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Lawmakers: Start-Up NY jobs cost $130,000 each in ad spending

Howard Zemsky, Gov. Andrew M. Cuomo's economic development

Howard Zemsky, Gov. Andrew M. Cuomo's economic development czar, is seen in this undated photo. Credit: Newsday / Thomas A. Ferrara

A bipartisan group of state lawmakers yesterday criticized as costly and ineffective Gov. Andrew M. Cuomo’s Start-Up NY program of tax-free zones on college campuses for expanding businesses.

At a hearing in Albany, Assemb. Raymond Walter said the state had spent $130,000 on advertising for every job created by the program in its first two years.

Ads, including television commercials, have cost $53 million. Start-Up NY participants have hired 408 people, according to state reports.

“When we talk about the amount we’ve spent on marketing . . . [and] you break that down on a per-job basis, it’s nowhere near cost-effective at this point,” said Walter, a Republican from the Buffalo suburb of East Amherst.

Assemb. Addie J. Russell, a Democrat from upstate Theresa, said Start-Up NY needs to be “significantly revamped” after producing “paltry” employment numbers.

Cuomo’s economic development czar, Howard Zemsky, disagreed, saying lawmakers were being “too shortsighted” about an “excellent program that is both innovative and cost-effective.”

He said Start-Up NY costs, excluding ad expenditures, were a few thousand dollars for each job created since 2013. Later, his spokesman said the program’s per-job cost was $3,050.

Zemsky also said Start-Up NY participants have spent $45 million on employee salaries and equipment expenditures in the past two years, nearly enough to cover the advertising expenses from October 2013 through spring 2015.

“I’m interested in looking forward,” he said during two hours of testimony before the Assembly’s economic development committee.

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.

As of December, 159 businesses were in the program, including 19 on Long Island — the second most in the state after Buffalo.

The businesses and their employees saved $1.2 million on taxes last year; $122,250 locally. They invested $11.4 million in equipment and facilities, including $475,000 in Nassau and Suffolk counties.

Locally, 34 jobs were created in 2015 and four in 2014.

These statistics were in a progress report to the State Legislature that was delivered 90 days late on the Friday before the July 4 holiday.

At yesterday’s oversight hearing, Assemb. Robin Schim minger, the committee chairman, said the Cuomo administration lacks transparency.

The Democrat from the Buffalo suburb of Kenmore alleged some of the Start-Up NY employment numbers were wrong: “We believe in accuracy and transparency.”

Zemsky responded, “I don’t acknowledge that there are any inaccurate numbers.”

However, he also downplayed Start-Up NY’s importance, saying it was “just one tool in the toolbox” and a “narrow program.”

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