terms of kind of consolidating 

 4           these programs into one.

 5                  But I had asked Commissioner Gertler 

 6           this morning regarding any outreach or 

 7           dialogue that had taken place in the interim 

 8           between last year's proposal and it being 

 9           rejected by the Legislature in the enacted 

10           budget, and this proposal this year.  You 

11           know, and I'm just wondering if you can shed 

12           any light on any conversations that have 

13           taken place, you know, with other COEs, other 

14           CATs, partners that are involved that may 

15           have led us to this proposal being before us.

16                  DR. NOWAK:  No.  We found out about 

17           the impending consolidation and additional 

18           cuts when the budget came out.  So we had 

19           heard rumors that they were going to revisit 

20           last year's proposal and that's what we would 

21           be facing again.

22                  So last year we also did not receive 

23           the Aid to Localities, so our budgets were 

24           cut by that amount.  Normally we're brought 


                                                                   310

 1           up to a million dollars, and so we didn't get 

 2           that gap filled, as well as then, you know, 

 3           going forward now facing additional cuts.

 4                  But no, there was not a lot of 

 5           communication with anyone from ESD regarding 

 6           this proposal from that.

 7                  ASSEMBLYMAN RA:  Okay.  Yeah, and -- I 

 8           mean, I don't want to belabor the point.  I 

 9           think you presented very well that there are 

10           distinct differences between the entities and 

11           what they're designed to do and the way 

12           they're designed to function, and I think 

13           losing that would be a negative.  

14                  And on top of it, I worry about the 

15           way, you know, awarding these 10-year 

16           designations.  There's this thought out there 

17           that it's going to increase competition, but 

18           it seems to me like something that could very 

19           much stifle competition by making those 

20           10-year designations.  So thank you.

21                  DR. NOWAK:  You're welcome.

22                  CHAIRWOMAN KRUEGER:  Thank you.

23                  Do I see any other hands up?  All 

24           right, well then I want to thank all of you 


                                                                   311

 1           for your presentations with us today.  

 2           Appreciate it very much.

 3                  Our next panel, Asian American 

 4           Federation, Ahyoung Kim; the New York City 

 5           Network of Worker Cooperatives Advocacy 

 6           Council, Catherine Murcek; and the New York 

 7           Association of Training and Employment 

 8           Professionals -- and it says Evelyn Ortiz, 

 9           but I believe they have been replaced by -- 

10           one second --

11                  THE MODERATOR:  Melinda Mack.

12                  CHAIRWOMAN KRUEGER:  Thank you so 

13           much.  Great.  Isn't it great how the female 

14           voice of God just comes in and clarifies 

15           everything for us?  It's excellent.  

16           Thank you.

17                  Okay, first speaker, Asian American 

18           Federation.

19                  MS. KIM:  Thank you, Chairs Krueger 

20           and Weinstein, and distinguished members of 

21           the State Legislature for this opportunity to 

22           testify. 

23                  My name is Ahyoung Kim, and I am the 

24           associate director of small business programs 


                                                                   312

 1           at the Asian American Federation.  We 

 2           represent a network of 70 member and partner 

 3           agencies, and we are also a member of the 

 4           USBNYC.

 5                  I am here today to ask that the 

 6           State Legislature allocate $500 million in 

 7           this budget to create an equitable and widely 

 8           accessible commercial rent relief program.  

 9                  In our survey of Asian American small 

10           businesses during the early months of the 

11           COVID-19 pandemic, 37 percent of respondents 

12           sited rent as a primary concern for the 

13           survival of their businesses.  Fifty-four 

14           percent of the respondents also said that 

15           they faced loss of revenue over 75 percent, 

16           while the majority of the respondents said 

17           their businesses had to operate at limited 

18           capacity or close temporarily due to the 

19           COVID-19-related restrictions.

20                  We thank the Legislature for your 

21           leadership in sponsoring the recent package 

22           of bills, including the COVID-19 Emergency 

23           Protect Our Small Businesses Act.  However, 

24           without rent relief, mass closures of small 


                                                                   313

 1           businesses across the state will be 

 2           inevitable.

 3                  In our written testimony I have 

 4           elaborated on why current measures and 

 5           available resources are not enough to avoid 

 6           mass closures.  During the height of the 

 7           pandemic in early 2020, the growth in Asian 

 8           New Yorkers filing for unemployment claims 

 9           outpaced all other groups.  Asians in this 

10           state went from filing hundreds of claims a 

11           month to thousands of claims a month.  

12                  Failure to support businesses to 

13           survive this pandemic will result in greater 

14           spending for the state, as the most 

15           vulnerable members of our community will 

16           require extended assistance while they look 

17           for employment in lieu of small businesses 

18           offering these jobs.  

