No Romantic Ending For Business Interests As Empire Zones Sunset
Critics in upstate business communities claim Excelsior Jobs tilts too heavily to Big Apple
Wed, 30 Jun 2010 15:50:00
The Empire Zone program, the state’s signature economic development program, is disappearing into the sunset, much to the delight of the critics who for years have slammed it as a waste of money and rife with abuse.
According to several upstate business interests, the Empire Zone opposition tilted economic development to downstate concerns. They say the government bowed to New York City business groups, whom they characterize as emphasizing government efficiency over economic development to benefit the state as a whole.
“This is the kind of thing that gives us concern upstate,” said Andrew Rudnick, president of the Buffalo-Niagara Partnership, which lobbied against the new program. “Who is looking after New York? We are far more impacted by a diminished program than they are.”
Though there was general agreement that the Pataki-era Empire Zone program needed to be changed to focus more on job creation instead of on job retention, the fear is that the Excelsior Jobs program—slated to replace Empire Zones—is too small to assist upstate communities getting crushed under a decades-long economic downturn.
Most galling to upstate business lobbies was that the Legislature simultaneously passed a film tax credit for New York City, even though many of the companies that will benefit from the tax credit are based elsewhere.
“It’s hard for us up here to be sensitive to the rationale of cutting back the scope of the Empire Zone program when you have added to the size of the New York City film tax credit,” Rudnick said. “The benefits almost exclusively go to out-of-state companies. And the economic impacts go almost exclusively to New York City.”
The Excelsior program’s cost is
$50 million a year, and is seen as benefiting primarily the kinds of financial and insurance firms that dominate New York City and of focusing more on bringing new companies to the state than helping ones that are already here. The program offers tax credits of $2,500 to $10,000 for each new job created by a project that adds a minimum of 50 new positions, and offers tax credits on research and development.
The Partnership for New York City and its allies spearheaded the lobbying on behalf of the switch to Excelsior Jobs, going up against the Albany-based Business Council, which organized opposition against what it saw as a diminished economic development program that will invest only a fraction of the amount of state money into economic development as was being done through Empire Zones.
Partnership for New York City president Kathy Wylde said her group has a long history of getting involved in issues that affect the whole state, arguing that the benefits of Excelsior Jobs outstrip what was being done through Empire Zones.
She rejected the idea that phasing out Empire Zones would be the cause of problems in the economically ravaged areas of the state.
“Number one, the state budget crisis has a lot to do with the failure of the private sector of central and western New York, and frankly, New York City has to make up the difference in our tax revenue,” she said. “I don’t understand how the Business Council could be objecting.”
Wylde added that downstate business concerns had to fill the void left by a diminished upstate private sector presence.
“The business community upstate has been dependent on subsidies for so long that I think there is a lack of confidence about what can be done.”
Kenneth Adams, president and CEO of the Business Council, did not mince words either, decrying Excelsior Jobs as a major mistake, especially for a state facing a budget crisis.
“It’s an underfunded pilot project,” he said. “These programs sound a lot like Ancient Rome—Excelsior, Empire. I hate to take you back to Gibbons and The Fall of the Roman Empire, but that’s where we are.”
According to several upstate business interests, the Empire Zone opposition tilted economic development to downstate concerns. They say the government bowed to New York City business groups, whom they characterize as emphasizing government efficiency over economic development to benefit the state as a whole.
“This is the kind of thing that gives us concern upstate,” said Andrew Rudnick, president of the Buffalo-Niagara Partnership, which lobbied against the new program. “Who is looking after New York? We are far more impacted by a diminished program than they are.”
Though there was general agreement that the Pataki-era Empire Zone program needed to be changed to focus more on job creation instead of on job retention, the fear is that the Excelsior Jobs program—slated to replace Empire Zones—is too small to assist upstate communities getting crushed under a decades-long economic downturn.
Most galling to upstate business lobbies was that the Legislature simultaneously passed a film tax credit for New York City, even though many of the companies that will benefit from the tax credit are based elsewhere.
“It’s hard for us up here to be sensitive to the rationale of cutting back the scope of the Empire Zone program when you have added to the size of the New York City film tax credit,” Rudnick said. “The benefits almost exclusively go to out-of-state companies. And the economic impacts go almost exclusively to New York City.”
The Excelsior program’s cost is
$50 million a year, and is seen as benefiting primarily the kinds of financial and insurance firms that dominate New York City and of focusing more on bringing new companies to the state than helping ones that are already here. The program offers tax credits of $2,500 to $10,000 for each new job created by a project that adds a minimum of 50 new positions, and offers tax credits on research and development.
The Partnership for New York City and its allies spearheaded the lobbying on behalf of the switch to Excelsior Jobs, going up against the Albany-based Business Council, which organized opposition against what it saw as a diminished economic development program that will invest only a fraction of the amount of state money into economic development as was being done through Empire Zones.
Partnership for New York City president Kathy Wylde said her group has a long history of getting involved in issues that affect the whole state, arguing that the benefits of Excelsior Jobs outstrip what was being done through Empire Zones.
She rejected the idea that phasing out Empire Zones would be the cause of problems in the economically ravaged areas of the state.
“Number one, the state budget crisis has a lot to do with the failure of the private sector of central and western New York, and frankly, New York City has to make up the difference in our tax revenue,” she said. “I don’t understand how the Business Council could be objecting.”
Wylde added that downstate business concerns had to fill the void left by a diminished upstate private sector presence.
“The business community upstate has been dependent on subsidies for so long that I think there is a lack of confidence about what can be done.”
Kenneth Adams, president and CEO of the Business Council, did not mince words either, decrying Excelsior Jobs as a major mistake, especially for a state facing a budget crisis.
“It’s an underfunded pilot project,” he said. “These programs sound a lot like Ancient Rome—Excelsior, Empire. I hate to take you back to Gibbons and The Fall of the Roman Empire, but that’s where we are.”
