What’s in a name?

Andrew Cuomo and FDR: Two guys with similar problems.

Andrew Cuomo and FDR: Two guys with similar problems.

A timely change of name can make a difference. As “Tax-Free NY,” Gov. Andrew Cuomo’s effort to create tax-free zones around the state’s colleges in an effort to exploit the synergy between academic institutions and entrepreneurial activity faced tough political sledding. Who wanted to give tax breaks so newly arrived or new-grown businesses could better compete with existing ones? But as “Start-Up NY” (a delightfully clumsy acronym for SUNY Tax-Free Areas to Revitalize and Transform Upstate), the four men in the Albany room who trade off state legislation early every summer were willing after a few tweaks to support Cuomo’s efforts.

Since SUNY was itself an acronym, one impudent journalist suggested, the initiative would better be called “Tart Up.” The governor was asked at a press conference about the name change. “I think it was confusing to people,” he glibly explained. “I spent a lot of time [with] people saying to me, What does that mean, Tax-Free? That’s all it was.”

The new program is modeled on the state government’s successful but very expensive involvement in Albany-area nanotechnology and New York City’s aggressive moves to support education in engineering. In the Albany area, students, faculty and private firms work together and separately at the College of Nanoscale Science and Engineering (CSNE) to conduct education, pure research and cutting-edge commercial nano-industry products. New York City recently moved forward on construction of a flashy-looking $2 billion Cornell University science campus and office complex on Roosevelt Island made possible by a grant of free land and up to $100 million in infrastructure improvements from the city.

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Support for this particular public-private partnership model has been expanding. CSNE is now bringing this model to projects in Utica, Rochester and Buffalo. In Syracuse, the state and local governments are assisting Upstate Medical University to work with a private developer to create a mixed-use medical and high-tech research center. And the largest high-tech firms with offices in New York City have been happy to collaborate in the aggressive Michael Bloomberg initiatives.

Now Start-Up New York looks to expand the same approach throughout the state, relying particularly but not exclusively on efforts at other SUNY campuses. This involves a certain amount of political log-rolling, of course. You support extension of the legislation to include my projects, and I’ll support yours.

In their comments after the deal on the tax-free zones, Dean Skelos and Jeff Klein, the co-leaders of the state Senate, emphasized the need for job creation. Assembly Speaker Sheldon Silver took a slightly different tack, emphasizing the role of New York’s institutions of higher education. “This new program will foster business creation and expansion around our universities,” Silver said. “It will have a significant economic impact by providing job opportunities at thriving businesses right in our own communities and help a new generation of New Yorkers achieve their academic and professional goals.”

In stimulating job creation, Start-Up NY could have a positive effect. But it won’t be an immediate game-changer, at best taking many years to evolve. As of this May, New York State boasted 8,937,200 jobs. The maximum number of workers qualifying for five years of income-tax-free status under the new program, with slightly reduced tax benefits over a second five years, is 10,000.

The Start-Up legislation was amended to include select downstate projects as well as broader categories upstate, to be expanded to many locations where there are no connections to a college, and to tie into the state’s job development capabilities. After all the deals were made, the original lofty purposes of the synergy between academic institutions and entrepreneurial activity were transformed, and a broader grab bag emerged.

Conservatives often refer to such government-sponsored initiatives as confirming what they like to call the-build-it-and-an-economy-will-come fallacy. Under what circumstances are inducements to new industries likely to accomplish economic-development goals? Does the process operate differently in small markets than in large ones? How are the linkages between education and entrepreneurship accomplished?

What part of Start-Up is likely to work in the Hudson Valley? What are the odds it will?

A couple of professors at Columbia University, William Eimecke and Steven Cohen, were more positive, praising Andrew Cuomo’s willingness to try new things. It reminded them of the words of Franklin Roosevelt, another New York governor during tough times: “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”

 

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