19                  From 2002 to 2012, which overlaps with 

20           the latest recession we faced, Asian small 

21           businesses accounted for about half of net 

22           new economic activity and half of net new 

23           employment in New York City.  New York State 

24           cannot afford to lose this economic engine at 


                                                                   314

 1           this time.  Without our small businesses, the 

 2           road to recovery will be extended to a 

 3           perilous journey for everyone.

 4                  For immigrant communities, small 

 5           businesses are more than just business 

 6           entities.  Small businesses owned by 

 7           immigrants serve their community in ways that 

 8           are valued beyond cash transactions.  Not 

 9           only are they job creators, but they also 

10           function as training platforms for newcomers 

11           to develop their language skills, or as 

12           information and outreach hubs where 

13           government agencies are failing.  On the 

14           contrary, our small business owners are not 

15           receiving adequate assistance.  Failed 

16           outreach and lack of language assistance has 

17           left immigrant business owners in the dark as 

18           they are still struggling to survive.  

19                  This funding for commercial rent 

20           relief is not an ask for a massive bailout 

21           that rewards irresponsible corporate 

22           behavior.  Instead, we ask the Legislature to 

23           answer to the dire needs of our small 

24           business community and to recognize their 


                                                                   315

 1           contribution to the State of New York.  We 

 2           believe that the commercial rent relief must 

 3           be a critical component of the statewide 

 4           economic recovery program, and we ask you to 

 5           include this in the new budget.

 6                  Also included in our written testimony 

 7           is a list of our recommendations on how the 

 8           state can improve access to information and 

 9           capital for immigrant small business owners.

10                  Thank you for this opportunity to 

11           testify, and I'd be happy to answer any 

12           questions.

13                  CHAIRWOMAN KRUEGER:  Great.  Thank you 

14           very much.

15                  And our second speaker, from the 

16           Network of Worker Cooperatives Advocacy 

17           Council.

18                  MS. MURCEK:  Can you hear me okay?

19                  CHAIRWOMAN KRUEGER:  Hello.

20                  MS. MURCEK:  Hi, thank you.

21                  Good morning -- or good afternoon.  

22           I'd like to thank Committee Chairs Krueger, 

23           Weinstein, Kaplan and Bronson for the work 

24           you've been doing to serve New York State and 


                                                                   316

 1           for the opportunity to testify.

 2                  My name is Catherine Murcek, and I'm a 

 3           worker owner at Samamkaya Yoga Back Care & 

 4           Scoliosis Collective.  We're a worker-owned 

 5           cooperative and a democratically run and 

 6           owned business, specializing in therapeutic 

 7           yoga for a variety of ability levels.  

 8                  I'm also an elected member of the 

 9           Advocacy Council coordinated by the 

10           NYC Network of Worker Cooperatives, which 

11           supports its members -- co-ops -- through 

12           training and education, language access and 

13           resources to help its community of 

14           predominantly immigrant, POC and women of 

15           color-led member co-ops thrive.  Through 

16           workplace democracy and community control, 

17           our goal is to protect against wealth 

18           extraction, inform and empower workers, 

19           reduce income inequality, and promote 

20           economic and social justice.  

21                  NYCNoWC is also a member of the 

22           United for Small Business NYC coalition, also 

23           known as USBNYC.  

24                  As a small business owner, it has been 


                                                                   317

 1           an incredibly stressful year, as I'm sure you 

 2           can imagine, and devastating to watch a whole 

 3           community of small businesses closing 

 4           permanently all around me and across the 

 5           state.  We most likely already would have 

 6           closed too had it not been for a forgivable 

 7           PPP loan, our online offerings, which allow 

 8           us to scrape by, and our very fortunate rent 

 9           negotiation with our landlord.  

10                  However, I understand most other small 

11           businesses in my community and across the 

12           state have not been so fortunate.  Even 

13           before the pandemic, exorbitant rents were 

14           already a major issue and impediment to the 

15           growth of our small business community.  

16           Since the beginning of the state of 

17           emergency, the wealth of the wealthiest 

18           New Yorkers has increased by $77 billion at a 

19           time when thousands of New Yorkers are 

20           experiencing loss of jobs, homes, and even 

21           their lives.  I think we need to honestly ask 

22           ourselves:  Are we okay with that?

23                  In an effort to move toward a just 

24           recovery, we urge you to do the following.  


                                                                   318

 1           One, pass S3349 or A3190 to create a 

 2           comprehensive commercial rent relief program 

 3           for small businesses and nonprofit 

 4           organizations that were ordered to close, and 

 5           allocate $500 million toward it.  The program 

 6           would create a kind of "share the burden" 

 7           model where the landlord reduces the rent a 

 8           bit, the tenant would pay a portion, and the 

 9           state would help out as well.

