Editorial: Too soon to judge effectiveness of Start-Up NY - The Buffalo News
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Editorial: Too soon to judge effectiveness of Start-Up NY

There are two ways to look at Start-Up NY’s slow start: glass half full, or glass half empty. We choose the glass half full option, with the potential to fill quickly.

The economic development program offers lucrative tax breaks to lure businesses into locating in the state. A new state report points out that the job numbers have been lower than promised.

Still, even though only a few companies participating in the program have managed to create significant numbers of new jobs, it qualifies as at least a partial success. And the jobs that have been created have been relatively inexpensive, compared with other business development programs.

And it’s too early to fully evaluate a program involving start-ups, which take time to get rolling and by their nature are risky ventures. A few can be expected to become major successes, but some will inevitably fail.

One of Gov. Andrew M. Cuomo’s signature programs, Start-Up NY, was launched in 2013 with captivating incentives, including eliminating for a decade sales and property taxes and state business and corporate taxes for companies that locate on or near college campuses. In addition, eligible employees pay no state income tax for a decade.

The program was – and remains – a clever mechanism to lure companies turned off by New York State’s notoriously high taxes and unfriendly business climate.

The program is working, although more slowly than hoped. Turning the state’s economic ship around will take time.

As recently reported in The News, Start-Up NY has created 288 new jobs in the region so far. Those jobs at the 43 companies participating in the program amounted to 40 percent of the 722 net new jobs created last year by all of the 141 businesses statewide that have been accepted into the program and submitted reports to the state. A total of 212 firms had been accepted into the program by the end of last year. Note: three of every 10 companies participating in Start-Up NY are based in this region, some of them only recently.

Kenneth Girardin, an analyst at the fiscally conservative Empire Center for Public Policy in Albany, paints a dire picture, saying that the jobs report is a sign that “the end may be near” for the program the governor once touted as “the greatest economic savior” for upstate New York. It is an opinion shared by critics, but not by companies that located here because of the program.

Tablet computer manufacturer Bak USA might not have landed in Buffalo a couple of years ago without Start-Up NY. Now it has an eclectic international workforce of nearly 80, those without high school diplomas working next to employees with advanced degrees. It is a clear success story, and one of three so far in Western New York. The others: online auto auction company ACV Auctions and employee benefits provider Liazon Corp., which together have created more than 200 jobs.

The 43 companies that have set up shop in Western New York promised to create 1,127 jobs over five years. The pace may be behind initial projections, but the program has to be given time to prove itself.

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