Gov. Andrew M. Cuomo defended his Start-Up NY program of tax-free zones for businesses, saying the two-year program hasn’t cost the state much and will take time to create a lot of jobs.
“We just started the program and when a company agrees to come, it doesn’t happen tomorrow,” he told reporters in upstate Plattsburgh on Wednesday. “So, there is a lag time, but it costs us nothing.”
Cuomo was responding to the findings of an annual progress report released by his administration late on July 1. The report showed Start-Up NY created 332 jobs last year, including 34 on Long Island.
The program was Cuomo’s idea and created 76 jobs across the state in 2014, its first year. Four of those jobs were in Nassau and Suffolk counties.
Under Start-Up NY, participating companies agree to locate on college campuses and create jobs. In return, they don’t have to pay state and local taxes for up to 10 years. Their employees don’t pay state income taxes for as long as 10 years.
The report showed that the 159 businesses in the program as of Dec. 31, 2015 saved $1.2 million last year, principally on payroll taxes.
Empire State Development, the state’s primary business-aid agency, spent $53 million on advertising, including television commercials, to promote Start-Up NY from October 2013 through spring 2015, according to an agency spokesman.
However, Cuomo said Wednesday that the ads were about more than one program. “The advertising was generic. . . . We had a bad reputation [for being a high-tax state] that we had to correct to even be considered and the Start-Up ads are really generic. Start-Up means ‘come to New York and we will help you start up your business.’ ”
The ads provided details of how business could participate in the Start-Up NY tax-free zones program and what the benefits are.
After Friday’s report, critics of Start-Up NY, such as the union-backed Fiscal Policy Institute, called for the program to be shut down. “The program has spent tens of millions on advertising . . . and has only created an anemic 332 jobs,” said Ron Deutsch, the institute’s executive director. “I don’t think we can consider this a success by any measure.”