10                  Two, support efforts to encourage 

11           worker-owned cooperatives and other 

12           democratic workplaces -- for example, a 

13           capital gains tax exemption for business 

14           owners who sell their viable business to its 

15           workers.

16                  Three, pass the Invest in Our New York 

17           Act to create necessary revenue that would be 

18           put toward these efforts and would save 

19           crucial programs and infrastructure to 

20           protect the most vulnerable New Yorkers.  

21                  And four, support the Governor's 

22           commitment to put $25 million in the 

23           Community Development Financial Institution 

24           Fund, or CDFI Fund, and go beyond that and 


                                                                   319

 1           enhance it to $100 million to increase access 

 2           to capital for our marginalized communities.  

 3                  When our small businesses cannot 

 4           thrive, it creates a ripple effect through 

 5           our economy, affecting jobs, housing and food 

 6           security.  If the state can mandate a 

 7           business to close, a change in the structure 

 8           of commercial rent should also be possible -- 

 9           and necessary, if you care about our small 

10           business culture and want to prevent New York 

11           from becoming one big shopping mall of chain 

12           stores.

13                  While the efforts made thus far are 

14           appreciated, loans and eviction moratoriums 

15           will not be able to sustainably protect our 

16           small businesses.  We need real assistance 

17           with rent, which is by far the biggest reason 

18           for small businesses closures in my community 

19           and beyond.

20                  I understand these are unprecedented 

21           times and everyone is asking for support, but 

22           it has been almost a year and it is past time 

23           to seriously deal with rent in order to 

24           ensure a just recovery.  


                                                                   320

 1                  Thank you again for hearing my 

 2           testimony.

 3                  CHAIRWOMAN KRUEGER:  Thank you very 

 4           much.

 5                  And then our last panelist from this 

 6           group, the New York State Association of 

 7           Training and Employment Professionals.

 8                  Hi.

 9                  MS. MACK:  Hi, how are you?  It's so 

10           nice to see everyone, even though we're 

11           remote.  I love everyone's backgrounds.  I 

12           feel like we get to see who likes to be 

13           outside and who likes to be inside.

14                  My name is Melinda Mack.  I run the 

15           state's workforce development association, 

16           also known as NYATEP, the New York 

17           Association of Training and Employment 

18           Professionals.  And, you know, as I come back 

19           every year, I'm here to talk about the need 

20           to continue to invest in job training and 

21           employment services to get New Yorkers back 

22           to work.

23                  And as we've learned in the last 

24           recession and we're learning in this 


                                                                   321

 1           recession, the economy does not improve for 

 2           everyone equally.  And really the folks who 

 3           struggle are individuals with a high school 

 4           diploma or less.  They did not rebound during 

 5           the last recession, and they're very unlikely 

 6           to rebound during this recession without some 

 7           additional support.

 8                  Before COVID-19 the debate that we had 

 9           with many of you and many of our elected 

10           officials in local communities was about the 

11           future of work and automation and the 

12           challenges associated with the future of 

13           work.  But really ultimately what we know is 

14           that the economy and the labor market is not 

15           designed to benefit everyone equally.  And 

16           really workforce development and job training 

17           and education is truly the leveling of the 

18           playing field that we need in order to 

19           support the economy's recovery.

20                  I know we have truly one shot to make 

21           sure we don't leave lots of people behind.  

22           We're seeing it happen across sectors across 

23           the country and across our own state.  And 

24           ultimately this is our chance to really think 


                                                                   322

 1           about and address inequity in the labor 

 2           market in a meaningful way.

 3                  So the few things that we'd like to 

 4           raise:  First, the Governor had made a 

 5           commitment in 2018 and in each consecutive 

 6           year, around $175 million for workforce 

 7           development.  That money has been incredibly 

 8           slow to go out the door, and the application 

 9           process has become incredibly burdensome.  I 

10           think at this point there's about $33 million 

11           that's been spent and 307 projects that have 

12           been funded.  

13                  The majority of those resources 

14           outside of NYSERDA -- which is a different 

15           pot of money -- have come out of the state 

16           Department of Labor, funding that they have 

17           for workforce development as well as the 

18           resources that were reprogrammed from the 

19           SUNY/CUNY 2020 program.

20                  Under the 30-day amendments we have 

21           noticed the language for those resources has 

22           changed for the Pay for Success funding, 

23           which has broadened and opened up those 

24           resources to be spent on other things.  We 


                                                                   323

 1           get that there's lots of priorities, but 

 2           consistently we keep coming back to the 

 3           Legislature and the state to say -- and the 

 4           Governor's office, to say like:  Hey, listen, 

 5           like we have lots of people who are 

 6           unemployed and underemployed, and one of the 

 7           ways we get people back to work is through 

 8           education and training.  And that funding 

 9           seems to continue to be diverted to other 

10           resources or sources.

