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Lawmakers: Close Start-Up NY program to new applicants

Gov. Andrew M. Cuomo, seen speaking on the

Gov. Andrew M. Cuomo, seen speaking on the tax-free zones program in 2013, when it was launched, wants to change Start-Up NY's name and, in some cases, lower the threshold to qualify for tax breaks. Credit: Ed Betz

State lawmakers this week pushed back against Gov. Andrew M. Cuomo’s plan to loosen job creation requirements for Start-Up NY, demanding that the program’s tax-free zones be closed to new entrants next year.

Start-Up NY should stop enrolling businesses as of April 1, 2018, and then the program’s effectiveness should be assessed, Republicans and the Independent Democratic Conference in the State Senate said Wednesday in their respective budget resolutions. Together, they hold a large majority in the chamber.

The Assembly’s Democratic majority also opposes Cuomo’s plan, which would revamp and rename Start-Up NY as the Excelsior Business Program.

In his proposed 2017-18 budget, Cuomo asked lawmakers to approve the change, which incorporates many aspects of Start-Up NY but also gives participating companies more time to meet employment promises.

In some cases, the threshold to qualify for tax breaks would be lower than it is now. For example, a business would only have to hire one person over five years to receive aid.

Start-Up NY participants pay no state and local taxes for up to 10 years and their new employees are exempt from paying state income taxes for as long as 10 years. There are 22 participants on Long Island — most at Stony Brook University — that together have promised to create 260 jobs.

Start-Up NY has drawn fire because the state spent $53 million on advertising but only 408 jobs were created in the program’s first two years.

In addition, the Senate and Assembly majorities are taking aim at the Regional Economic Development Councils established by Cuomo in 2011 to help distribute state business aid.

Budget resolutions adopted by both houses Wednesday call for “more transparency . . . to further ensure accountability and prevent conflicts of interest in the awarding of billions of dollars.”

Last month lawmakers accused the councils of “cronyism” because projects with ties to council members have received state aid.

Howard Zemsky, president of Empire State Development, the state’s primary business-aid agency, has said council members recuse themselves from votes on projects to which they have ties.

At least six of the Long Island council’s current members have ties to projects that received state funding after being endorsed by the council, state records show.

Cuomo and lawmakers face an April 1 deadline to adopt a new state budget.

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