What’s in a name? Not much.
It’s easy to tinker with a troubled job-creation program and slap a new label on it. But in the case of Start-Up NY, the cosmetic fixes aren’t going to fix anything.
Under Gov. Andrew Cuomo’s proposal, Start-Up NY would be renamed the Excelsior Business Program. It would continue to give a 10-year break on state and local taxes to fledgling businesses often based on or near college campuses. Unfortunately, Cuomo also would ease the program’s rules, requiring companies to create just one job over five years. And he would loosen required reporting from quarterly to annually.
Those that create five jobs in five years would get an additional tax credit, a grant, since they would not be paying taxes. In reality, all any of this would do is incentivize companies to stay stagnant and still pay nothing at all.
In NYC, Start-Up NY operates tax free zones connected to the City University of New York, New York University, Downstate Medical Center and SUNY Maritime College.
Officials with Empire State Development, the state’s primary business-aid agency, said the proposed revamp is based on feedback from businesses. No wonder the rules got easier.
As of July, Start-Up NY had created just 408 jobs since 2014. But state officials argue that the tax breaks are small, saying that if just one business can become the next great thing, it’ll be worth it. But in that assessment, they ignore the tens of millions of dollars the state has spent on marketing the program, and don’t adequately explain the lowest of expectations.
Lower standards will lower job creation. It should be the reverse. Reporting requirements should be strengthened so the public can determine whether the program is worth it. And one set of standards and incentives for companies that all have different needs isn’t the answer.
State officials should start over. Reconsider the economic development strategy. Startups should be encouraged, but in a way that leads to real job creation and economic growth.