Empire State Development (ESD) gave out some awards yesterday. Nothing big. About $160,000 per award. In press release-speak the money is meant to "expand production and increase productivity through enhanced environmental performance."
We get this story all the time: private business buoyed by public investment. It's an inescapable part of how business and government operates.
As such, we think it's an important thing to understand. Because if you're going to moan about Tax Payer Dollars, it's always good to try to figure out how they work.
So here's the math on the Environmental Investment Program (EIP) awards.
Three upstate businesses won EIP awards. Two are for companies that are working on specific projects.
- American Aerogel in Rochester got $186,410 for developing energy-saving insulation for refrigerated trailer trucks.
- Delta Hardwood Flooring near tiny Ava, N.Y. got $120,000 to reduce wood waste in their production process.
The other award is for High Tech Rochester, a non-profit economic development organization. They got $175,000 for helping out manufacturers in the Rochester area with "enhanced environmental performance."
So that's $481,410 going from state coffers to local businesses. But where exactly does that money come from? Who pays?
In this case it's the Environmental Protection Fund (EPF), which was was set up in 1993 to cover a wide range of environmental issues. (It's currently funded at $134 million, down significantly due to recent budget cuts.) To get all alphabet soup on you, the money for EIP comes from EPF.
The majority of the money in the EPF comes from the real estate transfer tax: that's the tax you pay when you sell or transfer property within the state of New York.
So in a roundabout way, anyone who's recently sold a home in New York State is partially financing a new insulation product and "a new optimizing scanner" for making hardwood flooring. And some consulting.
These awards are mini. But it's funding mechanisms like them that prop up the proclamation atop ESD's website: New York is Open for Business.
In no small part, this is your innovation economy.
