A routine oversight hearing by the state Assembly turned testy when Howard Zemsky, Governor Andrew Cuomo’s economic development czar, endured over two hours of questions about Cuomo’s economic development programs, which are currently under federal investigation.
Democratic and Republican Assembly members asked Howard Zemsky why the economic development program known as Start-Up NY — which offers a 10-year tax break for new high-tech businesses that locate on college campuses — is seeming to take so long to begin.
A report issued at the start of the July 4 weekend found just 408 jobs have been created, though state officials predict that thousands more new positions eventually will come.
Assemblywoman Addie Russell, a Democrat from Watertown, called the results “paltry,” and said it comes as the state university system has been severely underfunded.
“I’m not sure if we should not be doing a complete rethink of where this program is housed and how it is operated,” said Russell, who said the Cuomo administration “starves” SUNY.
Zemsky told the Assembly members that it’s too early to judge Start-Up NY, and he continued that argument outside the hearing, saying, “take a deep breath,” and give the program “some more time” as he spoke with reporters.
“How do you realistically oppose the combination of industry and academia in the state of New York?” Zemsky asked. “We’ve put the framework in place to succeed. And I think we’ll change those perceptions when we continue to show steady progress in job creation.”
The state comptroller also has issued several audits that are critical of the Cuomo administration’s economic development programs.
Comptroller Tom DiNapoli, who like Cuomo is a Democrat, has not always had a good relationship with the governor. DiNapoli has questioned the value of a $50 million advertising campaign promoting Start-Up NY. The comptroller also found a lack of oversight of the Excelsior jobs program, saying economic development officials could not verify whether companies actually create the number of jobs they promised, and in some cases could not justify why businesses were granted the tax breaks in the first place.
Zemsky said the negative audits are “misleading and unfair.”
“It did not really paint a proper picture of the Excelsior tax credit program,” Zemsky said. “I think that was unfortunate.”
DiNapoli, speaking in July when the audit was released, questioned the larger concept of the overall worth of the economic development programs.
“At the end of the day, many of these programs do cost a lot of money,” DiNapoli said in an interview with public radio and television.
The comptroller said the money might be better spent reducing government regulations or taking other steps to reduce the cost of doing business overall for more companies.
But DiNapoli said the legislature and governor ultimately must decide whether to continue the programs.
Looming over everything is the ongoing federal corruption probe by U.S. Attorney Preet Bharara.
Zemsky admitted, under questioning from Assembly members, that some recent payments to key economic development projects, including the giant SolarCity plant in Buffalo, have been delayed due to increased scrutiny over contracts now that the feds are investigating. Cuomo also has hired his own private investigator to review all of the contracts.
“We clearly have more scrutiny, further layers of protection and review,” said Zemsky. “That’s going to take some getting used to.”
But Zemsky said he hopes the probe by the U.S. Attorney is now coming to a close, and his agency can move on from that.