Silver Announces Buffalo and Syracuse Hearings on State's Empire Zones Program

Hearings To Address Charges Of Program Abuse, Mismanagement

Assembly Speaker Sheldon Silver today announced that the Assembly will conduct legislative hearings on the state's Empire Zones program. Among some of the concerns that will be addressed at the hearings are the process by which Empire Zones are selected or modified and the lack of accountability by the Empire State Development Corporation (ESDC) regarding program costs and the actual number and types of jobs being created in the state's 72 Empire Zones.

"While the Assembly is extremely proud of the innovative Empire Zones program, which we first called for in 1999, we are not proud of the way this administration is administering it," said Silver, noting extensive press accounts, criticisms and reports of mismanagement and misuse of the job-creating initiative that have surfaced over the past year.

"Earlier this year the Assembly passed legislation aimed at restoring the integrity of this program. It is my hope that these hearings will provide insight as to whether any additional legislative reforms are necessary and move the governor and Senate to join the Assembly in this effort," said Silver, who, in July, also called on New York State Comptroller Alan Hevesi to conduct an extensive, independent audit of the Empire Zones program.

"Considering that the Assembly Majority initiated the Empire Zones program, it's particularly disappointing that the ESDC has allowed this important and effective economic development tool to be abused and diverted from its original purpose, which was to establish an innovative, job-creation vehicle for economically struggling communities throughout the state," said Silver.

The Assembly hearings, scheduled for Monday, December 15 in Syracuse and Tuesday, December 16 in Buffalo, will be chaired by Assembly Ways and Means Committee Chair Herman D. Farrell, Jr., Economic Development, Job Creation, Commerce and Industry Committee Chair Robin Schimminger, Corporations Authorities and Commissions Committee Chair Richard Brodsky and Labor Committee Chair Susan John.

"While widely regarded as the state's most effective job-creating tool, it has become clear that the Empire Zones program, under the control of ESDC, has not lived up to its full potential. This program is simply too important to New York State's economy for it to continue this way," said Farrell.

"Findings and revelations uncovered by newspapers, including the Buffalo News, indicate that the Empire Zones program needs a more careful look. I expect these hearings to be helpful in evaluating, improving and ensuring the effectiveness of the program," said Schimminger.

"We will conduct a fair and thorough examination of the way in which the Empire Zones program has been administered in Buffalo and across the state, both on its own and as part of our ongoing inquiry into the operations of state authorities, corporations, and commissions," said Brodsky.

"The Assembly created the Empire Zones program as a means of economic development for areas of the state hit hardest by our lagging economy, especially the upstate region that has suffered from the national recession," said John. "All New Yorkers need to be assured that their tax dollars are benefiting their communities and families."

As part of the Assembly's efforts to address some of the concerns that have surfaced regarding the initiative, the house passed legislation in June seeking to reform the state's Empire Zones program and refocus its intent of job creation in economically distressed areas.

The reform legislation (A.9021-A) would replace the current Empire Zone Development Board with a new, three member Economic Development Control Board - providing one appointment each to the governor, the Assembly speaker and the Senate majority leader.

Other provisions of the bill include:

• Requiring zones to reconfigure themselves into three, distinct, contiguous areas as originally called for in program regulations;
• De-certifying those businesses that simply reincorporated, without adding new jobs, in order to obtain benefits;
• Enhancing the role of the state Department of Taxation and Finance to include the certification and, when appropriate, the decertification of businesses; and
• Requiring comprehensive reports by both ESDC and the state Department of Tax and Finance to make public the number of jobs created and the true cost of the program.