11                  We also strongly believe that we need 

12           to be investing in high-speed broadband 

13           services to make broadband more affordable 

14           for New Yorkers.  So we're really pleased to 

15           see the Governor including that, and really 

16           recognize that this is a true equity issue.  

17           If you can't work from home, you're going to 

18           lose out on opportunities.

19                  And then lastly we would -- we're 

20           really pushing for a six-month, 100 percent 

21           income disregard for New Yorkers on public 

22           assistance or public assistance recipients 

23           who are participating in publicly funded 

24           workforce programs.  People are falling off 


                                                                   324

 1           the cliff really quickly after they get a job 

 2           and they're unable to sustain their families, 

 3           and we need to think about ways to keep 

 4           people supported so they can get into good 

 5           family-sustaining wages.

 6                  So with that, thank you very much.

 7                  CHAIRWOMAN KRUEGER:  Thank you.

 8                  You know, I had asked the ESDC 

 9           commissioner earlier today if he would give 

10           me his maps, his list of where that 

11           $175 million got spent, and he said he would, 

12           but I don't have that yet, obviously.  I 

13           would love to hear from you -- not today, 

14           because we're really behind, but hear from 

15           you where you think that money went or didn't 

16           go or was reprogrammed.

17                  Because you can argue you can 

18           reprogram to other programs within the rubric 

19           of supporting and retraining workers, but we 

20           shouldn't see that money leaving the 

21           assignment that is desperately needed, I 

22           agree with you.  So I look forward to talking 

23           to you after the hearing sometime.

24                  And without any hands up, I am going 


                                                                   325

 1           to move us to the last panel for this hearing 

 2           today, and we have Thomas Speaker, policy 

 3           analyst, Reinvent Albany; we have Isaac 

 4           Jabola-Carulos, researcher, CUNY Graduate 

 5           Center; and Beth Starks, executive director, 

 6           Chautauqua Lake Child Care Center. 

 7                  Well, I told you this was probably our 

 8           most diverse hearing as far as the topics 

 9           people were bringing with them today.  So 

10           let's start with Reinvent Albany.

11                  MR. SPEAKER:  Can you hear me?

12                  CHAIRWOMAN KRUEGER:  Yes.

13                  MR. SPEAKER:  Good afternoon, 

14           Chairs Krueger and Weinstein and members of 

15           the Legislature.  

16                  My name is Tom Speaker.  I'm a policy 

17           analyst for Reinvent Albany.  Reinvent Albany 

18           advocates for transparent, accountable 

19           New York government.  Thank you for the 

20           opportunity to testify at this hearing.  

21                  Here are some highlights of the longer 

22           testimony we submitted.  

23                  First, business subsidies are a waste 

24           of taxpayer money that could otherwise be 


                                                                   326

 1           spent on core services.  A huge body of 

 2           independent research by academic experts has 

 3           found that corporate subsidies waste taxpayer 

 4           money, are vulnerable to pay-to-play 

 5           corruption and lack transparency and 

 6           accountability.  

 7                  We urge the Legislature to hugely 

 8           increase transparency and sharply reduce the 

 9           $10 billion in subsidies New York hands out 

10           to businesses every year.  We suggest taking 

11           the following steps.

12                  Number one, hold an oversight hearing 

13           on business subsidies featuring independent 

14           experts.  We believe that a hearing would 

15           help cast light on the amount being spent on 

16           the subsidies' lack of transparency and the 

17           poor return on public investment.

18                  Number two, establish a Database of 

19           Deals.  Two years after Governor Cuomo 

20           directed Empire State Development to create a 

21           database tracking state business subsidies, 

22           there's still no database.  This is basic 

23           transparency.  It is 2021 -- enough waiting 

24           and excuses.  We believe that the Legislature 


                                                                   327

 1           should reintroduce S2815, by Senator Comrie, 

 2           and A2334, by the now-retired Assemblymember 

 3           Schimminger, and require the database in law.

 4                  Number three, pass the Opportunity 

 5           Zone Tax Break Elimination Act in the budget.  

 6           Subsidies that often start small will balloon 

 7           into incredible costs, and this is why the 

 8           Legislature must move to repeal New York's 

 9           Opportunity Zone tax break by passing S1195, 

10           by Senator Gianaris.  The bill has support 

11           from 19 organizations and six unions, 

12           including 1199 SEIU, CWA District 1, and the 

13           New York State Teachers Union.

14                  Number four, end $330 million a year 

15           in oil and gas subsidies by passing S4816, by 

16           Senator Krueger, in the budget.  Passing the 

17           bill can save more than the state projects to 

18           bring in by legalizing marijuana.  As we have 

19           noted, New York is currently trying to reduce 

20           fossil fuel pollution while subsidizing the 

21           very companies that contribute to global 

22           warming.  We think it makes no sense at all 

23           to both tax and subsidize fossil fuels.  

