Cuomo’s Start-Up New York business program needs more than a name change to accomplish what it set out to do
After a rough start and a wave of criticism, New York state Gov. Andrew Cuomo’s landmark initiative Start-Up New York is getting a name change and a revamp. But the program’s face lift will still fall short of the program’s original purpose.
The goal of Start-Up NY, which is now the Excelsior Business Program, is to tap into the academic, intellectual and economic resources that exist in the state by incentivizing business partnerships between new companies and established universities to spur economic growth and help create jobs.
The original program, Start-Up NY, was criticized for only creating 408 jobs at a marketing cost of about $53 million in its first two years of operation, according to The New York Times. Considering the program was a major price tag for what was supposed to be a huge economic development boost, it’s no surprise public officials are raising questions about its success. Under the new program, there will be minor changes made to the original requirements, but these changes won’t be enough to turn the Excelsior program into the economic driver it needs to be.
There are three requirements for a business to participate in the program, according to the Start-Up NY website. The business must be a new or existing business in the state, partner with a university or college within the state and create at least one job in the next five years. There are some industry restrictions, as businesses in the hospitality, retail and or retail banking industries are excluded from the program. If a business meets these requirements, they will be able to operate completely tax-free for 10 years. That means no income taxes for employees, sales taxes or property taxes.
Under the new Excelsior Business Program, there will be a change the existing job creation requirement to lower the number of jobs a business must create in order to qualify for tax benefits, according to The New York Times.
There are intrinsic benefits to the Excelsior program, but the focus is off. The foundation of the program is built on two things: tax breaks and partnerships with academic institutions. In theory, tax breaks should bring new businesses to the area, but this has clearly not been as effective as the government hoped it would be. This is mainly because start-ups in their early stages have not achieved the financial scale that would make a tax break a deciding factor in where to locate their business. Partnerships with academic institutions, on the other hand, are strong starting points to create a more effective program.
The Excelsior program should be focused on creating a wide network of resources for new businesses to use. This network should include subject matter experts, industry experts, legal counsel and other resources that start-up companies need but can’t afford. One of the most essential things to a new company’s survival is its proximity to much needed resources.
“We need to create networks of people, service providers and resources to support start-ups,” said Linda Hartsock, executive director of the Blackstone Launchpad at Syracuse University. “And we need to integrate this environment with the local community for it to be effective.”
The Blackstone Launchpad created a network across universities to connect start-ups with all sorts of resources to help their businesses. There’s a reason why many new companies are willing to pay the premium to operate in major cities within the United States: They have access to a vast amount of resources in one central location. This is an invaluable asset for new companies.
To create more jobs and spur economic development in New York, the government must focus on centralizing available resources and making them more accessible through an organized network — a move that would be much more beneficial for start-ups than a tax break.
Despite the negativity around the program, it is a forward-looking move to revitalize the upstate New York economy. It just needs a few adjustments to accomplish what it set out to achieve.
Daniel Strauss is a sophomore entrepreneurship and finance double major. His column appears weekly. He can be reached at email@example.com.
Published on February 21, 2017 at 11:40 pm