Cuomo’s “Start-Up NY” Is Not What It’s Cracked Up To Be
As a New Yorker who is fascinated by the “Up-state and Rust Belt Revival” initiatives that have been set forth by Democratic Governor Andrew Cuomo, I am naturally intrigued by the “New York State Open for Business” commercials I have seen all over television.
Typical abandoned factory in a Rust Belt City
The very-well marketed advertisement has been promoted all over TV:
“The new New York is open. Open to innovation. Open to ambition. Open to bold ideas. That’s why New York has a new plan. Dozens of tax-free zones all across the state. Move here, expand here or start a new business here, and pay no taxes for 10 years. We’re New York. If there’s something that creates more jobs and grows more businesses, we’re open to it.”
The “New York Open for Business” campaign has the ultimate goal of attracting businesses, small and large and adding revenue to the state.
And I must say I completely agree with the idea of bringing businesses and income to the state, who wouldn’t?
In a nutshell, the Governor’s plan calls for “tax free zones” located all around the state, near one of 64 state universities. Businesses that start-up or promise to relocate to NY would not have to pay taxes for 10 years.
But as great as these promises sound, critics say that the plans hold very little clout, as it contains a great deal of regulation that will make the goals of the project nearly impossible to be carried out.
While I think it is great that Cuomo’s initiative focuses on high-tech and manufacturing companies, it misses to attract major retail and wholesale firms, or medical service businesses and other business sectors.
Upon further examination, Cuomo’s plan applies only to certain businesses that are inclined to partner with universities in the state and locate near one of the state’s 64 campuses.
And not all high-tech or other welcome companies will receive full tax-exempt status.
According to Lain Murray, a VP at a Washington based think tank, Competitive Enterprise Institute, “There will be some businesses for whom margins are tight enough to allow them to start up with the tax relief rather than without it, but nowhere near the number if government really did get out of the way and allow real regulatory relief for them”.
Murray went on to say that “Tax is just one element of the business calculation”. “A real enterprise zone would be much more like the Free Cities project being undertaken in Honduras, where four separate freedoms are guaranteed: legal, economic, administrative, and political. In other words, the businesses in these new communities are freed from the pile of constraints that go well beyond tax”.
Certainly the initiative to create enterprise zones is clearly desirable to the current status of high-taxes; however it would be more advantageous, if the state’s approach was a broad-based tax relief for all, regardless of location.
Though the Start-Up NY campaign started back when Cuomo was elected, the Mercatus Center at George Mason University report called “Freedom in the 50 States” ranked New York 50 out 50 as regards to economic freedom.
Moreover, a New York State think tank, the Empire Center for New York State Policy, released a report early January titled, “The Empire State Exodus Still Continues”, which concluded that the state saw the largest net migration loss of any state in 2013, loosing 104,470 residents to other states. And Florida, which has gained a lot of New Yorkers, is about to take New York’s spot as the third most populous state!
If Cuomo’s initiatives are working why are people still leaving the state in droves? I think the Governor has the right intentions and he is far better than the left wing mayor of NYC De Blasio, but upon further examination I do believe that in order to see a great deal of success, Cuomo will have to slash a large amount of regulation from his plan.