One of the centerpieces of Governor Andrew Cuomo’s economic development plans has created just a small number of jobs so far, but the governor is urging patience.
The three month late progress report on the Start Up New York program was buried in a release on Friday evening before the July 4th holiday weekend. The announcement, quietly added to the Cuomo Administration’s economic development agency’s website, was in contrast to the beginning of the program, which was introduced by Governor Cuomo in 2014, with much fanfare. In June of that year, Cuomo, at the Rochester Institute of Technology, proudly announced the roll out of the first businesses to participate in a program that gives business entrepreneurs a 10 year pass on paying income, sales and property taxes. He called it the “ultimate” economic development program.
“We offer the least expensive locations in the county for business,” Cuomo said.
The governor also embarked on a $53 million dollar, publicly financed, multi media advertising campaign promoting Start Up, which aired nationwide.
The spending was questioned in a 2015 audit by the State Comptroller, who said the program left “real questions” about whether the results justify the cost of the ads.
And the new report, released on July 1st, seems to do little to answer those questions, reporting that a total of 408 jobs have been created in the first two years.
Cuomo, speaking at an event in Plattsburgh, downplayed the importance of Start Up, saying its “only one program” of many of New York’s economic development initiatives. And he urges patience.
“400 (jobs) have been created to date but 4100 are in the pipeline,” Cuomo said. “We just started the program, and when a company agrees to come, it doesn’t come tomorrow.”
And the governor says the ads, though branded as Start Up, actually had a broader message about New York’s attempts to create a more business friendly climate, and by that measure have been successful.
“We had a bad reputation that we had to correct to even be considered,” Cuomo said.
Ken Girardin, with the Empire Center, a watchdog think tank, says the Start Up program should be “scrapped”, and that the job creation levels may have already peaked.
“Their focus to date has been how can we bribe people to come here, how can we bribe people to stay here,” Girardin said. “That’s not how you build a successful economy.”
He says instead, New York should focus on reducing onerous business regulations and high costs of workers compensation insurance, among other things.
And Girardin says the claim that 4100 jobs will be created in the next four years assumes that all of the companies who are currently signed up will actually follow through and keep those commitments. He says one quarter of the companies listed as participating in the first year of the program had dropped out by year two, and the data for the firms listed in the second year of the program is incomplete. He says of 159 businesses listed in 2015, 50 have not even begun their operations.
Cuomo, speaking in Plattsburgh to reporters, admits that perhaps Start Up has not, after all been the perfect remedy.
“Because for most business, just saying you don’t have to pay taxes is not enough,” Cuomo said.
He says the state’s other economic development programs also offer incentives to businesses.
The head of Start Up, Leslie Whatley, leaves in a few days to take a new job in Connecticut. In a written statement she praised the program as “an innovative model of public-private-partnerships”
A spokesman for the Empire State Development Corporation, which oversees Start Up says more applications are coming in new companies will be announced soon.