ALBANY – On the day his economic development agency proposed emergency rules to implement his START-UP NY program, Gov. Andrew M. Cuomo said hundreds of companies have expressed an interest in getting tax-free benefits in return for locating start-up businesses on college campuses.
“It will sell itself,’’ Cuomo said Wednesday of the tax-free program that was approved earlier this year. At an event on Long Island, he added, “I wish I could do zero taxes for the entire state. Unfortunately, I can’t. It’s impossible.”
Cuomo did not identify any of the companies interested, nor is it certain how serious their interest might be or whether they would even qualify under the law’s provisions that restrict the kinds of companies eligible.
The governor believes the program will lure companies and workers to New York with the promise of no taxation, including for employee wages for 10 years. The companies would be located on public or private colleges, or nearby.
Critics call the program a corporate giveaway that only rewards a select few companies while taxes still remain high for other businesses struggling to remain in places like upstate.
The Department of Economic Development on Wednesday published in the New York State Register its emergency and proposed rules for the START-UP program. It lists various provisions of the program, including that Cuomo and legislative leaders will be the ones choosing – through their own handpicked board – what companies get to locate tax-free at private colleges while those going to state university campuses will need final approval by Cuomo’s economic development commissioner.
The rules note that a company must guarantee job creation in the first year and that it cannot be engaged in the same line of business that it conducted at any time within the last five years in New York without the approval of the commissioner. Companies must also certify that they “would not compete with another business in the same community but outside the tax-free area.”
The emergency rule-making document also shows the governor’s Economic Development Office does not believe it has to conduct an analysis of effects the tax-free program might have on such things as job creation and the impact of lost property tax revenues for localities. Such cost analysis work is often performed by agencies when proposing new rules.
“Because it is evident from the nature of the proposed rule that it will have a net positive impact on small businesses and local government, no further affirmative steps were needed to ascertain that fact and none were taken. Accordingly, a regulatory flexibility analysis for small business and local government is not required, and one has not been prepared,” the rules state.
As for a “job impact statement,” the rules state none is needed because the program “will have either no impact or a positive impact on job and employment opportunities.”
The new rule notice also includes this paragraph: “Cost to the state government: none.”
Cuomo’s Budget Office earlier this year projected the program will cost the state $323 million by 2017.