The Start-Up NY promotional campaign has cost taxpayers $53 million since the program’s inception in late 2013, while it has led to $1.7 million in private investment and 76 jobs so far, state records show.
The state spent $47 million on the ads alone since the program started in December 2013, and the total cost included production expenses and other marketing efforts through last month, according to Empire State Development Corp. In July, the agency said $28 million had been spent on the ads.
Gov. Andrew Cuomo and state officials have defended the spending. The program provides tax-free zones for 10 years to companies that locate on or near college campuses, particularly upstate. To promote the program, the state has embarked on a national ad campaign, Gannett’s Albany Bureau reported today.
A key part of luring new businesses to New York has been to dispel its reputation as a high-tax state, Howard Zemsky, a Buffalo businessman who heads Empire State Development, the state’s economic-development arm, said in the program’s annual report last week.
“The promotional campaign set into motion in late 2013 did just that. Today, Start-Up NY is a brand known not only throughout the state and across the nation, but around the world,” Zemsky wrote.
The ads, however, have been criticized for being a waste of taxpayers’ money and labeled as being politically motivated. Although Cuomo doesn’t appear in the ads, they ran during his successful re-election bid last year.
“Start-Up NY was never about lifting New York’s economy, it was all gimmicky self-promotion for Cuomo,” Assemblyman Kieran Michael Lalor, R-Fishkill, Dutchess County, said in a statement. “The ads are a cynical attempt to persuade New Yorkers that the state’s business climate isn’t among the worst in the nation.”
The state has been allocating $50 million a year for the past five years under New York’s “Open for Business” marketing campaign, which includes Start-Up NY and the “I Love NY” tourism effort. Comptroller Thomas DiNapoli is auditing the program.
As of July, the state had spent $161 million out of a $237.5 million pot for the overall campaign; about 60 percent went to out-of-state ads.
The money has been approved by the state Legislature in each year’s budget, and it has come from a $90 million annual transfer from the state Power Authority, which runs 16 power-generating facilities that sell electricity to utility companies.
In this year’s state budget approved April 1, another $50 million was allocated to the “Open for Business” campaign.
While 356 tax-free zones at 62 colleges and universities were created, 30 companies began operations last year and created 76 jobs, investing $1.7 million.
ESD said late yesterday that 54 companies approved in 2014 for the program have pledged 2,100 new jobs over five years and to invest $91 million. The companies received $56,560 in tax credits last year, the report said. They need six months in the program to get the tax breaks.
Another 39 businesses have been approved this year, for a total of 93 since the program started.