ALBANY - An independent fiscal watchdog on Tuesday reported that most companies failed to provide promised jobs in exchange for big tax breaks under New York's Empire Zone program.
“It's a $700 million program that has a failing rate of 58 percent,” said Elizabeth Lynam of the Citizens Budget Commission, which released the report Tuesday. “Scrap it. There's no way to fix it - they tried.”
The Empire State Development Corp., which runs the 22-year-old Empire Zone program, also wants changes, but doesn't plan to scrap the mainstay of New York's economic development program.
“The governor has repeatedly called for reform of this flawed program,” said Warner Johnston, spokesman for the public benefit corporation now controlled by Gov. David Paterson.
“Especially in these times of fiscal restraint, it is important that the state's economic development incentives be targeted to key sectors of our economy. We anticipate making an announcement regarding the future of the program later this year.”
Empire Zones were created by the Legislature and the Pataki administration to provide tax credits and breaks on sales taxes and business taxes as a way to give companies a less expensive way to expand or to attract new employees.
The program has been revised several times, often after politically connected companies were found to have provided few jobs in exchange for significant tax breaks.
“The program's political appeal is such that repeated efforts to ‘reform' it have only created more loopholes,” stated the report.
The report did not identify specific companies that failed to live up to job-creation goals.
But it noted that recipients of Empire Zone tax breaks include some of the nation's wealthiest companies such, as Wal-Mart, IBM Corp., Home Depot, Target, Lowe's Home Centers, PepsiCo., Lockheed Martin, Coca-Cola, Tiffany company and Dick's Sporting Goods.
The amount of tax credits over several years include $2.3 million for Wal-Mart in several locations and $4.5 million for Target stores in several areas.
The report also showed 4,959 companies failed to meet their targets for job creation or their own investment by 60 percent or more.
Legislative leaders have also called for an overhaul of the system. Assembly Speaker Sheldon Silver has called for a moratorium on further tax breaks until changes are made.
On the Net
http://www.cbcny.org
The Empire State Development Corp., which runs the 22-year-old Empire Zone program, also wants changes, but doesn't plan to scrap the mainstay of New York's economic development program.
“The governor has repeatedly called for reform of this flawed program,” said Warner Johnston, spokesman for the public benefit corporation now controlled by Gov. David Paterson.
“Especially in these times of fiscal restraint, it is important that the state's economic development incentives be targeted to key sectors of our economy. We anticipate making an announcement regarding the future of the program later this year.”
Empire Zones were created by the Legislature and the Pataki administration to provide tax credits and breaks on sales taxes and business taxes as a way to give companies a less expensive way to expand or to attract new employees.
The program has been revised several times, often after politically connected companies were found to have provided few jobs in exchange for significant tax breaks.
“The program's political appeal is such that repeated efforts to ‘reform' it have only created more loopholes,” stated the report.
The report did not identify specific companies that failed to live up to job-creation goals.
But it noted that recipients of Empire Zone tax breaks include some of the nation's wealthiest companies such, as Wal-Mart, IBM Corp., Home Depot, Target, Lowe's Home Centers, PepsiCo., Lockheed Martin, Coca-Cola, Tiffany company and Dick's Sporting Goods.
The amount of tax credits over several years include $2.3 million for Wal-Mart in several locations and $4.5 million for Target stores in several areas.
The report also showed 4,959 companies failed to meet their targets for job creation or their own investment by 60 percent or more.
Legislative leaders have also called for an overhaul of the system. Assembly Speaker Sheldon Silver has called for a moratorium on further tax breaks until changes are made.
On the Net
http://www.cbcny.org
Citizen
Hot Jobs
New! Off the Menu
The Citizens' Say
Post your comment - click hereThere are No comments posted.