9134352923_137dd4cc2a_z-e1467724916343-150x150-3320933The latest progress report from START-UP NY shows it’s losing participants almost as quickly as it’s adding them.

In an October 28 press release, Governor Cuomo reported: “START-UP NY now has commitments from 202 companies to create at least 4,490 new jobs and invest more than $251 million over the next three-to-five years throughout New York State.”

But that 4,490-job figure is a net increase of only 212 from the 4,278 commitments that were reported in December 2015. Since then, the governor’s office has twice announced additional commitments: 135 jobs in March and 817 jobs in October. So while the program added new commitments to create 952 jobs, its total count of five-year commitments rose by only 212, because 740 existing commitments were lost. This means that for every four jobs START-UP added since December, it lost three.

As explained here in July, START-UP appeared to have peaked during 2015, adding about 2,100 five-year job commitments in each of its full years of operation (calendar 2014 and 2015).

Unless the program adds 1,843 new commitments in the next two months—and doesn’t lose any commitments in the meantime—2016 will be the weakest year for START-UP since its creation.

The drop-offs wouldn’t be so surprising if the program actually was limited to genuine start-ups. Nationwide, nearly one-third of start-up firms failed between 2013 and 2015, according to the U.S. Small Business Administration. New York State has stretched START-UP’s eligibility to include existing companies, but the numbers still aren’t impressive.

Of the 39 companies listed in the October announcement, 16 are existing New York companies, and 7 are existing companies that are “new to New York.” Only 16 companies would fit any definition of true start-ups. The new companies are distributed across the state, with the biggest concentration—8 companies and 213 new jobs—located at University of Buffalo.

As Empire Center’s E.J. McMahon wrote a year ago, “few economic development initiatives in New York State’s history have been the subject of more marketing hype than START-UP NY.”  But a program of tax-free micro-zones on and near college campuses is nowhere near potent enough to overcome New York’s other competitive disadvantages, which the governor has compounded with policies including opposition to natural gas pipelines, a costly renewable energy mandate, and the nation’s highest minimum wage.

About the Author

Ken Girardin

Ken Girardin is the Empire Center’s Director of Strategic Initiatives.

Read more by Ken Girardin

You may also like

The post-pandemic comeback: how far are we from normal?

Now that the COVID-19 "emergency" is in the rearview mirror, how far is New York's economy from its pre-pandemic normal level? Read More

Remote Threat 

Remote work and a more mobile professional class will increase the speed and scope of New York's ongoing out migration. Read More

New York’s Medicaid Rolls Kept Pace with a Nationwide Surge During the Pandemic

New York's Medicaid and Child Health Plus programs added three-quarters of a million enrollees during the coronavirus pandemic, roughly matching the pace of a national surge in sign-ups. Read More

Through Q1, the post-pandemic income bounce was lower in NY than in most states

Personal income in New York bounced back more slowly than the national average during the first quarter of this year, according to new data Read More

At current pace, NY is still years away from pre-Covid payrolls peak

New York State's post-pandemic jobs recovery has come a long way—but still has far to go, according to the state employment report for May. Read More

Lawmakers Add to the High Cost of Health Insurance in New York with Tax Hikes and Mandates

State lawmakers ended their session by passing a flurry of bills making health insurance even less affordable. Read More

Record high public pension fund return won’t necessarily mean lower pension costs

The cost to taxpayers of New York's generous pension benefits for government employees depends largely on the performance of pension fund investments. Read More

Digging deeper on the (very deep) East Side Access project

Governor Cuomo held a press conference at Grand Central Terminal today to announce completion of construction work on the $11 billion East Side Access project, which for the first time will provide direct Long Island Railroad (LIRR) service to and from Gr Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!