24                  Number five, increase the budget of 


                                                                   328

 1           the Authorities Budget Office, a crucial 

 2           subsidy watchdog, to over $3 million, as we 

 3           and other watchdogs requested back in 2018.  

 4           The ABO oversees 585 state and local 

 5           authorities that together hold $248 billion 

 6           in public debt.  But as of last year the 

 7           office has only 11 employees.  A skeleton 

 8           crew is far from what was imagined when the 

 9           ABO was first established.

10                  And finally, number six, reduce the 

11           number of Industrial Development Agencies and 

12           Local Development Corporations and make them 

13           more accountable.  We make specific 

14           recommendations for how to address the issue 

15           in our testimony.

16                  Thanks for the opportunity to testify.  

17           I welcome any questions that you might have.

18                  CHAIRWOMAN KRUEGER:  Thank you very 

19           much.

20                  Our next speaker is CUNY Graduate 

21           Center.  Hi.

22                  MR. JABOLA-CAROLUS:  Good afternoon.  

23           Can you hear me?

24                  CHAIRWOMAN KRUEGER:  Yes.


                                                                   329

 1                  MR. JABOLA-CAROLUS:  Great.

 2                  Thank you, Chairperson Krueger and 

 3           each of you for the opportunity to testify 

 4           today.  My name is Isaac Jabola-Carolus, and 

 5           I'm a Ph.D. candidate in sociology at the 

 6           CUNY Graduate Center, and my research focuses 

 7           on New York State's home care workforce, 

 8           meaning the more than 200,000 home health 

 9           aides and personal care aides who assist 

10           older adults and people with disabilities.

11                  I'm here to share a new study that 

12           I've authored with CUNY professors Stephanie 

13           Luce and Ruth Milkman.  We hope it will be 

14           useful to you as you consider the proposal 

15           budget.

16                  We examined an overlooked development 

17           strategy, investment in the state's home care 

18           workforce, and specifically we analyzed the 

19           economic impacts that would result from a 

20           substantial wage increase for home care 

21           workers.

22                  We found that lifting wages through 

23           public investment would create net positive 

24           effects, both for the home care sector and 


                                                                   330

 1           for the state economy overall.  So home care 

 2           should be viewed not only as a vital 

 3           healthcare field but as a potential driver of 

 4           economic growth.

 5                  Currently the median annual income for 

 6           New York State home care workers is only 

 7           $22,000.  We ask what would happen if the 

 8           state lifted that number to at least 

 9           $30,000 upstate, $35,000 on Long Island and 

10           in Westchester, and $40,000 in New York City.  

11           We project that would require a $4 billion 

12           investment but would yield $7.6 billion in 

13           new savings, tax revenues and economic 

14           activity, a net gain of over $3.6 billion per 

15           year.

16                  Higher wages would also attract nearly 

17           20,000 new home care workers per year, which 

18           would alleviate the severe labor shortage in 

19           this field.  And, because workers would spend 

20           much of their new wages, this investment 

21           would create nearly 18,000 jobs in other 

22           industries.

23                  We know home care is a booming sector.  

24           Consumer demand is locked in.  Job positions 


                                                                   331

 1           are ready to fill, yet because wages are so 

 2           low, thousands of jobs go unfilled or are 

 3           vacated each year, and even more so in this 

 4           pandemic.  This hurts the state's aging 

 5           population and it's wasted economic 

 6           opportunity.

 7                  The state can tap that opportunity, 

 8           not by cutting home care workforce funding, 

 9           but by expanding such funding through, for 

10           instance, Empire State Development and REDCs.  

11           What would be most impactful, though, is the 

12           type of broad investment examined in our 

13           study, or proposed by legislation like the 

14           Fair Pay for Home Care bill forthcoming.

15                  Yes, challenging unless there's new 

16           revenue, but eminently safe as an investment, 

17           and one that's necessary to meet the needs of 

18           aging New Yorkers and their families.

19                  Thank you very much.

20                  CHAIRWOMAN KRUEGER:  Thank you.

21                  And next, Beth Starks from Chautauqua 

22           Lake Child Care Center.

23                  MS. STARKS:  Hi.  Good afternoon.

24                  I'm the founder and executive director 


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 1           of Chautauqua Lake Child Care Center and 

 2           assistant professor and early childhood 

 3           coordinator at Jamestown Community College.  

