State ‘promotional’ spending deserves close look: Editorial
Mar 14, 2018
OK, so this is not the worst job-creation idea ever devised by the state: Give solid tax breaks to start-up companies and others willing to make a go of it near education centers.
The SUNY system is an upstate powerhouse, and if all that energy can be leveraged to grow businesses nearby, it could keep more young people in New York — it could stop the so-called “brain drain” that is crushing the Empire State, especially upstate.
But the results have been slow to materialize, and the state has spent eye-popping sums on the effort.
In fact, critics rightly roil over the notion the state has spent tens of millions of dollars promoting economic development in general and the so-called “Start-Up NY” plan, which produced slightly over a 1,000 jobs in the first three years, though businesses in the program have pledged to add a few thousand more within the next two years.
Unquestionably, the promotional spending should be reduced this year, for a variety of reasons. For starters, the return on investment has been pathetic. For another, this is an election year, and Gov. Andrew Cuomo, a powerful incumbent with about a $30 million campaign war chest, clearly benefits from these ads. Though he is not mentioned or shown in them, the ads do run all across New York and in other parts of the country, touting the state as “Open for Business.” Cuomo is seeking a third term as governor in November and is a potential 2020 presidential candidate. One could easily argue the ads have done more to promote the governor and his administration than they have to bring companies to New York — or see others expand.
The legislature has shown great patience with the Start-Up program in particular. It has had chances to scrap the initiative but has decided instead to extend it, giving those in charge of the program at the Empire State Development Authority more time to produce better results. Under Start-Up NY, companies in the zone pay no state and local taxes for up to 10 years, and their new employees pay no state income taxes for as long as 10 years. But state Comptroller Thomas DiNapoli and others have criticized the lack of transparency, pointing out where reporting requirements have been missed and questioning whether information released about the companies goes far enough.
That, too, deserves a deeper look as Cuomo and state legislative leaders work on a budget agreement, with the deadline a few weeks away, that will decide how much funding goes into these promotional efforts that — at least in some instances — have produced paltry results.