By Howard Zemsky
Recent news reports have been critical of StartUp NY’s economic development program. Opponents suggest that as StartUp NY has created “only” 400 jobs it has failed to bear fruit. The full story tells a different tale.
StartUp NY is a business development program that offers new companies a tax-free environment for 10 years. It is designed to counter New York’s reputation as high tax and to recruit startup enterprises. To date, the program has attracted over 200 companies both big and small. Business relocation and job creation take time to phase in and the accurate number of jobs committed to the program is 4,100 over the next several years.
As the initiative offers only tax forgiveness and because the jobs did not exist before the arrival of the program – taxpayers aren’t on the hook. StartUp NY is virtually cost-free to the state.
It is ironic that the critics – who are primarily conservative ideologically – would choose to argue that cutting taxes is not a desirable incentive to attract business. The conservative philosophy has argued the exact opposite for years.
But StartUp NY is only one piece of the puzzle. In today’s competitive marketplace in which state governments compete with one another to attract new businesses and top talent, reducing taxes – even to zero – is still not enough to win the day. Additional incentives are required to attract or grow businesses in New York.
The state routinely offers tax credits, grants and loans to incentivize businesses to make investments and create jobs. We operate a variety of programs that customize our assistance to a business’ individual needs. These programs include the Excelsior Jobs Program, Global NY, the Economic Development Fund, New York Ventures and the New York State Certified Business Incubator and Innovation Hot Spot Program.
Some have suggested that the state’s business advertising is not productive. The numbers indicate otherwise. New York’s reputation as a high-tax, anti-business state is now a vestige of the past.
New York has fundamentally reversed its anti-business culture. Corporate income taxes are at the lowest rate since 1968; the manufacturers tax is the lowest rate since 1917; and statewide personal income tax rates are lower for every bracket than in 2010.
Bottom line: The state’s economic development model is a resounding success. The results are both real and tangible. New York has added 794,000 private-sector jobs and experienced employment growth in 56 of the past 65 months. The state’s unemployment rate is 4.7 percent – roughly half of what it was in 2011. But this is just the start. Through sustained investment in every region of the state, we can keep business booming and attract jobs for years to come.
Howard Zemsky is chairman of Empire State Development