spending

ALBANY — The state’s top court threw out a lawsuit today that would have upended the way New York funds economic development projects. In a 5-to-2 ruling issued this morning, the Court of Appeals reaffirmed the state’s right to transfer funds to “public-benefit corporations,” which then take the money and offer it to private businesses in the form of grants and tax incentives. The state’s main economic-development branch is the Empire State Development Corp., which is technically independent of the government and therefore isn’t bound by a constitutional ban on giving state money to private entities, the court found. Although some “may question the wisdom of policy choices,” the court found “no constitutional infirmity to the challenged appropriations,” according to the majority opinion. A Niagara County businessman and 49 other generally conservative taxpayers originally filed the lawsuit in state Supreme Court in 2009. The group alleged that grants doled out by the Empire State Development Corp. and other public-benefit corporations violated Article VII of the New York state Constitution, which prohibits state money from being “given or loaned to or in aid of any private corporation or association.” A state Supreme Court judge had ruled to dismiss the lawsuit, but the Appellate Division reversed the ruling last year. Today’s ruling upheld the Supreme Court judge’s original decision. JCAMPBELL1@Gannett.com