New York is struggling to stay a competitive home for businesses. In these tough economic times, the state needs a program which promotes development, helps to increase our tax base and encourages job creation. Unfortunately, the governor and the majority in their budget chose to step back from current development programs and institute a new, smaller, poorly directed program.
Economic development is a complicated policy arena. It is part art, part science, and all politics. For a state like New York – with its high taxes and restrictive regulations as deterrents to business development – it is even harder. As people and businesses began to exit New York, the Empire Zone program was developed. This program offered tax incentives and benefits totaling $650 million annually to qualified businesses with the object of creating jobs and generating investment in New York. During a 10-year span, the program created over 70,000 jobs.
The Empire Zone Program was far from perfect. However, its new successor, the Excelsior Jobs Program, fails to overcome the shortcomings and mistakes of its predecessor. This new program takes a giant step backward in economic development by capping spending at $250 million per year from the $650 million provided under the Empire Zone Program. The program eliminates the development zones, and instead bases investment on ‘distressed census track’ or areas that are characterized by pervasive poverty, high unemployment, and general economic distress. Only 48 of the current 85 Empire Zones are included under the newly restructured requirements. Only the city of Gloversville in my district appears on the list.
Not only am I worried about the cuts and the new focus, I also am concerned about how this program will integrate with localities. The Empire Zone Program established a linkage with regions and localities building on their strengths. The Excelsior Jobs Program is more vertical in organization and could suffer from a lack of collaboration with localities. The focus on areas of poverty and targeted industries also is troubling. Instead of taking advantage of one of New York’s greatest assets – our skilled workers – the new program is restricted to distressed census tracks or specifically targeted industries. New York needs an economic development program that accentuates and works with our assets.
On the floor of the Assembly, I often argue against government spending; however, this is one case where I would encourage more spending. More spending means more jobs, a deeper tax base, and a more competitive business environment. In a state that ranks low in business tax climate nationwide, tax incentives and benefits are important motivators. We need to spend more to gain more. New York needs to make a real investment in economic development to compete and provide hardworking New Yorkers with jobs now and in the future.