New Yorkers are shaking their heads when they hear the commercials that say “all around New York, the economy is growing.” Probably because they air in between news segments of the latest business to leave their hometown, or that the latest unemployment rate for their county is still above 5 percent. They don’t necessarily deny that the economy is doing better than it was a decade ago, but it’s hard to really tell the difference.
And Gov. Andrew Cuomo’s job creation programs like the Buffalo Billion and Start-Up NY, which he has pressed would help revitalize upstate’s economy, appear to only have done well in those commercials.
A disappointing report at the beginning of the month shows that in its first two years, Start-Up NY, which provides 10-year tax breaks for companies and their employees if their operations are consolidated with a college, has created a mere 408 jobs so far. The Buffalo Billion program has been under federal investigation for three months now for alleged cash flow problems. Just late last week, the governor’s administration announced it was paying a former federal prosecutor up to $450,000 to conduct an internal review of the initiative. The whole purpose of the initiative is to stimulate the economy of the state’s second-largest city. A third job-creating program also recently received a blistering critique by state Comptroller Thomas DiNapoli, saying officials failed to verify that companies receiving tax breaks were eligible to take part in the program and actually created the jobs they promised.
The governor has repeatedly defended his efforts. “I think the criticism is very unfair and ironic,” Cuomo is reported to have said regarding Start-Up NY’s performance. “The program has been in operation a couple of years. It takes time.”
There’s no doubt about that. These sorts of initiatives can take a number of years until they live up to their full potential. And to be fair, the number of jobs created each year by Start-Up NY has gradually increased. The question is how long are New Yorkers willing to wait? The upstate region has suffered economic stagnation for years and it was only augmented by the Great Recession of 2008 and its aftermath. The thing is, a lot of them aren’t waiting at all. Jobs are leaving the state and many people have left with them. More than half a million residents have moved out of New York since 2010.
But it isn’t just longevity that makes people skeptic. Just looking at the lackluster results of Start-Up NY is reason enough for taxpayers to be concerned that they’re footing the bill for these job programs that might not really amount to anything. Cuomo once labeled Start-Up as a “major transformation” and a “game changer.” But it’s significantly underperformed in many areas since. It doesn’t seem likely it will reach its target of creating 4,100 jobs by 2020. At the program’s inception, the state budget office projected it could generate as much as $150 million in tax breaks in the current fiscal year, but has actually only generated $1.19 million. And while Cuomo said the initiative would cost taxpayers nothing, New York spent a whopping $53 million on those aforementioned commercials to promote it.
Some are probably thinking it may be too little too late. Although the backdrop of Cuomo’s ideas is providing tax incentives for businesses, New York has in recent years given a cold shoulder to several business propositions that would’ve provided jobs and opportunities throughout the state — like hydrofracking and underground oil pipeline construction. The state’s recent $15 minimum wage hike isn’t exactly a welcoming sign to them either. In 2013, the year Start-Up NY was in the works, Forbes ranked New York as the least business-friendly state in the nation.
Others believe the system doesn’t always have the best intentions. The Buffalo Billion project investigation focuses on two former top aides to the governor. In a state that already has a big reputation for government corruption, it might appear like there could be more bad strings attached to these initiatives that have yet to be discovered. In addition, federal data shows companies taking part in Start-Up NY don’t even have to hire New Yorkers, or Americans. Some have already applied for foreign workers, which is completely legal by the program’s rule book. That doesn’t look like it benefits New Yorkers much. And Cuomo’s fierce insistence on his plans’ eventual success is also playing to his critics’ song that claims their main purpose is to build up Cuomo rather than build up the economy.
Where New York is now is in the middle of a win-lose situation. If Cuomo’s job programs turn out to be a success that brings the state’s rural land and smaller cities out of their fiscal ditches, or least provide a direction for future programs to go in, then there is no reason to complain. But if they fail, all that can be said is that they’ve wasted time, money, energy and resources, and that the state is back to square one.
What the state should do is seriously consider a thorough reevaluation phase. It can’t hurt. There’s no use in continuing to spin the wheels if you’re only sinking deeper into the mud. The administration wants New Yorkers to be patient and understanding and, in many ways, roll the dice. But the people can’t afford to be wrong. The people of New York and New York jobs programs have this in common: They both need to work.