 4           I'm proud to serve on both the Governor's 

 5           Early Childhood Advisory Council and the 

 6           Child Care Availability Task Force. 

 7                  I come to you today to speak about 

 8           childcare as a business, speaking on behalf 

 9           of my colleagues, childcare providers in 

10           centers, in-home facilities and school-age 

11           programs.  I thank the chairs and members of 

12           the respective committees for the opportunity 

13           to testify on the budget.  I appreciate your 

14           recognition that it is imperative that 

15           childcare as an industry is included in this 

16           hearing, as it is foundationally 

17           interconnected to business and economic 

18           development, especially now.

19                  Childcare is a multi-billion-dollar 

20           industry employing tens of thousands of 

21           New Yorkers, with a return on investment of 

22           $1.86 for every dollar invested.  That's more 

23           than retail, manufacturing and construction.  

24           Yet childcare is a service industry that is 


                                                                   333

 1           different from others because it also enables 

 2           other businesses to operate.

 3                  Childcare was in a crisis situation, 

 4           preventing people from going to work 

 5           pre-COVID.  High-quality childcare is very 

 6           difficult to find -- 64 percent of 

 7           New Yorkers live in a childcare desert -- and 

 8           prohibitively expensive for nearly all 

 9           families.

10                  On the other side, childcare is an 

11           industry with tightly balanced budgets and 

12           low pay for employees.  In the past year the 

13           situation has gotten much worse.  With 

14           increased expenses and restrictions, many of 

15           my colleagues have closed their doors.  

16           Record numbers of women have left the 

17           workforce, citing childcare as the main 

18           factor, resulting in reduced labor force 

19           participation and reduced family income.

20                  Employers indicate childcare is one of 

21           the main problems with employee recruitment, 

22           retention and productivity.  

23                  And although childcare has remained 

24           open throughout the pandemic, it has a 


                                                                   334

 1           crumbling infrastructure and little support.  

 2           Despite the fact that we received 

 3           $164 million in New York State specifically 

 4           for childcare in CARES act funding 10 months 

 5           ago, only $40 million has actually been 

 6           spent.  And beyond that, there has been no 

 7           help directly to childcare facilities in 

 8           New York State.

 9                  Therefore, I encourage you to follow 

10           and implement the New York State Child Care 

11           Availability Task Force recommendations, 

12           leveraging REDCs and private/public 

13           partnerships, and to ensure the $468 million 

14           in new childcare stimulus funds is used 

15           swifly and strategically.  

16                  Further, I urge you to invest in 

17           childcare subsidies and to maximize 

18           affordability, and to increase childcare 

19           availability by investing in startup grants.

20                  Lastly, I urge you to support the 

21           increase in employer childcare tax credits 

22           and to revise them to ensure that businesses 

23           can take advantage.  We cannot look at 

24           supporting childcare as a subsidy.  It is 


                                                                   335

 1           truly an investment in economic development 

 2           and infrastructure.  We cannot rebuild our 

 3           economy without that investment.  We must 

 4           make decisions based upon what is best for 

 5           our youngest citizens and therefore our 

 6           entire population.

 7                  I offer to you my assistance and I 

 8           appreciate the support of my legislators, 

 9           Senator Borrello and Assemblyman Goodell, as 

10           well as the leadership of Assemblyman Hevesi 

11           and Senator Brisport and their committees as 

12           we work together to ensure that families, 

13           providers and businesses are heard.  We all 

14           need to work together to make New York State 

15           the leader in early childhood during this 

16           time and in the future.

17                  CHAIRWOMAN KRUEGER:  Thank you.

18                  Oh, and I see a hand.  I haven't seen 

19           hands in a while.  I see the hand of my 

20           Finance ranker Tom O'Mara.

21                  Come off mute.  There you go.

22                  SENATOR O'MARA:  Thank you.  Thank 

23           you, Chairwoman Krueger.  I have a question 

24           for Beth Starks on childcare.


                                                                   336

 1                  First of all, Senator Borrello sends 

 2           his regards and apologizes that he --

 3                  (Zoom interruption.)

 4                  CHAIRWOMAN KRUEGER:  Would everybody 

 5           else mute, please.  I think it's you, Kevin.  

 6           Turn your mute on.

 7                  Okay.  So go ahead, Tom. 

 8                  SENATOR O'MARA:  Okay.  Sorry about 

 9           that.

10                  George Borrello says hello, in short.  

11           He had a couple of questions.  He's preparing 

12           for session and couldn't be on this part of 

13           the hearing today.  

14                  So with regards to your position on 

15           the Child Care Availability Task Force, there 

16           was a report due from that task force in 

17           December.  We're on Albany time, so it's only 

18           February, so it's not really late yet.  But 

19           when do you expect the work on that report to 

20           be completed and that to be available for us 

21           in the Legislature?

