ALBANY - For three hours Wednesday, Gov. Andrew Cuomo's top economic development official faced a barrage of questions from state lawmakers raising concern about transparency in the government's job-spurring programs.

Then the lights went out.


"So much for transparency," Empire State Development President and CEO Howard Zemsky joked as he and startled lawmakers briefly sat in the dark at a budget hearing near the Capitol.

The lights came back within seconds, a small blip in a contentious, marathon hearing Wednesday on Cuomo's $152.3 billion budget proposal and various changes he wants to make to some of the state's top economic-development programs.

Cuomo's budget proposal includes changes to the controversial Start-Up NY program, which provides up to 10 years of no state taxes to new or growing companies that locate in specific zones but has created just 408 jobs in its first two full years.

It also includes an extension of the state's $420 million in tax credits for film production, another $500 billion to boost the Buffalo area, and the continuance of the Regional Economic Development Council program, which lawmakers are pushing for more oversight of.

The governor wants to re-brand and tweak the Start-Up NY program, renaming it the "Excelsior Business Program" despite a $53 million advertising campaign touting Start-Up less than three years ago.

Zemsky defended the program, calling it a success because it fostered collaboration between start-up companies and SUNY colleges and universities, where most of the tax-free zones are located.

"I spent five hours recently with 30 Start-Up NY companies at (the University at Buffalo)," Zemsky said.

"That incredible synergy between all of those business that are all helping one another, and the engineering school which is helping them, and the business school which is helping them ... it's having a dramatic impact on the ecosystem of innovation."

Some state lawmakers were skeptical, pointing to the cost of the advertising campaign and questioning why Cuomo would re-brand it if it were a success.

"How do you justify wasting the $53 million and re-branding it the Excelsior program when you have repeatedly said it was a success?" said Assemblyman Steve McLaughlin, a Rensselaer County Republican and frequent Cuomo critic.

"I think it's great that after a couple years of beating me up for Start-Up NY, you want to keep Start-Up NY," Zemsky fired back, saying Cuomo's proposals would "simplify" the program and pair it with the Excelsior Jobs Program, which provides tax breaks to expanding companies that create jobs.

McLaughlin fired back, calling the program a "failure."

Others raised concern about the Regional Economic Development Council program, which doles out more than $700 million annually in state grants, tax breaks and low-cost energy for local projects.

Ten regional councils filled with business, education and local leaders help rate the projects and put together regional economic plans.

But lawmakers said the selections aren't transparent and offer little insight into how the projects are chosen.
Zemsky defended the program, saying the business leaders who participate in the program avoid conflicts and contending the councils have helped spur growth.

The councils have done an "amazing job," he said.

“Why we call success failure is a mystery me," Zemsky said. "I don’t think we should call success failure. That’s my opinion.”