A budget deal was struck Wednesday that will replace the State of New York’s Empire Zone program with a smaller less costly program. No, I was not there. But there have been a few good news sources on this topic today.
Budget deal cuts Empire Zones to save money
By Tom Precious, News Albany Bureau of the Buffalo News World & Nation
The Empire Zone program, the chief economic development program for upstate New York for the past decade, will be eliminated and replaced with a scaled-down version offering lower benefits and a shorter life span, under a deal reached Wednesday by budget negotiators for Gov. David A. Paterson and the State Legislature
The Empire Zone program, criticized over the years for bloated job-creation promises but still considered a vital tool in some distressed areas, will end June 30 to help reduce the state’s red ink. Companies already in the program will get benefits until their contracts expire.
AP Sources: NY Empire Zone program to be scrapped
By Michael Gormley, in Bloomburg Business Week.
Empire Zones would be replaced by the Excelsior Jobs program that would provide $250 million a year in tax breaks and credits. A senior Paterson administration official, who also spoke on the condition of anonymity because the deal [had not yet] been announced, said the new program will be aimed at “high growth, high wage industries.”
Key provisions would include:
Using a greater variety of tax incentives, including a job tax credit that subsidizes wages, an investment tax credit equal to 2 percent of what companies spend to expand or improve their operations, a research-and-development credit to encourage innovation; and a real property tax credit for “regionally significant projects.”
Targeting the aid for innovation and research companies, manufacturing, agriculture, and distribution firms. The new program would end subsidies to law firms, shopping mall development, utilities already located in New York and taverns that received aid under Empire Zones.
The program provides contracts for five years with annual reviews over job targets, as opposed to 10-year contacts under Empire Zones.
The incentives would total $50 million this year and rise to $250 million in the fifth year. By comparison, the Empire Zone program was expected to spend more than $600 million this year, a year of a fiscal crisis in which Paterson and the Legislature are trying to address a $9.2 billion deficit.
Apparently, companies already receiving benefits under the former program will continue to receive them until their contracts expire.