This month I learned why I was tired of watching every night Start-Up NY television commercials: Gov. Cuomo has spent a whopping $50 million of our tax dollars to fund the ad campaign.
At, say, $500 a pop, that’s 100,000 commercial runs.
As for the return on the $50 million investment, it was worse than I could have ever imagined.
Since the governor commenced the project in 2013, only 408 jobs have been created at a cost of $122,549 per position.
The dismal results explain why the official deadline for releasing the results of the economic-development initiative was delayed for three months and disclosed on the Friday of the July 4th weekend without a self-congratulatory press release.
Despite all the marketing hype and the annual claim of the programs overseer — the Empire State Development Corporation — that the initiative has momentum and is an economic game changer, Start-Up NY has been a flop.
In my judgment, Start-Up NY, which grants ten years of no taxes to approved technology companies that locate in zones close to state and city university campuses, and “support the academic mission of the college or university with which they hope to work,” was condemned to failure from the get-go.
The program’s scope is too limited, there’s no regulatory relief, and interested companies must endure a laborious application process and must place their fate in the hands of ESDC bureaucrats.
Let’s face it — government pencil-pushers are not known to be savvy economic prognosticators. (The Solyndra disaster that cost U.S. taxpayers $500 million comes to mind.)
I certainly would not trust them with investing the assets in my 401(k).
Dealing with bureaucrats may help explain why some approved companies have dropped out of the program.
The Albany think tank, The Empire Center, pointed out in a recent report that “fifteen of the 54 companies named in the 2014 Start-Up report … were no longer part of the program by the end of 2015. And two companies that have publicly stated their intention to withdraw from Start-Up, Adirondack Operations and Royal Meadery, were counted in [July’s] report … and toward the program’s job commitments.”
Start-Up NY is not the governor’s only economic initiative that’s in trouble.
His “Buffalo Billion” investment, which he boasted will “create thousands of jobs and spur billions in new investment and economic activity,” has stalled.
There are project cash-flow problems and investors are pulling out due to the U.S. Attorney’s corruption probe.
And then the Office of the State Comptroller dropped a bomb in July on the governor’s Excelsior Program which grants refundable tax credits to targeted businesses that agree to make capital investments that create a specific number of new jobs.
State Comptroller DiNapoli’s audit found that ESDC “the entity in charge of doling out millions of dollars in tax credits to companies that pledge to expand in New York State, could not verify that many of the companies participating in the Excelsior Jobs Programs met their obligations or even justify giving the businesses tax breaks in the first place.”
The auditors discovered that there were problems ranging “from lowering job creation goals after companies did not meet expectations to not verifying if jobs were full-time or part-time. ESDC also could not produce evidence that several companies actually created jobs and did not simply shift jobs.”
The failure of Cuomo’s targeted incentive programs prove Big Brother-type government bureaucrats should be the last persons to dictate where entrepreneurs should locate and risk their investment dollars.
To jump-start New York’s economic engine, Gov. Cuomo should employ genuine incentives—tax cuts and regulatory reforms — that have created lasting middle class jobs in flourishing states like Texas, Florida and South Carolina.
