Report: shut down tax-break program
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- December
- 2
The state should do away with one of its biggest economic-development programs, “Empire Zones,’’ a watchdog group recommended today.
The $582 million program is designed to provide tax breaks to companies that locate in depressed areas and create jobs. But it has grown to the point where there’s no way to measure whether it reaches those goals, according to the report from the Citizens’ Budget Commission.
“What was once intended as a small targeted program to assist economically distressed areas is now a vehicle for giving tax breaks to a variety of corporations, with no clear, consistent, verifiable justification for the public investment,’’ the report says.
“Repeated efforts to improve the Empire Zone program have led only to more loopholes and tax breaks,’’ said commission president Carol Kellerman. “It’s about time that the program be shut down.’’
A spokesman for the Empire State Development Corp., which oversees the program, made it sound like the end is near.
“The governor has repeatedly called for reform of this flawed program,’’ said spokesman Warner Johnston. “We anticipate making an announcement regarding the future of this flawed program later this year.’‘
This entry was posted
on Tuesday, December 2nd, 2008 at 11:51 am by Jay Gallagher.
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Actually, the so-called loop-holes were legislatively closed back in 2005 and businesses that should not have been certified have been decertified since then. Also, businesses that are certified in Empire Zones are required to submit annual reports that state their employment level, investments made, and tax credits claimed in order to retain their certification. There are ways to track whether a company is meeting the goals as stated in their applications to become a Zone Certified Business. In addition, the state has no way to track whether the program actually costs $582 million because businesses claim their incentives using tax forms and NYS Tax & Finance doesn’t share that information with other state departments.