New York State Comptroller Thomas P. DiNapoli today released a profile of the Empire State Development Corp. (ESDC) that found there is minimal financial information for many of its 168 subsidiaries and limited public reporting on results of the economic development initiatives around the state.

“New York state spends hundreds of millions of dollars each year to spur economic development and job creation through ESDC programs,”DiNapoli said. “New Yorkers deserve more thorough accounting about whether these programs are achieving desired results.”

This report is part of the Comptroller’s efforts to promote transparency on government spending, including how funds are used for state and local economic development programs. DiNapoli’s office is also currently auditing ESDC’s oversight of the vendor responsible for promoting certain state economic development programs. 

The analysis examines ESDC’s revenues, expenditures, debt, procurement and employment, as well as accountability and transparency in its operations.

For fiscal year (FY) 2013, ESDC reported that its programs helped create 2,424 jobs, a figure representing approximately 1.8 percent of net private-sector job creation in the state during the year. But the authority makes little public assessment of whether its programs work effectively together or create well-paying jobs. The report suggests developing more detailed and consistent public reporting for each program.

In addition to economic development, ESDC serves as a financing vehicle for the state. Its outstanding debt totaled more than $10.7 billion for the fiscal year ending on March 31, 2014, an increase of 20 percent over FY 2013. Most of the agency’s debt total is considered “backdoor borrowing,”which has been done on behalf of the state without voter approval. As noted in DiNapoli’s report, there is an increasing reliance by the state on ESDC to issue debt to fund a broader scope of projects including highways, correctional and youth facilities, and to refund debt of other authorities.

Interest and other expenses associated with ESDC’s outstanding revenue and corporate debt and loans totaled $468 million, or 37 percent, of ESDC’s $1.3 billion in expenditures for 2014. Economic development grants represented 45 percent of the total. This total does not reflect the value of tax credits and certain other tax benefits associated with some of its programs.

ESDC reported 290 full-time and part-time employees at various locations, with total annual compensation of $20.7 million. As of FY 2014, nearly 57 percent of ESDC’s reported employees were classified in a management role and 23 percent of all ESDC employees received total compensation of $100,000 or more.

Since its establishment in 1968 as the Urban Development Corporation (UDC), ESDC has created more than 200 subsidiary corporations and other entities. Recent audits have found that ESDC did not adequately oversee the status of many of its subsidiaries and rarely dissolved such entities once their purpose had been achieved. Currently, it lists 168 subsidiaries, which represents 73 percent of all public authority subsidiaries.

ESDC has three main offices in Albany, Buffalo and New York City, in addition to 10 regional offices around the state. ESDC reported offices in the United Kingdom, Israel and South Africa in 2014, and as of January 2015, listed additional offices in China, Canada and Mexico on its website.

The report is based on data submitted by ESDC to the Office of the State Comptroller, primarily through the Public Authorities Reporting Information System (PARIS). The information and numbers are self-reported by ESDC.

For a copy of the report, visit: Public Authorities by the Numbers: Empire State Development Corp.