Job Creation Folly!

In Columns by Hal PetersonLeave a Comment

On October 22, 2013, Governor Andrew M. Cuomo launched a “game-changing” initiative called “Start- Up-NY.” Considered then the most ambitious economic development program in recent history, the program established tax-free zones to attract and grow new businesses across the state creating an estimated 30,000 new private sector jobs.

Vision, the “leveraging of our world-class SUNY system and prestigious private universities to partner with new businesses that will provide direct access to advanced research, development resources, experts in high-tech  industries and more than 300 international and domestic business, academic and community entities.”  He closed, “it’s no wonder companies are lining up for the launch of Start-Up-NY.” Initial reaction was positive, and one year later 41 businesses entered the program promising to create 1,750 new jobs.

Just how many of these jobs actually materialized is anyone’s guess, as are estimates associated with the “Economic Development Zone” program established by the legislature in 1987, the “Excelsior Job’s Program” in 2010 established by Gov. David Paterson, and “Start-Up-NY.”

It’s not a good news story, and to quote Professor John Bacheller in a report titled “New York’s Ineffective Business Tax Incentives – Policy by Numbers, (using information published by the Empire State Development agency for the years 2012-2013) only “15,582 net new jobs were created at a cost to the state of $47,357,602.” That’s $3,039.25 per job, excluding millions in advertising expenses. One company closed operations after it was authorized to receive $556,446 in tax credits. In 2015, only 39 new jobs were created on Long Island.

Now the rest of the story. The Governor’s Executive Budget proposal (for the fiscal period 2017-18) was submitted to the Legislature last week. If approved, qualifying criteria will be changed and the program will be re-titled the Excelsior (ever upwards in Latin) Business.

How to accomplish what is really needed still remains a mystery. So much for politically driven agenda’s, responsible spending, proper administration and oversight in times of desperate need.

Note: The Empire State Development (ESD) is the economic development arm for New York State. Two audits have been released  that are highly critical of the administration of the program, oversight and spending. They are Report 2015-S-15 and 2014-S-10 both of which are available on my web site



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