Bipartisan budget creates jobs, reforms Empire Zones program

The Assembly, Senate and the governor passed a fair, responsible and on-time budget that includes a comprehensive jobs plan to expand and reform the state’s Empire Zones program and allow each region of the state to use its strengths to compete in the global economy.

The plan will improve technology, provide funding to businesses that show job creation potential, and enhance opportunities for expansion across all industries. It will improve our economy and ensure that our economic development programs do the jobs they were created to do.

Reforming the Empire Zones program

The budget authorizes 12 new Empire Zones – expanding one of New York’s most important economic development tools. It also addresses some major abuses and closes loopholes to make the program more effective and accountable.

The jobs plan reforms the Empire Zones program by reconfiguring incentives to encourage companies to locate and expand in distressed communities, as well as offer higher pay and benefits. The reforms also offer better incentives for manufacturing and technology firms – which tend to provide better-paying jobs and have a greater economic impact on local economies.

In addition, existing one-mile zones could apply to become two-mile zones, creating new jobs. The agreement also increases accountability measures in the Empire Zones program by:

• Requiring the Empire Zones Board to assume greater authority in the designation, re-configuration, and revision of zones

• Creating an independent report on the performance and usefulness of the Empire Zones program

• Requiring the state Office of Taxation and Finance to produce a performance report that includes all job creation information and the actual cost of tax benefits claimed by zone businesses

While the governor sought to water down the Legislature’s bipartisan reforms of the Empire Zones program, significant protections to better ensure improved administration of the programs were still achieved. The program will continue to be monitored to ensure that its running effectively and further reforms can be offered as needed.

NY@Work – Building on regional economic strengths

Under the agreement, the New York State Foundation for Science, Technology and Innovation – a public benefit corporation – will be formed from the current New York State Office of Science, Technology and Academic Research.

The foundation will take over all NYSTAR programs and put in place a statewide economic development strategy that will make the most of each region’s strengths. It will also scrutinize the state’s current initiatives to judge their effectiveness.

The foundation will be governed by a bipartisan, 13-person board of directors that will oversee programs and funding.

The board will also fund up to 10 regional development proposals so that the local organizations and their high-tech partners who know their area the best can help draft a local economic development strategy. Some of the programs to receive funding are:

• The Innovation Investment Program, which finances early-stage companies that show growth potential

• The Emerging Investment Program, which finances businesses that are developing new products

• The Business Acceleration Program, which finances revenue-generating businesses that are pushing for faster job creation and profitability

• The Regional Innovation Fund, which finances emerging high-tech companies, community colleges and facilities that target different sectors of New York’s economy

• The Capital Investments Innovation Fund, which will provide state capital support for projects that enhance innovation in emerging or high-tech industries

In addition, the final budget jobs plan will improve the accountability of New York’s economic development programs. Routine audits will be conducted and an annual performance review of each program will be issued by the foundation.

Making New York the right place to do business

To make it easier for businesses to thrive in New York, the budget includes business tax cuts totaling $213 million, including:

• Adopting a single sales factor apportionment, saving businesses $130 million in the third year

• Increasing the Enhanced Investment Tax Credit for research and development, saving businesses $10 million

• Allowing a small business rate reduction, saving businesses $5 million

• Enhancing the CAPCO program by providing an additional allocation of $60 million for technology investments

This thoughtful and innovative approach to job creation will bring businesses to the state and create quality jobs that will improve New York’s economy.