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New York's expensive startup initiative only created 76 jobs

New York's expensive startup initiative only created 76 jobs


Start-Up New York promised 2,000 jobs, but only delivered 76

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When Governor Andrew Cuomo launched Start-Up New York in late 2013, his office called it a "game-changing" initiative that promised "a windfall" of innovation. The program established 356 tax-free zones in order to "attract high-tech and other start-ups." However, a new report from the state's Department of Economic Development found that the initiative only created 76 jobs in 2014, despite a $28 million ad campaign.

Cuomo's senior economic aide told Capital New York that 76 jobs was "a good number that we can stand behind," and it was only a matter of time before the other jobs materialized.

The zones created by Start-Up New York were tied to 62 sponsoring colleges and universities. The program allowed companies to operate tax-free for 10 years "on eligible campuses and spaces." According to the report, those 76 jobs came from 30 companies in industries like software, biotech, and manufacturing. The companies were supposed to invest $91 million over five years, but only invested $1.7 million.

Cuomo's administration peddled much bigger numbers in February

Part of the reason the numbers are so pathetic is because pre-existing companies are only eligible if they expand into those zones. That stipulation led critics of the program to dismiss it as "tax cronyism."

The program hasn't been around for long. But Cuomo's administration peddled much bigger numbers back in February. At the time, Cuomo's tax commissioner claimed that Start-Up New York had benefitted 73 companies, pulled in $104 million in private investment, and created 2,300 jobs, Capital New York reports. Those promotional numbers, however, were merely commitments, not a sure thing.

This year an additional 26 businesses have been approved for the program, but 12 have withdrawn their applications.

Cuomo isn't the only local politico inflating his economic impact. During his tenure as mayor of New York City, Michael Bloomberg tried to make creating "tech" jobs part of his legacy. Upon closer inspection, Bloomberg's role was also smaller than it appeared.