22                  MS. STARKS:  So I was part of the 

23           drafting team, and the draft was put forward 

24           and has been approved by all members of the 


                                                                   337

 1           task force.  We're just waiting for the 

 2           official release of the report.  We were 

 3           hoping that that release would come in 

 4           December so that you could use it to look at 

 5           those recommendations as you put forward the 

 6           budget.  Unfortunately, it hasn't been 

 7           officially released yet.

 8                  SENATOR O'MARA:  Who has the final 

 9           sign-off on that report?

10                  MS. STARKS:  I believe it's the 

11           Governor's office.

12                  SENATOR O'MARA:  Okay.  You're 

13           probably right.  And it would be nice to be 

14           able to have that useful information for our 

15           budget discussions on that.

16                  What is your understanding of the 

17           status of federal CARES Act money that has 

18           come to the state and hasn't been 

19           distributed, and what do you expect to get, 

20           the state to get in addition to that moving 

21           forward from the federal government?

22                  MS. STARKS:  Well, it's been really 

23           unfortunate that the money that we received 

24           10 months ago in emergency funding has taken 


                                                                   338

 1           so long to make it into the hands of 

 2           providers and families.  And when asked at 

 3           the hearing last week and the answer was 

 4           $40 million was the amount that was spent out 

 5           of $169 million, that was really 

 6           disheartening.

 7                  We do know that an additional almost 

 8           half a billion will be coming for certain 

 9           into New York State, and we are hopeful that 

10           that money will be used more swiftly and will 

11           actually make it to providers in a timely 

12           manner.  We would love your support on that.

13                  SENATOR O'MARA:  Well, I can tell you 

14           that you absolutely have it from myself and 

15           from Senator Borrello as well.  

16                  So thank you for your testimony today.

17                  MS. STARKS:  Thank you.

18                  CHAIRWOMAN KRUEGER:  Thank you.

19                  Assembly?

20                  ASSEMBLYMAN CAHILL:  Yes, thank you, 

21           Madam Chair.  I'd like to recognize 

22           Assemblywoman Lunsford for three minutes.

23                  Assemblywoman Lunsford, unmute if you 

24           can.


                                                                   339

 1                  ASSEMBLYWOMAN LUNSFORD:  Hello.  Do 

 2           you have me?

 3                  All right, sorry.  I was waiting for 

 4           someone to prompt me to get it done.

 5                  This question is also for Beth Starks.  

 6           Thank you very much, Beth, for your 

 7           presentation.

 8                  Given what you learned as part of the 

 9           task force drafting team -- I know the 

10           report's not officially out yet, but if you 

11           could guide us through what you think the 

12           best uses for some of the federal monies we 

13           are going to receive would be to help bolster 

14           our childcare system moving forward, as well 

15           as dealing with the ramifications of COVID.

16                  MS. STARKS:  I think it's really 

17           important that we support both families and 

18           providers.  So we need to get people back to 

19           work, so it's really important that we 

20           increase the income eligibility for the 

21           childcare subsidies so that working families 

22           can use those subsidies to make sure that 

23           they can keep their employment right now, get 

24           back to work if they're not working, and to 


                                                                   340

 1           make sure that we're supporting them.

 2                  In addition, we need to support the 

 3           providers.  So that means consistent revenue 

 4           streams -- so paying for absences, making 

 5           sure that we are contributing to helping them 

 6           to pay their employees more, and to also 

 7           bridging that gap in the -- a lot of the 

 8           childcare centers stayed open this entire 

 9           time and lost a lot of revenue, so they're 

10           really suffering economically right now.  And 

11           so making sure that they stay open to support 

12           people going to work is really important 

13           right now as well.

14                  ASSEMBLYWOMAN LUNSFORD:  And I've 

15           heard that there have been some technological 

16           challenges with regards to our childcare 

17           centers actually applying for funding.  Can 

18           you speak to that and what we can do moving 

19           forward to help them actually get this money 

20           in their hands?

21                  MS. STARKS:  Yeah, so I think it's a 

22           combination.  There are a lot of in-home 

23           providers and centers who lack the ability to 

24           be able to access those funds and apply for 


                                                                   341

 1           them and to understand exactly what they 

 2           needed to do to apply for the funding.

 3                  In addition, there was definitely -- 

 4           on behalf of the state, it's an arduous 

 5           process.  And so it wasn't made easy for any 

 6           providers to be able to get that funding.  

 7           There were a lot of hoops to jump through, 

 8           and I think that's led to the money taking so 

 9           long to get out the door.  And what was meant 

10           to be emergency funding was certainly not 

11           timely.

