Albany politicians and policy advocates say Gov. Andrew Cuomo’s Start-Up NY program is off to a slow start, based on the first report released last week, just hours after the state budget was approved.
Start-Up NY allows businesses to operate tax free for 10 years by expanding or relocating to select areas near university campuses. The program is meant to offset New York’s high taxes.
In 2014, Start-Up NY yielded just 76 new jobs. Of the 80 companies approved as of January 2015, 30 have moved into the tax-free areas, investing $1.68 million and using $56,560 in tax breaks.
The report said the first year is “building a strong foundation and momentum for the program to succeed now and for years to come.” Looking at 2014 alone, 54 companies were approved. Those companies have a 5-year commitment to create 2,085 jobs and invest $91.3 million.
Assemblyman Steven McLaughlin, a Republican representing parts of Rensselaer, Columbia and Washington counties, said the amount of interest is “dismally low” compared to the money spent. The state has spent about $53 million in advertising for the program so far, with $50 million allotted in the 2015-16 budget.
“For a program that this many millions were spent advertising and the most we got was 90 companies [that applied], and of that, some of them bailed,” McLaughlin said. “Even with the massive amount of ads, business owners are generally smart and recognize that even with this program [New York is] a harsh place to do business.”
One of the area businesses selected for the program, Classbooks.com, moved from McLaughlin’s Assembly district in Rensselaer County across the river to Albany.
E.J. McMahon, president of the Empire Center for Public Policy, a conservative think tank, said it is not surprising the program has not attracted more applicants. He said it is a niche program that’s being advertised as a broad-based development program.
“Someone needs to point out that the vast number of startups fail,” McMahon said. “Most of the businesses in this are not startups, but expansions.”
© 2015 Albany Business Review
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