ALBANY — A job-creation program highly touted by Gov. Andrew Cuomo’s administration created just 408 new jobs in its first two full years, despite an advertising campaign that cost state taxpayers tens of millions of dollars.
Businesses participating in the state’s Start-Up NY program created 332 jobs in 2015 after creating 76 in 2014, according to a new state report.
The report from Empire State Development, the Cuomo administration’s economic-development branch, was released Friday evening ahead of the holiday weekend, a time notorious for government agencies to release unflattering news.
It was more than 90 days late: By law, the report was due March 31.
Leslie Whatley, executive vice president for Start-Up NY, said the report shows the program has “momentum.” She said the report was late in part because some companies submitted inaccurate or late data.
“The first year of the program, we were building it,” said Whatley, who is leaving the program next week. “Now we’ve got momentum and there’s going to be a lot more jobs coming in this year. I mean, we’re building up steam.”
Start-Up NY allows new and growing businesses to avoid paying state and local taxes for 10 years if they locate in specific zones in New York at various public and private college campuses and properties.
The Rochester region gained 69 jobs in 2015 through the controversial program.
In the Finger Lakes, startups occupy space at places such as the University of Rochester, Finger Lakes Community College, Rochester Institute of Technology, Keuka College and The College at Brockport.
In the Finger Lakes region, 12 companies occupy Start-Up NY spaces — including Datto, Darkwind Media and PharmAdva. According to Friday’s report, Start-Up NY companies around Rochester received almost $131,000 in tax breaks in 2015 from the state.
For job growth, Datto led the way for local startups, creating 39 jobs last year. Behind Datto, ClearCove Systems created 10 in 2015. ClearCove Systems is slated to receive a state investment of $3.89 million.
Three local startups, however, did not create jobs in 2015 — Dogways, Temida and Darkwind Media.
In some regions, the report showed few results in the first two years, including the Southern Tier, which saw nine companies in the Start-Up program create seven jobs. The six Start-Up companies at Binghamton University combined to create a single job in 2015.
In the mid-Hudson region, which stretches from Westchester County north to Sullivan County, Start-Up businesses created five jobs last year — all in Kingston.
The state has spent tens of millions of dollars promoting the program, including $53 million from late 2013 to early 2015. The bulk of that cost was spent on seemingly ubiquitous television advertisements.
After two full years, the program has created more tax-free areas across the state (441) than jobs, according to the report.
So far, 159 companies have been approved for the program, including 102 that are new businesses. Together, they invested $11.4 million in New York in 2015 and received $1.2 million in tax benefits.
The report does little to tout the Start-Up program’s current job-creation results, putting the number of jobs created last year into a footnote while choosing instead to tout the companies’ five-year projections. The companies have “committed to creating over 4,100 jobs” in their first five years, according to the report.
Empire State Development also chose to mix the Start-Up report — which is mandated by law — into a broader report examining several state economic-development programs, including the Buffalo Billion and the Excelsior Jobs Program.
Ken Girardin, communications manager for the Empire Center, a fiscally conservative think tank, said the figures in the Start-Up report are the “clearest evidence to date that the state’s business climate isn’t only being hindered by high taxes.”
“Start-Up NY was supposed to be a silver bullet, but instead it’s just been a shiny object that’s distracted state lawmakers from making the necessary changes to make the state truly attractive to business,” Girardin said.
Whatley said next year’s report will show significant growth in the Southern Tier and mid-Hudson regions, particularly at Binghamton University and in Rockland County.
© 2016 Gannett News Service
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