12                  ASSEMBLYWOMAN LUNSFORD:  And kind of 

13           the buckets we've put the CARES Act funding 

14           into, do you think that's the most helpful 

15           way we could be boosting our childcare 

16           providers right now, the kinds of funding 

17           that they can apply for under our current 

18           system?

19                  MS. STARKS:  I do.  And I do think 

20           that it's really important that we listen to 

21           the current providers about the struggles 

22           that they had obtaining the funding in the 

23           first round -- and also to see what their 

24           immediate needs are moving forward.  That 


                                                                   342

 1           stuff is really integral right now.

 2                  ASSEMBLYWOMAN LUNSFORD:  Thank you so 

 3           much, Beth.  We appreciate your time.

 4                  MS. STARKS:  Thank you.

 5                  CHAIRWOMAN KRUEGER:  I think we were 

 6           both muted, Kevin, but I think you wanted to 

 7           call on Sarah Clark next?

 8                  ASSEMBLYMAN CAHILL:  I'm muted, you're 

 9           right, Liz.

10                  CHAIRWOMAN KRUEGER:  (Laughing.)  I 

11           was too.

12                  ASSEMBLYMAN CAHILL:  Assemblywoman 

13           Sarah Clark for three minutes.

14                  ASSEMBLYWOMAN CLARK:  Wonderful.  My 

15           question is also for Beth.

16                  Thank you so much.  So good to see you 

17           again today.  And I couldn't agree more with 

18           you about the importance of childcare.  It is 

19           literally the bedrock of any workforce 

20           development, any economic development, and 

21           any way that we're going to be able to 

22           recover from COVID.

23                  I also wanted -- but I wanted to ask, 

24           I read a report about the subsidy system, 


                                                                   343

 1           particularly around what you -- you sort of 

 2           went into deserts and how there's not a lot 

 3           of access everywhere in the state evenly.  

 4           But what I was looking at was the subsidy 

 5           report, of where subsidies are most used 

 6           across the state, and I really saw a glaring 

 7           difference between our cities and our rural 

 8           areas.

 9                  I was wondering if you have any 

10           thoughts about what the particular challenges 

11           are in our rural areas when it comes to 

12           childcare, and how we could do a better job.

13                  MS. STARKS:  One thing that I know -- 

14           so here in Chautauqua County we are not using 

15           all of our subsidy dollars.  And we 

16           brainstormed about the reason or potential 

17           reason for that, and one of the things that I 

18           think is really important is letting people 

19           know that that assistance exists. 

20                  And so when you think about HEAP or 

21           WIC or other forms of assistance, we get the 

22           word out and we let people know that it's 

23           available.  And if we want people to work and 

24           childcare is one of those obstacles standing 


                                                                   344

 1           in their way to working every day, we need to 

 2           let them know that this is -- maybe unlike 

 3           other forms of assistance, it's meant for 

 4           people who are working and who have -- 

 5           instead of falling off the benefits cliff, 

 6           that -- if we can help them a little bit 

 7           longer with the childcare and then get the 

 8           word out.  

 9                  In addition, depending on the county 

10           that you're in, it's really a complicated 

11           process.  So here in Chautauqua County 

12           there's 11 different documents, forms of 

13           documentation that they need to turn in.  And 

14           they have to turn it all in by mail, not 

15           electronically.  

16                  And so there are a lot of steps that 

17           we could take to make it easier for families 

18           to be able to apply and to be able to get to 

19           work.

20                  ASSEMBLYWOMAN CLARK:  Well, it sounds 

21           like you have some great ideas, and I'm ready 

22           to work with you to help make that happen.

23                  Thank you.

24                  MS. STARKS:  Thank you very much for 


                                                                   345

 1           your support.

 2                  CHAIRWOMAN KRUEGER:  Thank you very 

 3           much.

 4                  ASSEMBLYMAN CAHILL:  Back to you, Liz.

 5                  CHAIRWOMAN KRUEGER:  Thank you.  Thank 

 6           you very much, Assemblymember.  

 7                  So I think all hands are down.  I want 

 8           to thank this panel for being our last panel 

 9           in this hearing.  Appreciate all of your 

10           contributions today, everyone who came to 

11           testify.

12                  This will be the official end of the 

13           Economic Development hearing.  And for those 

14           who have been hoping for the Tax hearing, 

15           give us 10 minutes and we will start the 

16           Tax hearing.  And I believe that will require 

17           everyone to come off of this Zoom and to 

18           reenter the Tax hearing Zoom.

19                  So see some of you again in just a few 

20           minutes.  And the rest of you, enjoy the rest 

21           of your day.  Thank you.

22                  (Whereupon, the budget hearing 

23           concluded at 3:08 p.m.)

24