Governor Andrew Cuomo’s “tax-free” plan to bring technology jobs to New York has long been considered a failure, and buried in Friday afternoon’s holiday weekend document dump is a report that demonstrates the degree of the latest NY boondoggle’s failure.

When first launched in 2014, problems with misinformation and unclear advertising that cost New Yorkers million swirled around START-UP NY.

Newsmax reported at the time:

New York, rated the worst state in which to set up a business, is trying to lure entrepreneurs with a seductive new TV commercial that promises: “Move here … and pay no taxes for 10 years.”

. . . . But critics say the devil is in the details: the plan, which is centered on the creation of tax-free zones, contains many regulations and exceptions that will make it hard to work as promised.

. . . . The program doesn’t actually guarantee 100 percent tax-free status — and it only applies to a specific segment of the business world. In other words, it’s a lot more complicated than 30-second media spots put forth, says a lawyer who has dissected the program.

“This is a complicated program with extensive regulations and guidelines,” Kevin McAuliffe, a partner in the law firm of Hiscock & Barclay, was quoted as saying on “The benefits can be lucrative, but they will not necessarily eliminate all tax liability.”

Start-Up NY applies only to new or certain expanding businesses that are willing to partner with universities in the state and locate near their campuses.

Some businesses are exempt from the plan, including retailers, hotels, medical providers, and law offices.

The next year, in 2015, Forbes highlighted the failures of the fledgling program, calling the returns “laughably small” and point to crippling regulations and an “alphabet soup of bureaucracies” interested in naive political idealism rather than in hard facts, returns, or outcomes.

Forbes reported at the time:

After months of foot-dragging, the Empire State Development Corporation released a report last week about Start-Up NY, a program that it began under Governor Andrew Cuomo to attract tech innovation. Despite Cuomo’s promises, the report found that Start-Up NY spent millions in marketing dollars, while creating laughably small returns. Thus, it fits into the ESDC’s broader culture of failure, and should be a rebuke for someone who has presidential ambitions, yet reinforces the policies that have contributed to economic decline throughout New York.

. . .  . The report summarized the first year of a program that Cuomo launched in 2014 to create tech clusters in the state, giving tax breaks to tech-related businesses that open near college campuses. The state has already spent $47 million on advertising, and overall public expenditures for the program’s first three years are expected to be $323 million. Total job creation figures after five years are expected to be 2,085, but so far that figure stands at a whopping 76 jobs.

. . . . The reason for the failure, says the report, is that the ESDC runs programs without checking whether they “have succeeded or failed at creating good jobs for New Yorkers or whether its investments are reasonable.” Instead, these programs are an alphabet soup of bureaucracies that advance popular political causes, without worrying about returns. These range from START-UP NY [to a host of other feel-good projects].

Things aren’t much better this year.

The Ithaca Journal reports:

Businesses participating in the state’s Start-Up NY program created 332 jobs in 2015 after creating 76 in 2014, according to a new state report.

The report from Empire State Development, the Cuomo administration’s economic-development branch, was released Friday evening ahead of the holiday weekend, a time notorious for government agencies to release unflattering news.

It was more than 90 days late: By law, the report was due March 31.

It’s not clear that anything was learned from the first two failed years . . . or changed to improve the program’s success.  Instead, it appears the same failed plan is in place with its supporters dreaming wistfully of what they would like to see happen in the coming years.

The Ithaca Journal continues:

The state has spent tens of millions of dollars promoting the program, including $53 million from late 2013 to early 2015. The bulk of that cost was spent on seemingly ubiquitous television advertisements.

After two full years, the program has created more tax-free areas across the state (441) than jobs, according to the report.

. . . . The report does little to tout the Start-Up program’s current job-creation results, putting the number of jobs created last year into a footnote while choosing instead to tout the companies’ five-year projections. The companies have “committed to creating over 4,100 jobs” in their first five years, according to the report.

This sounds like the typical progressive “feel good” government project: big and unrealistic dreams, lots of taxpayers’ hard-earned cash, crippling regulations, miles of bureaucratic red tape, and little perceptible improvement.

[Featured image via JanosNYC]


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