Economic development hearing features heated exchange

Nov 14, 2017

Testimony at an Assembly hearing Monday grew heated as Gov. Andrew Cuomo’s economic development chair defended some faltering job creation programs.

Empire State Development Chair Howard Zemsky also signaled the state may be backing away from a key program to give tax breaks to startup entrepreneurs.

Assemblyman Robin Schimminger, the chair of the Economic Development committee, asked Zemsky about the leadership of the Start-Up program, which offers tax breaks to entrepreneurial companies that agree to begin operations in New York. The previous director left 16 months ago and has not been replaced.

“Has that been resolved yet?” Schimminger asked.

Zemsky said the program, introduced several years ago with great fanfare by Cuomo, will now be administered by several existing officials at the Empire State Development agency.

Zemsky said it’s viewed right now as another “tool in the economic development tool box” and doesn’t need a specific person to run it.

“It isn’t specific to any one person,” Zemsky said.

Start-Up has been the subject of controversy after a report from the state comptroller found that $45 million was spent on advertising the program between October 2013 and October 2014, while just 76 jobs were created. The program created a total of 408 jobs by 2016.

Cuomo already appeared to be retreating from the program earlier this year, renaming Start-Up in his state budget and tightening the rules.

Afterward, Zemsky denied that the state is backing away from Start-Up.

“The more people we have working on it, the more impactful it will be,” Zemsky said. “I see it as being smarter.”

Zemsky grew testy when he was questioned about an economic development program in Buffalo known as 43 North. It runs competitions and offers cash awards of up to $1 million for startup companies that agree to stay for a year.

Assemblyman Ray Walter, who represents portions of the Buffalo suburbs, told Zemsky that he was concerned that three-quarters of new companies stayed in Buffalo just long enough to collect their tax breaks, then left the area.

He asked Zemsky to draw a “direct connection” between taxpayer dollars spent on the program and economic benefits for the community. That irritated Zemsky, who accused Walter of opposing key economic development projects.

“My job has been to be involved with Buffalo and the revitalization of Buffalo, in a way that you, Assemblyman, could have never imagined sitting in that seat for however long you’ve been in it,” Zemsky said.

The two men began talking over one another, with Walter repeatedly asking Zemsky to “draw the connection” between state spending and specific job creation. At one point, Zemsky said dismissively, “Yup, yup, yup, blah blah.”

Walter persisted, saying that the Federal Reserve reported zero job growth in western New York in the past year and a half. And he challenged Zemsky on New York’s state and local taxes, which are among the highest in the nation.

Zemsky pushed back, saying until the Cuomo administration began its economic development programs, there was no real leadership on economic development for “40 fricking years.”

The tensions come just weeks before several former Cuomo associates, including former key economic development officials, go on trial on federal corruption charges for alleged offenses including bribery and bid-rigging.